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2021/12/13 / Erste Group Research

Poland Weekly Focus | Major central banks in focus

This week, major central banks including Fed and ECB will hold their rate-setting meetings. If Fed announces faster tapering of its bond purchases, US dollar could appreciate and push EURPLN towards 4.65. Local labor market statistics and core inflation for November are due.

December 16 | Core inflation for November The flash inflation reading for November delivered another surprise to the upside, as it arrived at 7.7% y/y (up from 6.8% y/y in October). Given the available information, we expect core inflation to accelerate to 4.7% y/y in November (up from 4.5% y/y in the previous month). Given the announcement of the anti-inflation shield, CPI will most likely already peak in December at around 8% y/y. While headline inflation is expected to gradually decrease throughout next year, core inflation will remain elevated.

December 17 | Labor market statistics for November. This week, we will receive the first real economy indicators for November as labor market statistics will be released. We expect wage growth to maintain solid dynamics and increase by 8.5% y/y in November, while employment growth should land at 0.5% y/y. Although the situation on the labor market remains favorable, employment is still around 95tsd lower compared to pre-crisis levels. On the other hand, according to the estimates of the Ministry of Family and Social Policy unemployment rate decreased by 0.1pp to 5.4% and hence returned to pre-pandemic levels.

Bond market drivers | 10Y yield back around 3.2%. Over the course of the week, the 10Y LCY yield moved within the range of 3.0-3.2%, while the short end of the curve returned to 2.9%. The spread against the 10Y German Bund widened again toward 355bp. Last week’s decision of the National Bank of Poland was broadly expected and did not have any strong impact on the local bond market. During the press conference, Governor Glapinski confirmed that the QE program has ceased and the central bank will no longer organize tenders. However, if required by the market situation, the NBP can use the tool once again.

FX market drivers | Zloty broadly unchanged. This week will be all about the rate-setting meetings, as 20 central banks around the world will convene. Most important for emerging market currencies, including the zloty, will be the meeting of the Fed and of the ECB. While rates are to remain stable on both sides of the Atlantic, both central banks are expected to decide on their purchase programs. Should the Fed announce more aggressive tapering, the US dollar could appreciate and push the EURPLN toward 4.65. At last week’s press conference, Governor Glapinski reiterated that the central bank might intervene on the FX market if needed, but there is no targeted level for the exchange rate. The central bank would intervene on the market in order to prevent the currency from sharp depreciation or appreciation. All in all, the MPC sees the current level of the PLN as good.

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General information

AuthorErste Group Research
Product nameCEE Country Update
Topic in focusMacro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-


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