Market Summary by AFORTI: Macroeconomic events that affected the capital and financial markets
Macroeconomic Situation
The second week of June was rich in macroeconomic events that affected the capital and financial markets. Key releases included data on inflation, interest rates and economic indicators from the world's major economies.
Inflation and Interest Rates in Poland
The Central Statistical Office (CSO) confirmed CPI inflation for May 2024 at 2.5% y/y. Inflation m/m was 0.1%. An increase in VAT on food and the removal of "shields" on energy prices at the end of June may further boost inflation in the coming months. Commodity prices rose by 1.2% y/y and service prices by 6.2% y/y, compared to 1.1% y/y and 6.2% y/y, respectively, in April; the main source of the increase in annual inflation growth relative to April was fuel, whose prices in May were 3.6% higher than in May 2023 (down 1.2% y/y in April this year).
Eurozone inflation
Eurostat confirmed preliminary inflation estimates for May 2024 at 2.6% y/y. Inflation varied considerably across Eurozone countries. Inflation was highest in Belgium (4.9%) and Spain (3.8%), and lowest in Finland (0.5%) and Lithuania and Italy (0.8%).
Macroeconomic data from the US
The U.S. released data on consumer inflation (CPI), which came in at an annual rate of 3.3%, compared to 3.4% in April and the same forecast for May. Month-on-month it was 0.0%, while economists expected it to slow to 0.1% from 0.3% a month earlier. The Fed left US interest rates unchanged at 5.25%-5.50%. The Fed reiterated that additional monetary tightening will depend on macro data. The Fed forecasts U.S. interest rates at 5.1 percent at the end of 2024 and 4.1 at the end of 2025
Foreign Exchange Market
The zloty showed volatility in the period from June 10 to 16. The EUR/PLN exchange rate oscillated in the range of 4.33-4.39, ending the week at 4.38, and the USD/PLN in the range of 4.02-4.09. The volatility of the zloty was influenced by the FED's decision and more turbulence in international markets.
Oil and Gold Market
Brent crude oil prices from June 10-16 remained in the USD 79.55-82.63 per barrel range, indicating a stabilization of the market after earlier fluctuations. Gold prices continued to consolidate around the USD 2,310 - 2,349 per ounce level, awaiting further macroeconomic clues and interest rate decisions.
Stock Exchange
The WIG on June 10-16 recorded a decline of about 970 points, ending the session at 83,876 points. Investors continue to monitor the macroeconomic situation and the decisions of central banks, which may affect further movements of the index.
Summary
The second week of June 2024 brought important macroeconomic releases and interest rate decisions that affected the volatility of financial markets. In the coming days, investors will continue to watch economic data and central bank decisions, which may influence further developments in the capital markets.
TREASURY DEPARTMENT
AFORTI.BIZ