Inflation is sufficiently close to the 10% YoY mark, while the real economy is proving much weaker than markets had anticipated. As a result, it is quite likely that NBP will kick-start its rate cutting cycle in September with a 25 bps reduction. 

Such a prospect was increasingly priced-in over the past month, leading to the Polish Zloty underperforming the Hungarian Forint. This relative underperformance of Zloty is likely to extend further.