POLAND: Inflation Expected To Tick Higher Before Upcoming CPI Re-Weighting
Statistics Poland will release January CPI data at 09:00GMT/10:00CET. The publication is based on the 2024 CPI basket, which will be revised in March. At this point, the statistics bureau will release detailed final CPI figures for January and February, using newly adjusted weightings. Almost all analysts expect an uptick in headline inflation from December's +4.7% Y/Y and the median estimate in Bloomberg's survey is +5.0% Y/Y.
- BGK expect headline inflation to print at +4.8% Y/Y versus +4.% previously. The note that domestic inflation will remain elevated until July 2025 and the expiry of base effects caused by energy price hikes last year.
- BOS Bank write that inflation probably accelerated to +4.9% Y/Y due to higher energy carrier prices (on the back of household gas price hikes) and fuel prices (low comparative base from January 2024).
- Credit Agricole write that inflation may have increased to +4.9% Y/Y in January from +4.7% prior, with firmer food and fuel price increases pushing overall inflation higher.
- ING see headline inflation at +5.0% Y/Y due to higher energy prices, boosted by a hike in gas distribution fees. In their view, core inflation likely eased slightly.
- Pekao note that inflation likely quickened to +5.0% Y/Y. They write that the beginning of the year is associated with heightened uncertainty as many firms update their price lists. They see core inflation at +3.9% Y/Y.
- Santander expect inflation to accelerate to +5.1% Y/Y on the back of notable food and fuel price increases. Core inflation may tick lower to +3.9% Y/Y, in their view.
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ECB: de Guindos Re-iterates ECB Base Case Of Further Easing
Few big surprises from ECB VP de Guindos' speech at the 15th edition of Spain Investors Day:
- "The balance of macroeconomic risks has shifted from concerns about high inflation to concerns about low growth"
- "Given the high level of uncertainty, we will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. The high level of uncertainty calls for prudence"
- "If the incoming data confirm our baseline, the policy trajectory is clear, and we expect to continue to further reduce the restrictiveness of monetary policy."
He joins several Governing Council colleagues since the turn of the year in calling for further ECB easing. OIS markets continue to essentially fully price a 25bp cut in January and March.
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