Market Summary by AFORTI: Stable interest rates in Poland and decline in the value of gold
Macroeconomic Situation
Europe
· Eurozone: Eurozone manufacturing PMI readings were above expectations, indicating a slight improvement in the sector's health. The final industrial PMI came in at 45.8, compared to forecasts of 45.6.
o Industry PMI Germany: value: 42.4; forecast: 42.1; previous: 43,2
o PMI industry France: value: 43.9; forecast: 42.1; previous: 44
· Germany:
o German factory orders data came as a positive surprise, recording a rebound after an earlier decline. Annualised reading: 3.7% y/y (expected: -1.9% y/y; previous: -11.2% y/y).
o German industrial production, meanwhile, disappointed, suggesting further challenges for the economy. Industrial production for July: -2.4% m/m (expected: -0.4% m/m; previous: 1.7% m/m).
· Switzerland:
o Swiss CPI inflation for August was 1.1% y/y, which was below forecasts (1.2% y/y).
o Swiss GDP grew faster than expectations. Swiss GDP growth (y/y): value: 1.8%; forecast: 1.4%; previous: 0,6%. The data suggest further stabilisation of the Swiss economy, although there is speculation about possible interest rate cuts by the Swiss National Bank.
· Poland:
o The Monetary Policy Council left interest rates unchanged, which was in line with market expectations. However, the market does not expect quick interest rate cuts.
o PMI industry Poland: value: 47.8; forecast: 47.4; previous: 47,3
USA
- Data from the US this week disappointed. The ISM reading for manufacturing for August was 47.2, which was below forecasts (47.5), suggesting a weakening of the industrial sector. The difference is not large enough to suggest a strengthening of the scenario of a 50bp interest rate cut in September, which currently remains one of the main interests for investors in the US market.
- Labour market: The number of new jobs (NFP) for August came in at 142k, which was below forecasts (160k) vs 114k previously. Unemployment claims, on the other hand, were below expectations (227k vs 231k expected).
- The Challenger data pointed to a further weakening of the US labour market, the reading reaching 75.89k planned layoffs vs. last month's reading of 25.88k.
Foreign exchange market
The zloty remained stable against the euro and strengthened against the US dollar between 02 and 06 September. On a weekly basis, the EUR/PLN exchange rate oscillated between 4.2812 and 4.2790, with basically no major volatility, and the USD/PLN exchange rate oscillated between 3.8684 and 3.8489.
Oil and gold market
Brent crude oil prices from 02 - 06 September remained in the USD 76.66-71.49 per barrel range, indicating a significant market decline. Gold prices fell slightly from USD 2535.90 to USD 2525.70 per ounce.
Stock market
The WIG on 02 - 06 September recorded a drop of around 2913 points, ending the session at 81,744 points with a weekly turnover of 5,213,716,758. It was a week of light volatility on the WSE albeit with relatively lower turnover than the last holiday weeks.
Summary
The week of 02 - 06 September 2024 brought mixed macroeconomic data. In Europe, better-than-expected Eurozone manufacturing PMI data and a rebound in German orders provided positive signals, although weakening industrial production in Germany and weak inflation in Switzerland suggest further challenges for the region. In the US, labour market data came in below expectations, adding to uncertainty about further Fed decisions. In the commodities market, oil continued its declines, while gold lost ground amid volatility in the markets. In Poland, the MPC, as expected, kept interest rates unchanged at its first meeting after the summer break. The chances of a cut this year are basically nil, although the market sees minimal room for it.
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