PLN: Statistics Office Revises May Inflation Lower, Kotecki Sees Room For Easing

EUR/PLN deals at 4.2733, up 64 pips on the session amid broader defensive mood. A break above Apr 16/Dec 25 highs of 4.3102/4.3114 would support the bullish case after the recent formation of a 'golden cross'. Conversely, bears look for a dip through the 100-DMA, which today kicks in at 4.2236.

• The Finance Ministry had the upper hand in negotiations with the Ministry of Family, Labour and Social Policy as the cabinet approved a proposal to increase the minimum wage and public-sector wages next year by the anticipated rate of inflation (+3% Y/Y). The proposal will not be submitted for consultations with employer and employee lobbies. The cabinet also opted for the smallest possible increase in pensions, which will be around +4.9% Y/Y, if current macroeconomic assumptions are maintained.
• MPC's Ludwik Kotecki reaffirmed his view that the central bank could resume cutting rates in July or September. The official noted that headline inflation should fall below +3.0% Y/Y in July and approach the target in a sustainable manner. In his view, there is scope for 50bp worth of easing this year and a further 100bp of easing in 2026, which should be delivered gradually, in measured steps.
• Statistics Poland revised headline inflation for May to +4.0% Y/Y from a flash reading of +4.1%, while leaving the sequential reading unchanged at -0.2% M/M. Pekao commented that current conditions are most conducive to easing monetary policy in many years, possibly since 2017.
• POLGB yields sit 2.6-3.4bp higher across the curve, having faded part of their initial upswings. The broad-based WIG Index has faltered by ~1%, while benchmark WIG20 has shed around 1.3%.
• The NBP will publish April balance of payments data at 13:00BST/14:00CEST.