To the moon!

What else caught our eye:

• Unemployment rate inched down to 6.4% in March, with a seasonal decline of the number of unemployed (by 21k). The unemployment rate is bound to fall in the coming months, driven by seasonal factors and reopening of the economy.
• The government announced a plan to ease the anti-pandemic restrictions. Starting from May 1^st, the limit of people attending sport activities will be doubled. From May 4^th, art galleries, museums, stores in the shopping malls, as well as furniture and construction markets will be reopened under sanitary regime. Hotels will start to work at a 50% capacity starting from May 8^th. On May 15^th restaurants will be allowed to reopen within their outdoor spaces, along with further loosening in the above mentioned entities. Hybrid-schooling will be introduced for all kids, starting from 4^th grade of elementary school. Outdoor events will be allowed, if attended by less than 25 people. Mask-wearing order may be lifted given a low number of new Covid-19 cases. Finally, from May 29^th on, all the above mentioned restrictions will be further loosened, including eg. restaurant indoor activities. In our view the economic impact of these actions will be significant, driving a close to 2-digit recovery in 2q21.
• President A.Duda said that A.Glapinski is a very good NBP governor, thus, implicitly, making him the top candidate to serve for the second (6Y) term (the first one ends in mid-2022).

The week ahead:

• We expect no change to Poland’s rating by Moody’s today. However, in our opinion, Moody’s is the top candidate to upgrade the country’s rating after the pandemic (assuming continuation of the pre-pandemic trends).
• We estimate PMI manufacturing rose to 54.8 in April from 54.3 in March, on rebounding orders and on rising delivery times, due to supply shortages.
• The MPC will leave rates and other policy parameters unchanged despite mounting inflationary pressure (inflation will likely stay around 4% throughout the rest of the year). In our view probability of rate hikes in 2021 is still low.