观点

Chris Turner PLN: Delayed NBP tightening leaves the zloty vulnerable Final Polish inflation was revised slightly higher to 4.1% from the 4.0% September flash estimate.

Our core inflation forecast is unchanged at 3.1%, down from 3.3%, with today’s release expected to confirm the figure.

All agree that the new forecast and pace of disinflation next year will be decisive.

Wednesday's market gyrations following a hotter-than-expected US inflation report highlighted a potentially important shift in investor sentiment, with implications extending well beyond the bond market.

However, the accompanying weakness in technology stocks raises a broader question: Are investors becoming more concerned about the sustainability of the equity rally than the immediate outlook for inflation and interest rates?

We, like the market, expect a 25bp rate hike at the December meeting given inflation remains elevated and unemployment is low.

Given our inflation and jobs projections, we do not expect additional policy tightening in 2027, despite the market pricing in a further 50bp of hikes.

The Bank’s November inflation forecasts are likely to show CPI briefly above 4%, and that is likely to be the catalyst for a hike, citing previous research that inflation at these levels is historically more likely to trigger second-round effects.

Core CPI stayed unchanged at 0.3% MoM which matched our forecast.

The headline print was slightly above our 0.5% forecast in our preview, while core CPI was in line with our 0.3% call.

On an annual basis, headline inflation picked up to 3.7% YoY from 3.4%, slightly above our approximate 3.6% forecast, while core inflation rose to 2.6% YoY from 2.4%, in line with our forecast.

The upside surprise in headline inflation was largely driven by a sharper than expected increase in fuel prices, which more than offset softer than anticipated increases in food and household energy costs.

Fuel leads the rise in CPI Motor fuel prices rose 9.3% MoM in September, accelerating from 4.1% in August and well above our 4.9% forecast.

Headline inflation rose to 3.7% from 3.4%, above the 3.6% expected, energy-led, with core at 2.6%.

US PPI TO FIRM UP PCE TRACKING US producer prices will further inform estimated PCE inflation.

Inflation is still too high, pointing to another ECB rate hike, although quantitative tightening could be halted Higher energy and borrowing costs continue to weigh on the eurozone economic outlook October is the cruellest month October is budget season in Europe, when cash-strapped member states must show they can put their finances in order.

Inflation is therefore likely to end the year above 4%.

They may still emerge, but we do not expect a repeat of the full-blown inflation wave of 2022-23.

We expect inflation to fall back to an average of 2.5% next year.

With expected structural market support from credible budget plans and inflation hovering around 2.0-2.5% YoY in early 2027, we expect further easing to follow.

At the same time, broadening inflation pressures are reinforcing the case for further monetary tightening across most Asian economies Asia's economy remains supported by a robust AI investment cycle AI tailwinds continue, but momentum is moderating Asia's growth has remained resilient this year, outperforming expectations, largely driven by a stronger-than-expected AI investment cycle.

Looking ahead, El Niño and elevated fuel prices remain key upside risks to inflation.

Overall, headline inflation remains below central bank targets in Japan and China, but continues to exceed targets in Korea, Taiwan, and most Southeast Asian economies.

But resilience to more persistent global inflation and higher core rates could be put to the test through the exchange rate channel.

Higher energy and freight costs lift imported inflation, but CIS-4 currencies, so far resilient to tighter global rates, should keep policy responses country- specific.

Kazakhstan’s inflation has slowed 3ppt this year to 9.3% year-on-year, allowing the National Bank of Kazakhstan to cut the base rate from 18.00% to 16.25%.

Meanwhile, inflation remains above both 5% targets, which, combined with domestic demand-side pressures, limits further cuts to 1.0-1.5ppt up to the end of 2027.

With CPI within the 4±2% target range, we expect the policy rate to stay at 6.50%.

Tourism and remittance-supported demand has lifted inflation 1ppt this year to 4.3% YoY, above the 3% target.

September’s 25bp hike to 6.75% appears precautionary, but inflation approaching 5% could warrant another small move.

A further spike in commodity prices, which would bring stronger inflation and materially higher core rates, would likely put CIS resilience to a test, with CIS macro sensitivities back in focus.

We estimate that each 10% increase could add around 1ppt to the inflation trend in Kazakhstan and Uzbekistan and 1.5-2.0ppt in Armenia and Azerbaijan.

The central bank’s core mandate is to hit a 2% inflation target over time, while government spending/tax policy is better suited to address different regional economic conditions.

Risks would tilt toward earlier tightening if higher energy prices began feeding more broadly into inflation at the same time that domestic growth continues to improve.

The report revealed that both headline and core inflation picked up by more than expected to 3.7% and 2.6% respectively in September.

The report has raised market expectations for core PCE deflator to increase by around 0.3- 0.4%M/M in September.

Core inflation is projected to remain slightly above 2% through 1H 2027 before easing thereafter.

Overall, Peru emerges as the most exposed economy across Latin America combining direct Pacific coastal exposure with heavy dependence on exposed industries (notably fishing and agriculture), while Colombia is also highly exposed with drought affecting both agricultural output and energy production, and its hydropower dependence is likely to turn the climate shock into energy and food inflation.