Market Summary by AFORTI: Rising inflation in Poland, stable Interest Rates, weakening of the złoty, and the impact of the Middle East conflict on financial markets
Macroeconomic Situation
Europe
- Eurozone:
- PMI data (final): September PMI data for the industrial and services sectors above expectations.
- PMI for industry: 45.0; forecast: 44.8, previous: 44,8
- PMI for services: 51.4; forecast: 50.5, previous: 52,9
- CPI inflation (preliminary): in line with expectations. September: value: 1.8% y/y; forecast: 1.8% y/y; previous: 2.2% y/y.
- Germany:
- CPI inflation: fell below expectations. Value: 1.6% y/y; forecast 1.7% y/y; previously 1.9% y/y.
- United Kingdom:
- PMI data (final): below expectations.
- PMI for services: 52.4, forecast: 52.8, previous: 52,8
- GDP data (final): well below expectations. GDP annualised: 0.7% y/y; forecast: 0.9% y/y; previous: 0.3% y/y.
- Poland
- CPI inflation: Poland's September preliminary CPI inflation reading was in line with forecasts. CPI for September (y/y): value: 4.9%; forecast: 4.9%; previous: 4,3%.
- PMI: for industry above expectations. September: actual: 48.6; forecast: 47.3; previous: 47,8.
- MPC decision: the Monetary Policy Council decided to keep interest rates unchanged, which was in line with market expectations. Interest rate: value: 5.75%.
- USA
- JOLTS report: labour market data from the US indicated a better than expected situation. Value: 8.04 million; expected: 7.673 million; previously: 7.711 million.
- ISM report: index falls by strongest since May 2023. ISM for manufacturing 47.2; expected: 47.5; previously: 47,2.
- Dallas Index: for September above expectations. Value: -9.0; expected: - 10.3; previous: -9,7.
- Applications for unemployment benefits: slightly above expectations. Value: 225k; expected: 222k; prior: 219k.
- NFP data: Change in non-farm payroll employment (NFP) strongly above expectations. Value: 254k; forecast: 140k; previous: 142k.
Foreign exchange market
The zloty weakened against the EUR and decisively weakened against the USD between 30 September and 04 October. On a weekly basis, the EUR/PLN exchange rate oscillated in the range of 4.2791 - 4.313 and the USD/PLN exchange rate in the range of 3.8193-3.9118, basically weakening steadily.
Oil and gold market
Brent crude oil prices from 30 September to 04 October remained in the USD 71.36-78.17 per barrel range, indicating an increase in prices. The behaviour of the price of a barrel of oil was heavily influenced by the news of Iran's missile attack on Israel, as well as the news that US oil stocks are unexpectedly increasing (current: +3.8900 million; forecast -1.500 million; previously -4.471 ml).
Gold prices fell from USD2684.45 to USD2673.35 per ounce, reaching USD2,649 on Monday (30.09), and there was limited market reaction when Iran attacked Israel, although gold approached the USD2,670 per ounce area. Historical peaks for gold are at US$2,685 per ounce.
Stock Exchange
The WIG fell by around 2,850 points between 30 September and 04 October, ending the session at 82,011 points with a weekly turnover of 5,625,301,972. It was a week of declines on the WSE.
Summary
Last week, financial markets were dominated by the escalation of the Middle East conflict and macroeconomic data from the US and Poland. In the US, labour market data proved excellent, which strengthened the dollar. In Poland, inflation rose to 4.9% in September and the Monetary Policy Council left interest rates unchanged, forecasting any reductions after Q1 2025 at the earliest. Asian markets were positively affected by the Chinese government's economic stimulus measures, which was particularly favourable for investment funds from that region.
TREASURY DEPARTMENT
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