9 Apr 2014
EMEA EM Express: Polish central bank on hold in April
FXStreet (Łódź) - As widely expected, the National Bank of Poland kept its benchmark rate unchanged at 2.5% for the seventh consecutive month on Wednesday. The press conference during which the details of the decision will be given will take place at 13 GMT.
Cristian Maggio, Senior Emerging Markets Strategist at TD Securities believes that the Monetary Policy Council won't change its tone or the forward guidance. “In fact, the NBP has already extended the forward guidance to the whole of Q3, identifying the fourth quarter as the first potential window of opportunities for policy tightening,” he reminds.
The analyst adds that in the face of slow inflation prospects the MPC might decide to postpone the first rate hike to 2015 “as the MPC members are far from being unanimous on the merits of tightening in the foreseeable future.” Still, he believes that “this does not reasonably look like a decision for today.”
Meanwhile on Tuesday the Russian Economy Ministry released economic forecasts, slashing the growth projection for 2014 to 1.1% from 2.5%. Still, this objective would be attained only if government stimulus was applied, Deputy Economy Minister Andrei Klepach said, adding that otherwise growth might slow to just 0.5%.
Klepach pointed to tensions between Russia an the international community over Ukraine as the main factor weighing on Russia's economic performanc.
In the opinion of Dmitry Polevoy from ING: “Overall, the downgrade of the key macro figures put the MinEco forecast closer to the market consensus and economic reality with remaining downside risks, given the MinEco
didn’t factor in any sanctions scenarios.”
“The new CPI projections confirmed a very highprobability of missing the CBR targets for 2014, but we still see its next-year one of 4.5% as achievable.”
Russian president Vladimir Putin revealed his worries with the slowing economy on Tuesday saying that "the business climate must be improved substantially."
Economic data
On Wednesday the Czech Republic's month-on-month CPI remained flat in March, following a 0.2% rise in February. On an annual basis inflation was at 0.2%.
Furthermore, Hungary and Romania released February trade balance data. The Hungarian Central Statistical Office said that the country's trade surplus widened to €765.9M from €461.4M. Romania's trade deficit widened to €-0.315B from €-0.250B.
Technicals
Following the NBP monetary policy decision EUR/PLN continued trading at around 4.1715, above today’s lows at 4.1660.
On Tuesday USD/PLN dropped by 0.03% to 3.0201. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was at 43 at the last close and moved up to 49 so far today. The Daily 2-StDev Volatility Bandwidth was shrinking at 87 pips, with ATR (14) shrinking at 189 pips. The 1D 200 SMA was at 3.1061, while the 1D 20 EMA was at 3.0337.
USD/RUB rose by 0.04% to 35.6980. The daily FXStreet Trend Index was slightly bullish, and the OB/OS Index neutral. RSI was at 50 at the last close. The Daily 2-StDev Volatility Bandwidth was expanding at 4755 pips, with ATR (14) expanding at 4202 pips. The 1D 200 SMA was at 33.5064, while the 1D 20 EMA was at 35.6961.
Cristian Maggio, Senior Emerging Markets Strategist at TD Securities believes that the Monetary Policy Council won't change its tone or the forward guidance. “In fact, the NBP has already extended the forward guidance to the whole of Q3, identifying the fourth quarter as the first potential window of opportunities for policy tightening,” he reminds.
The analyst adds that in the face of slow inflation prospects the MPC might decide to postpone the first rate hike to 2015 “as the MPC members are far from being unanimous on the merits of tightening in the foreseeable future.” Still, he believes that “this does not reasonably look like a decision for today.”
Meanwhile on Tuesday the Russian Economy Ministry released economic forecasts, slashing the growth projection for 2014 to 1.1% from 2.5%. Still, this objective would be attained only if government stimulus was applied, Deputy Economy Minister Andrei Klepach said, adding that otherwise growth might slow to just 0.5%.
Klepach pointed to tensions between Russia an the international community over Ukraine as the main factor weighing on Russia's economic performanc.
In the opinion of Dmitry Polevoy from ING: “Overall, the downgrade of the key macro figures put the MinEco forecast closer to the market consensus and economic reality with remaining downside risks, given the MinEco
didn’t factor in any sanctions scenarios.”
“The new CPI projections confirmed a very highprobability of missing the CBR targets for 2014, but we still see its next-year one of 4.5% as achievable.”
Russian president Vladimir Putin revealed his worries with the slowing economy on Tuesday saying that "the business climate must be improved substantially."
Economic data
On Wednesday the Czech Republic's month-on-month CPI remained flat in March, following a 0.2% rise in February. On an annual basis inflation was at 0.2%.
Furthermore, Hungary and Romania released February trade balance data. The Hungarian Central Statistical Office said that the country's trade surplus widened to €765.9M from €461.4M. Romania's trade deficit widened to €-0.315B from €-0.250B.
Technicals
Following the NBP monetary policy decision EUR/PLN continued trading at around 4.1715, above today’s lows at 4.1660.
On Tuesday USD/PLN dropped by 0.03% to 3.0201. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was at 43 at the last close and moved up to 49 so far today. The Daily 2-StDev Volatility Bandwidth was shrinking at 87 pips, with ATR (14) shrinking at 189 pips. The 1D 200 SMA was at 3.1061, while the 1D 20 EMA was at 3.0337.
USD/RUB rose by 0.04% to 35.6980. The daily FXStreet Trend Index was slightly bullish, and the OB/OS Index neutral. RSI was at 50 at the last close. The Daily 2-StDev Volatility Bandwidth was expanding at 4755 pips, with ATR (14) expanding at 4202 pips. The 1D 200 SMA was at 33.5064, while the 1D 20 EMA was at 35.6961.