The day when Poland takes a step towards raising interest rates

The highlight of Monday in the domestic currency market will be the publication of Polish data on retail sales i industrial production in the month of April. Central Statistical Office will publish them at 10:00. And although reports on unemployment and money supply will be published in the coming days, today's data will close the last week's series of data, which is an overview of the economic situation in April.

Pending macro data

The market estimates that industrial production surged in Poland in April 44 percent year on year, after an increase of 18,9 percent. in March. Retail sales, on the other hand, skyrocketed up by 27,2 percent. Y / y vs. an increase of 17,1%. a month earlier. Of course, there will be a lot of base effect to it, after a year ago in April in the wake of the pandemic lockdown, production fell by 25,5 percent and sales by 22,6 percent. However, the base effect does not explain all the increases. The strong readings expected in April are the result of a large revival in the manufacturing sector (observed all over the world), as well as delayed demand, which comes to life and will accelerate in the coming months.

Strong macroeconomic data in comparison with strongly rising inflation this will be another step bringing Poland closer to leaving the loose monetary policy and then the first interest rate increases. Today's data should be a step, maybe not the rate hike itself, but towards a discussion about it. The next step will be the May CPI inflation data released on June 1, which should again jump significantly and reach around 5%.

Strong data, better than the market consensus, will create further pressure on the zloty, pushing Polish pairs further down. Today at 08:30 the EUR / PLN exchange rate was at PLN 4,4940, USD / PLN at PLN 3,6870 and CHF / PLN at PLN 4,1080.

EUR / PLN daily chart. Source: Tickmill