What else caught our eye:
- Core inflation excl. food and energy hit 5.3% y/y in December with all other measures of core inflation going up (to 3-8.5% y/y from 4.7-7.5% y/y in Nov). Our supercore inflation measure (at 5.2% y/y in Dec.) keeps indicating broad-based inflationary pressures in the economy.
- PPI inflation continued an upward trend in December (14.2% y/y, up from 13.6% y/y in Nov.), but (our) core PPI measure suggests that without a new commodity price upsurge, consumer goods inflation should stabilize in 1h22.
- Consumer sentiment dived in January and was the weakest since Nov20 on a negative evaluation of household situation. Business confidence indicators for January also showed a weaker sentiment at the start of 2022, most likely due to Omikron fears and accelerating cost side pressure.
- Lon advocated that the MPC should reconsider leaving rates unchanged at the next (and his last) meeting in February. We don’t think the majority of the MPC will follow.
- The Sejm’s Public Finance Committee has given a green light to W.Janczyk and E.Ostrowska to be appointed to the MPC by the Sejm on Wednesday.
The week ahead:
- Retail sales in December was most likely unfazed by inflation shots, expanding at a double-digit rate (PKOe: 10.7% y/y).
- Monetary stats for December should reveal a gradual switch of focus in loans: from household to corporate sector.
- Unemployment rate in Dec. most likely stood at 5.4% despite usual seasonal weakness at this time of year.