Key events in EMEA next week

Turkey's newly appointed central bank governor Kavcioglu signalled that there would not be a major policy reversal and an early policy rate cut. The latest inflation outlook with the continuing uptrend and the recent currency volatility, the central bank will likely remain on hold at the April meeting, keeping the policy rate unchanged at 19%.

Next week the most important news from Poland will be the Supreme court ruling on foreign currency mortgages.

We'll also get the final CPI reading for March. We assume that it will correspond to the flash estimate. The central bank will also release its estimates for core CPI, which we expect increased to 3.8-3.9% YoY in March from 3.7% in February. In our opinion, the higher inflation reading will not change the dovish stance of the Monetary Policy Council.

On Wednesday, the MPC stated that the acceleration in inflation in Poland results from one-off factors beyond the Council's control.

Given the increase in oil prices, we expect fuel prices to surge by more than 5% MoM in March, pushing headline CPI higher in YoY terms from 2.1% in February to 2.4% and headline print is likely to accelerate further in April and May close to 3% amid low base effect from last year when fuel prices hit its lows.

This isn't a game-changer just yet for the central bank, as the Bank is waiting for a better pandemic situation to start hiking rates in the second half of this year.