Aforti Exchange

Market Summary by AFORTI: Declines in Inflation and Reduction in Interest Rates in Europe, Stabilisation in the Polish Market.

21 October 2024

Macroeconomic Situation

Europe

Eurozone:

  • Inflation (final reading for September): below expectations. Value: 1.7% y/y; forecast: 1.8% y/y; previous: 2.2% y/y.
  • The European Central Bank (ECB) decided to cut interest rates by 25 basis points, bringing the deposit rate down to 3.25%. The decision was a reaction to slowing GDP growth and lower inflation in the euro area.
  • CPI inflation France: below expectations. Value: 1.1% y/y; forecast: 1.2% y/y; previous: 1.8% y/y.
  • CPI inflation Spain: in line with expectations. Value: 2.4% y/y; forecast: 2.4% y/y; previous: 2.7% y/y.

Poland:

  • CPI inflation (final reading for September): in line with the first reading. Value: 4.9% y/y; first reading 4.9% y/y.
  • Core inflation (for September): in line with expectations. Value: 4.3% y/y; forecast: 4.3% y/y; previous: 3.7% y/y.

Germany:

  • ZEW Index (reflecting sentiment among analysts and institutional investors): Above expectations. Value: 13.1; forecast: 10; previous: 3,6.

United Kingdom: 

  • Unemployment rate: lower than expected. Value: 4.0%; forecast: 4.1%; previous: 4,1%.
  • CPI inflation (final reading for September): lower than expected. Value: 1.7% y/y; forecast: 1.9% y/y; previous: 2.2% y/y.
  • Retail sales: above expectations. Value: 4.0% y/y; forecast: 3.2% y/y; previous: 2.2% y/y.

USA

  • Industrial production: below expectations. Value: -0.3% m/m; forecast: -0.2% m/m; previous: 0.3% m/m (revised from 0.8%).
  • Retail sales: strong US retail sales data supported the dollar. Value: 0.4% m/m; forecast: 0.3% m/m; previous: 0.1% m/m.
  • Gas inventories: below forecasts. Increase of 76 billion cubic feet from the previous week, forecast 80 billion, previous: 82 billion.

Foreign exchange market

The zloty weakened against the euro and weakened against the US dollar between 14 and 18 October. The EUR/PLN exchange rate on a weekly basis oscillated in the range of 4.2928 - 4.3048 (and reached 4.3174 on Thursday 17.10) and the USD/PLN in the range of 3.9288-3.9718, in essence, the zloty weakened systematically.


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Oil and gold market

Brent crude oil prices from 14 to 18 October remained in the USD 78.05-73.18 per barrel range, indicating a sizable drop in prices.

Gold prices rose from USD 2665.80 to USD 2736.40 per ounce, it was a week of steady increases in the gold price per ounce.

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Stock market

The WIG from 14 to 18 October fell by around 830 points, ending the session at 82,650 points with a weekly turnover of 5,824,448,368. It was a week of moderate volatility on the WSE (apart from Thursday 17.10 where the WIG fell to 81,818) and a week of the fourth ever IPO on the Polish stock exchange - Żabka, which was successful but the IPO and the first days of trading were disappointing.

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Summary

Last week, investors' attention was drawn to the stock market debut of Żabka, as well as inflation in Poland and the decisions of the European Central Bank (ECB). Żabka, which has over 11,000 shops, made its debut on the Warsaw Stock Exchange, but despite high expectations, the share price ended the day without significant increases. Investors were quick to realise profits, resulting in no spectacular increases.

The ECB cut interest rates by 25 basis points, bringing the deposit rate down to 3.25%. The decision was taken in the wake of deteriorating macroeconomic data in the eurozone, where GDP growth slowed and inflation slowed to 1.7%.

In Poland, inflation is still high. According to the EU methodology, in September it amounted to 4.3%, which kept our country in third place in terms of price growth in the European Union.

TREASURY DEPARTMENT

AFORTI.BIZ

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