Back
4 Feb 2015
NBP could cut rates in March and April – TDS
FXStreet (Edinburgh) - Strategist TD Securities Paul Fage maintain the view that the NBP will resume the easing bias in March with a 25 bp rate cut.
Key Quotes
“Today, in line with the almost unanimous market consensus, the National Bank of Poland (NBP) kept its policy rate on hold at 2.0%. The main reason cited for leaving rates unchanged was recent increased volatility in financial markets”.
“The MPC regards current growth data as satisfactory with preliminary data showing Q4 GDP growth remaining above 3%. Labour market data point to declining unemployment resulting largely from rising corporate employment. However, deepening deflation remains a concern, with December CPI inflation falling to –1.0% Y/Y”.
“Looking forward, we think that, so long as PLN is stable or strengthening against CHF, the MPC will be able to cut rates at the March meeting. By then the MPC with have the March Inflation Report, which will inevitably show the point at which inflation will move back to the 2.5% target being pushed even further out into the future”.
“However, we think it is more likely that the MPC will be cautious and cut the policy rate by 25 bp in March and then again by another 25 bp in April. We then expect rates to remain on hold for the rest of this year”.
Key Quotes
“Today, in line with the almost unanimous market consensus, the National Bank of Poland (NBP) kept its policy rate on hold at 2.0%. The main reason cited for leaving rates unchanged was recent increased volatility in financial markets”.
“The MPC regards current growth data as satisfactory with preliminary data showing Q4 GDP growth remaining above 3%. Labour market data point to declining unemployment resulting largely from rising corporate employment. However, deepening deflation remains a concern, with December CPI inflation falling to –1.0% Y/Y”.
“Looking forward, we think that, so long as PLN is stable or strengthening against CHF, the MPC will be able to cut rates at the March meeting. By then the MPC with have the March Inflation Report, which will inevitably show the point at which inflation will move back to the 2.5% target being pushed even further out into the future”.
“However, we think it is more likely that the MPC will be cautious and cut the policy rate by 25 bp in March and then again by another 25 bp in April. We then expect rates to remain on hold for the rest of this year”.