RPP Meeting
The previous day's Monetary Policy Council meeting started unusually – somewhat like a sales dinner of a gold-trading company.
For the first 10 minutes Professor Adam Glapiński did not touch on any other topic, telling how wonderful the decision was to buy gold and how good it is that the NBP will buy another 70 tons of the metal. More important matters came later. The president of course avoided giving direct answers to questions, but repeatedly spoke about the possibility of submitting an application for a rate cut.
Moreover, speaking about the mood in the Council, he also presented it as more dovish – inclined to cuts – than expected. This does not at all fit the announcement of joining the trend of Western bankers giving fewer hints about future decisions. How did the markets react to this?
Since the climate is changing towards rate cuts, one apparently has to flee from the złoty. That is why yesterday we saw a level of 4.33 PLN. The last time it was that expensive was at the end of 2024.
Your forecast, the market's forecast
Yesterday we also learned fragments of the July inflation forecast – there is a certain clank here. Since markets expect rate cuts, it should mean that inflation will fall. The problem is that the March forecast range for 2026 was 1.6%-2.9%, and in July it was updated to 2.4%-3.3%. Such a change should rather distance the scenario of rate cuts.
The market, however, decided that if cuts are talked about so vehemently by their opponent, like Adam Glapiński, something must be real – and decided to ignore the inflation data. Remember, however, that there is no decision meeting in a month, and readings will flow. The question is how long investors will remember the NBP president and his announcement of a hypothetical application for a cut, and how quickly they will act in line with incoming data.
The market curses reality
Investors have concluded that the situation in the Persian Gulf will calm sooner or later. Therefore, despite ongoing tension, they considered that oil is still too expensive and it is worth taking profits from the last rebound.
As a result, we have a rather paradoxical situation: The Strait of Hormuz remains navigable only theoretically, the weekend is approaching, listings will be closed, and it is unclear what may happen – yet black gold is falling in price.
Two scenarios are possible. Either some investors have information others do not – which has happened several times with the current administration – or on Monday at the market opening we may face a big surprise, unless the situation in the region calms down.
Today in the macroeconomic calendar, it is worth paying attention to:
14:30 – Canada – labor market situation.
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