A relief on regional markets had continued. Speaking about forex markets beside better external sentiment it was selling of euros offered by the Polish state BKG bank, which helped currencies in Central Europe.
Meanwhile, releases of the Czech macro data from April showed that an exportoriented part of the real economy still performs relatively favourably. The industrial production grew by solid 2.2%, while especially growth of new orders from abroad remains firm. The good performance of the industry goes hand in hand with strong results of Czech exports, which helped to generate CZK 22bn surplus in April (which is by CZK 9bn more than a year ago).
The main regional item will be the National Bank of Poland meeting today, although in contrast to the last meeting the MPC will unlikely change rates this time. Bear in mind that, due to persisting high inflation, high inflation expectations, and the reasonable condition of the economy, the central bank decided to raise rates by 25 basis points in May. Its move surprised some market participants, although the bank had declared its intentions at its April meeting in a fairly clear manner. Equally transparently, the bank signalled in May that another rate change at its upcoming meeting was unlikely. This is also consistent with the latest release of macroeconomic data. In addition to the GDP growth figures for the first quarter (which lagged behind the expectations of the NBP), we also mean new business expectation figures (PMI), which continued to decline to less than the key 50-point level in May. April’s industrial output and retail sales also fell short of expectations. Our baseline scenario envisages that rates will remain unchanged for the rest of 2012, even though July’s inflation report may include new information in that regard.