Zloty Unfazed By Inflation Data Even As POLGB Yields Climb

EUR/PLN has so far looked through Polish inflation data, which could be interpreted as hawkish at the margin, even as headline figure fell from the February cycle peak. The rate last deals at PLN4.6742, near unchanged levels, holding a familiar range. The high print of Mar 20 at PLN4.7215 provides the initial target on the topside, while bears look for losses past Mar 1 low of PLN4.6620.

• Poland's CPI inflation slowed to +16.2% Y/Y in March (versus BBG consensus est. +16.0%) from +18.4% prior, according to preliminary data from Statistics Poland. The data support a widespread conviction that inflation peaked in February and will ease going forward, but local analysts warned that base effects played a significant role, while core inflation accelerated.
• Today's CPI data prompted participants to pare rate-cut bets, albeit the market still sees the NBP easing policy by the end of this year. 9x12 FRA vs. 3-month WIBOR spread tightened to -58bp from around -69bp prior to the release. POLGB yields have also advanced in reaction to the data and last sit 4.8-6.9bp higher across the curve.
• Based on market pricing and sell-side calls, the NBP are expected to keep interest rates unchanged next week, with the rate decision coming up Wednesday and Governor Glapinski's presser due the following day. The central bank's language will be closely scrutinised amid expectations of an on-hold decision.