No surprise in Poland's inflation data.

EUR/PLN

Consumer prices fell by 0.2% mom and 0.2% yoy in July. The reading was in line with expectations. The fall resulted mainly from declining food, clothing and transport prices. The figure was also depressed by a base effect from last year, when Poland raised waste collection costs. A Russian ban on imports of many Polish food products, in force since early August, is likely to aggravate declines in food prices in the coming months, possibly extending the period of deflation in Poland. We expect stronger price growth at the end of this year (November and December). However, inflation will continue to run well below the lower limit of the acceptable range of deviations from the inflation target (1.5-3.5%).

• Current account balance in June 2014 was negative and amounted to EUR 391 mln. The negative balance of the current account has been influenced by: positive balance of services (EUR 502 mln), trade in goods (EUR 333 mln) and current transfers (EUR 239 mln) as well as negative balance of income (EUR 1465 mln).
• In June 2014, exports was estimated at EUR 13,7 mn while imports was estimated at EUR 13.3 mln. When compared with data for June 2013 exports in goods increased by 7.3% while imports went up by 9.6%. Lower exports dynamics when compared with the previous month resulted mostly form decreased exports to Russia and Ukraine.
• Flash GDP reading for the second quarter will be published tomorrow. We expect a reading of 3.0% yoy vs. median forecast of 3.2% yoy.

Significant technical levels:

Resistance: 4.2125 (high Aug 12), 4.2255 ( high Aug 8), 4.2350 (high Mar 17)

Support: 4.1800 (low Aug 6), 4.1735 (200-dma), 4.1632 (low Aug 5)

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