NBP to remain on hold

PMI readings in CEE are expected to remain at expansionary territory, echoing the upward trend in German PMI. CEE currencies would likely experience appreciation pressures against EUR in the near term, as the prospects of more easing from ECB is now higher. 

In Poland, NBP will likely stick with its forward guidance and remain on hold in its Wednesday MPC meeting. Over the forecast horizon, cuts are possible if inflation remains below target for an extended period and growth weakens.

"But, the next move is more likely to be a hike. If NBP maintains its "on hold" strategy, PLN will likely see appreciation pressure vs EUR given the increasing likelihood of further ECB easing", says Barclays.