POLAND: MPC Likely To Pause In June, April Minutes Eyed Today
May-09 06:56
- NBP Governor Adam Glapinski revealed that some MPC members saw July as the optimal moment for the next rate cut, while others preferred to wait until autumn, but none of them suggested resuming monetary easing in June. The Governor guided that the next cut will likely be coupled with a formal inauguration of an easing cycle and the MPC will probably switch to 25bp increments after this week's 50bp 'adjustment'. The Governor also revealed that the MPC had a preliminary discussion of potential tweaks to the reserve requirements (both in terms of the RRR and the interest on them) but decided to commission more analytical materials and include the issue in the agenda of the June meeting.
- MPC's Henryk Wnorowski told Bloomberg this morning that the MPC could resume interest-rate cuts in July at the earliest, adding that arguments may emerge for further cuts in 2H25. He said that the Council will proceed with caution due to the risk of persistently elevated inflation.
- In a separate interview, MPC's Ludwik Kotecki told Bloomberg 'September may be a better time to return to reductions' than July, as this week's cut 'wasn't insignificant' and inflation remains above the target. He estimated that 100bp worth of cuts this year would be an 'optimal' amount. The remaining 50bp could be spread over two meetings, in his view.
- Kotecki gave another interview to Money.pl, reaffirming his views on the interest-rate outlook, and declaring his unreserved support for the latest MPC statement. He said that the Council will return to the debate on rate cuts in July and will then decide what to do next. Kotecki also called for a reform of the bank tax and adjustments to reserve requirements as measures that could help address the problem of excess liquidity in the banking sector. He said that 'in the whole world these reserves do not bear interest, or very little interest. And there is no reason why this wouldn't be the case in Poland.'
- The central bank will also release the minutes of the April meeting at 13:00BST/14:00CEST. The document normally draws little attention, as it is published with considerable delay relative to the meeting it covers, but this time around it may shed some light on the discussion policymakers had before the sharp dovish pivot in the Governor's rhetoric.
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EQUITIES: Attention turns to the EU Cash open
Apr-09 06:56
Attention will again be on the EU Cash Open, following the White House pressing on with Tariffs and escalated the War against China.
While the Risk is Off, the Estoxx futures (VGM5) hasn't quite managed to break this Week's low of 4444.00, Today's low is at 4476.00.
- Calls: Estox 50: -3.18%, Dax: -3.11%, CAC: -3.48%, FTSE -2.37%, SMI -3.24%.
STIR: 90bp Of BoE Cuts Priced Through Dec
Apr-09 06:52
The broader risk-off price action, detailed elsewhere, drives dovish BoE repricing at the open, before a pullback.
- 91bp of cuts are now priced through year-end, with ~30bp showing for next month’s meeting. Pricing covering '25 meetings is 3-9bp more dovish vs. yesterday's close.
- SONIA futures +12.5 to -13.0, curve twist steepens. October ’24 highs were respected or went unchallenged across the strip.
- While some former MPC members have called for a 50bp cut/inter-meeting action, we don’t believe such moves are justified at present (and note the calls have come from former doves).
- Still, the market prices a ~20% chance of more than 25bp of easing being delivered come the end of the May meeting.
- MPC member Lombardelli didn’t provide much in the way of market-pertinent commentary.
- A reminder that BoE’s Breeden will speak at an MNI Connect event on Thursday, covering “UK economic and financial stability prospects."
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
May-25 | 4.158 | -29.8 |
Jun-25 | 3.998 | -45.8 |
Aug-25 | 3.793 | -66.3 |
Sep-25 | 3.703 | -75.3 |
Nov-25 | 3.590 | -86.6 |
Dec-25 | 3.548 | -90.9 |
STIR: Dovish Near-term ECB Repricing As US Tariffs Go Into Effect
Apr-09 06:48
The imposition of US reciprocal tariffs overnight prompts a further dovish repricing in EUR short-end implied rates this morning, with ECB-dated OIS now fully pricing a 25bp at next Thursday’s decision (at yesterday's close, the OIS implied probability was ~90%).
- There are 83bps of easing priced through year-end, 5bps more dovish than yesterday’s close but off opening extremes of 85bps.
- The consensus view amongst ECB Governing Council members is that the immediate risk of higher tariffs will be to weigh on growth, supporting lower rates.
- Yesterday, EC hawk Nagel noted that the tariffs have “significantly worsened global growth prospects".
- A 50bp cut next week probably doesn’t have much support amongst the GC at this stage (Simkus pushed back on the idea in an interview yesterday), but sequential cuts in April and June are now back to being the base case for markets.
- The Euribor strip has twist steepened, with core FI weakness – particularly in USTs – weighing on the greens/blues. Futures are +5.0 to -7.5 ticks through the blues at typing.
- Tariff-related headlines will once again be today’s key focus, while ECB’s Escriva, Knot, Villeroy and Cipollone are scheduled to speak.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Apr-25 | 2.162 | -25.3 |
| Jun-25 | 1.937 | -47.8 |
| Jul-25 | 1.814 | -60.1 |
| Sep-25 | 1.699 | -71.6 |
| Oct-25 | 1.650 | -76.5 |
| Dec-25 | 1.588 | -82.7 |
| Feb-26 | 1.572 | -84.3 |
| Mar-26 | 1.571 | -84.5 |
| Source: MNI/Bloomberg. | ||
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