PLN: Zloty Struggles, CPI Takes Focus Ahead Of NBP Meeting

EUR/PLN trades +63 pips at 4.2735, with the zloty underperforming its CE3 peers. The pair rose to fresh session highs after the release of Polish CPI data but has pared most gains since. A break above Apr 16/Dec 25 highs of 4.3102/4.3114 would suggest that bulls are in the driving seat again. Bears continued to eye a sell-off past the 100-DMA/Apr 9 low at 4.2249/4.2231.

• A marginal miss in Poland's headline inflation (+4.2% Y/Y versus +4.3% expected) cemented expectations of a 50bp rate cut next Wednesday. The sharp drop from +4.9%, where inflation plateaued out in 1Q25, was facilitated by a high comparative base in the food basket and a decline in fuel prices. While detailed data will only be published approximately two weeks from now, local sell-side desks estimate that core inflation may have ticked lower by 0.1pp to +3.5% Y/Y, the upper end of the NBP's tolerance band.
• Hawkish dissenter Joanna Tyrowicz wrote on LinkedIn that it's not the right moment for rate cuts, citing familiar arguments. However, she appeared to have softened her stance, noting that 'if recent macro data will keep repeating, the time may come to stabilise interest rates at the current levels.' Tyrowicz had been tabling a motion to hike rates by 200bp at every meeting between November 2023 and March 2025 (the voting record for the April meeting has not been published yet).
• Separately, Finance Minister Andrzej Domanski said that he hopes household energy prices will fall in 2026. This comes after President Andrzej Duda signed a bill delaying the implementation of updated electricity tariffs into law, which is expected to result in larger discounts versus existing tariffs once the current price freezing mechanism expires at the end of Q3. The assumption of a rebound in energy prices played an important role in the NBP's rhetoric before the latest dovish pivot.
• POLGBs have reversed their earlier gains and yields now sit 1.8-3.1bp higher across the curve. The WIG Index is 1.2% worse off, with WIGBANK shedding 2.3% as rate-cut talk gains more traction.