Weekly

In the final week before Easter, we will continue paying closer attention to oil and gas prices than to the prices of eggs and butter. Donald Trump has extended the suspension of attacks on Iran by another 10 days, but this has failed to calm either commodity or financial markets, which remain concerned about the security of energy supplies in the coming months. Polish drivers will be closely watching the fate of a government bill allowing for a temporary reduction in fuel taxes, which should be sent to the President for signature in the coming days.

In the calendar of domestic economic releases for the coming week, there are only two key items: the flash CPI inflation reading for March and the manufacturing PMI. Our estimates suggest that CPI inflation rose in March to 3.1% y/y from 2.1% in February (...)

The economic data calendar for the coming week will be rather light. In Poland we will receive February data on retail sales and money supply (Monday), unemployment and the monthly GUS Statistical Bulletin (Tuesday).
Our retail sales growth forecast (4% y/y) is clearly below the market consensus median (around 6% y/y). The forecast is based on an analysis of card payment data from our bank’s clients - which in recent months have provided a fairly good indication of retail sales developments. If this proves correct, the figures would add to the set of arguments for the MPC not to rush its monetary policy response to commodity price swings - slowing wage and consumption growth would reduce the risk of so called second round effects. In any case, any monetary policy changes before July seem highly unlikely at this point. . (...)