Commerzbank’s Tatha Ghose reviewed March inflation data for Poland, the Czech Republic and Hungary after a recent rise in energy prices. He reported that headline inflation increased in March, as expected, following the jump in global energy costs.
He said any spill-over into broader prices was not yet visible in March, as the energy rise was recent. He noted higher import costs may appear over time as forward contracts expire.
Eurostat HICP data published last week showed core HICP edged up in March. The increase was described as mild and within normal month-to-month statistical variation.
Regional central banks are expected to pause further interest-rate cuts until oil prices fall well below current levels. This pause is intended to allow time to see whether second-round effects emerge, while current data show negligible secondary pressure.
We are seeing a familiar pattern today, April 20, 2026, with the recent spike in energy prices pushing Brent crude back towards $100 a barrel. This situation closely mirrors the energy shock we analyzed back in March 2025, which caused a temporary jump in headline inflation across Poland, the Czech Republic, and Hungary. The critical question for us now is whether this price shock will feed into more persistent core inflation, forcing central banks to react.
Looking back at the data from early 2025, we saw that the secondary inflation effects were minimal, with core measures showing only statistically insignificant upticks. Regional central banks responded by pausing their rate-cutting cycles but did not have to turn more aggressive. This history suggests that the initial market reaction to an energy-driven inflation spike can often be more hawkish than the central banks’ eventual policy path.
This creates a potential opportunity in interest rate markets, where traders may be pricing in an overly aggressive response from central banks in the region. Recent data from Poland’s statistical office shows March 2026 core inflation rose a modest 0.3% month-on-month, a figure that, much like last year, does not signal widespread secondary pressures yet. Despite this, forward rate agreements are pricing out nearly all rate cuts for the zloty for the remainder of the year.
Given this, we see value in positioning for a less hawkish outcome than the market currently expects. Derivative traders should consider entering receiver interest rate swaps, which would profit if rate expectations fall in the coming weeks. Similarly, selling out-of-the-money call options on currency pairs like EUR/PLN could be an effective strategy to capitalize on fading hawkish sentiment.
The primary risk is that today’s labor market is tighter than it was in 2025, with recent Czech wage growth data for Q4 2025 showing a robust 6.5% increase. This could make policymakers more cautious about potential second-round effects this time. However, until we see concrete evidence of this in the core inflation numbers, the playbook from 2025 remains our guide.
