Poland's April data turn dovish

Poland's real economy and inflation indicators surprised to the downside in April: industrial output growth was slower at 2.7% y/y (calendar-adjusted) vs. c.5%-6% average recorded in previous months, and the m/m reading dropped to sharply negative. 

At the same time, PPI data for April showed deflation intensifying to 2. 6% y/y from 2.5% in March. 

"These April data alone will not change the mind of the MPC in the near-term -- the rate cycle in Poland will remain paused -- but, these readings do highlight downside risks for Eurozone-linked countries, which in combination with periodic appreciation pressure on the zloty, is likely to sway the MPC into delivering one more 50bps rate cut during H2", says Commerzbank. 

Analysts see EUR-PLN rising to average 4.15 over the coming quarters.