China Slows Inflation in Poland. For RPP, it's the end of fear of rate hikes, but we will wait for cuts

Inflation reverses thanks to falling oil prices. What will RPP do next?

Inflation reverses thanks to falling oil prices. What will RPP do next?

"The June reading confirms a clear weakening of price pressure. The key factor was the de‑escalation of the conflict in the Middle East and a faster‑than‑expected drop in oil prices. Importantly, the rise in commodity prices during the conflict was smaller than some analysts feared. Factors such as high inventories and lower oil purchases by China, which reduced demand pressure in the commodity market, contributed to this."

If there is no further escalation of the conflict, inflation in the coming months should not rise significantly. The effects of a second round should be limited and more spread out over time, especially since the supply shock has clearly weakened. For RPP, such a reading is an argument against raising interest rates, but it does not automatically open the way to rapid cuts. The most likely scenario remains waiting further.

– commented Andrzej Gwiżdż, analyst at the investment platform Portu.

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FXMAG Team

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