Market Summary by AFORTI: Strong zloty, optimism in European markets, inflation in the US, potential peace agreement in Ukraine
Economic indicators
Poland
1. GDP (k/k) (Q4): value: 1.3%; previous 0.1%
2. GDP (y/y) (Q4): value: 3.2%; forecast 3.2%; previous 2.7%
3. current account balance (EUR) (Sep): value: -803M; previous -521M
4. CPI (m/m) (Jan): value: 1.0%; previous 0.0%
5. CPI (y/y) (Jan): value: 5.3%; previous 4.7%
6. Change in employment (y/y) (Q4) P: value: 0.6%; forecast 0.8%; previous 1.0%
Eurozone
1. Sentix investor sentiment (Feb): value: -12.7; forecast -16.4; previous -17.7
2. Industrial production (m/m) (Dec): value: -1.1%; forecast -0.6%; previous 0.4%
3. industrial production (y/y) (Dec): value: -2.0%; forecast -3.1%; previous -1.8%
4. change in employment (y/y) (q4) P: value: 0.6%; forecast 0.8%; previous 1.0%
5. change in employment (k/k) (Q4) P: value: 0.1%; forecast 0.1%; previous 0.2%
6. total employment (Q4) P: value: 169,345.0K; previous 169,161.3K
Germany
1. CPI (m/m) (sty): value: -0.2%; forecast -0.2%; previous 0.5%
2. CPI (y/y) (Jan): value: 2.3%; forecast 2.3%; previous 2.6%
3. HICP (y/y) (Jan): value: 2.8%; forecast 2.8%; previous 2.8%
4. HICP (m/m) (Jan): value: -0.2%; forecast -0.2%; previous 0.7%
5. Wholesale Price Index (WPI) (Jan): value: 0.9%; forecast: 0.2%; previous 0.1%
6. Wholesale Price Index (WPI) (y/y) (Jan): value: 0.9%; previous 0.1%
France
1. France's unemployment rate (Q4): value: 7.3%; forecast: 7.5%; prior 7.4%
United Kingdom
1. BRC retail sales index (y/y) (Jan): value: 2.5%; forecast 1.1%
2. GDP (y/y) (Q4) P: value: 1.4%; forecast 1.1%; previous 1.0%
3. GDP (m/m) (Dec): value: 0.4%; forecast 0.1%; previous 0.1%
4. GDP (k/k) (Q4): value: 0.1%; forecast -0.1%; previous 0.0%
5. GDP (y/y) (Dec): value: 1.5%; forecast 1.0%; previous 1.1%
6. services index: value: 0.2%; forecast: 0.1%; previous 0.0%
USA
1. Conference Board Employment Trends Index (sty): value: 108.35; previous 109.23
2. Consumer inflation expectations (sty): value: 3.0%; forecast 3.0%; previous 3.0%
3. Redbook index (y/y): value: 5.3%; previous 5.7%
4. crude oil stocks: value: 4.070M; forecast 2.400M; previous 8.664M
5. core CPI (y/y) (sty): value: 3.3%; forecast 3.1%; previous 3.2%
6. statement from Fed Chairman Powell
7. unemployment claims: value: 1.850K; forecast 1.880K; previous 1.886K
8. PPI (m/m) (sty): value: 0.4%; forecast 0.3%; previous 0.5%
9. retail sales (m/m) (sty): value -0.9%; forecast -0.2%; previous 0.7%
China
1. CPI (y/y) (Jan): value: 0.5%; forecast 0.4%; previous 0.1%
2. CPI (m/m) (Apr): value: 0.7%; forecast 0.8%; previous 0.0%
3. PPI (y/y) (Jan): value: -2.3%; forecast -2.2%; previous -2.3%
4. M2 money stock (y/y) (Jan): value: 7.0%; forecast 7.3%; previous 7.3%
5. new loans (sty): value: $5,130.0B; forecast $770.0B; previous $990.0B
Foreign exchange market:
The Polish zloty (PLN) continues to strengthen against the euro (EUR), reaching levels seen seven years ago and oscillating between 4.1576 and 4.1947.
The Polish zloty (PLN) also strengthened by 2.59% against the US dollar (USD) and fluctuated between 3.9576 and 4.0716. There is a lot of fluctuation in the value of the dollar and a drop below 4 zlotys.
Oil and gold market
The price of BRENT crude oil fell by 0.19% in the past week and oscillated between USD 74.10 - 77.26/barrel.
The price of gold, on the other hand, rose by 0.27% and oscillated in a range of USD 2,886.05 - USD 2,966.19/ounce, surpassing the previous week's values.
Stock market
Another good week for the Polish stock market, the WIG index rose 2.96% this week and oscillated between 89,165 and 93,007, reaching record highs.
Cryptocurrencies
The price of Bitcoin (BTC) fell by 1.88% this week and oscillated in the range of 385,000 - 406,000 PLN.
Important events of the past week
Peace agreement in Ukraine: Speculation about a potential peace agreement in Ukraine increased. This in turn boosted indices on European stock exchanges, especially in Poland, and strengthened the zloty. Despite the scepticism of experts, the markets are assuming a ceasefire this year, which is translating into a rise in European share prices. Goldman Sachs forecasts a moderate increase in European equity valuations in the event of a limited ceasefire.
US inflation and Fed response: January inflation data in the US surprised economists, with CPI at 3% y/y and core inflation at 3.3%. This reduced market expectations for interest rate cuts by the Fed in 2025. Fed Chair Jerome Powell stressed that monetary policy should remain restrictive and that the Fed does not make decisions based on single inflation readings. Possible changes in US tariff policy could influence future Fed decisions.
The Government's Economic Plan for Poland: Donald Tusk's government has unveiled a comprehensive economic plan ‘Poland. A year of breakthrough’, aimed at accelerating development and modernising the economy. The plan envisages record investments in infrastructure, energy and innovation to the tune of PLN 650-700 billion. However, the scale of investment, in relation to GDP, is not very impressive, amounting to around 16.7% in 2025. The government has also announced a new housing programme to make it easier to buy your first home and reduce speculation.
Munich Security Conference: This year's Munich Security Conference had a special dimension, due to the changing relationship between the US and Europe and the war in Ukraine. Ukrainian President Volodymyr Zelenski declared that Vladimir Putin was blocking the Alliance's actions. Prime Minister Donald Tusk called for an urgent European action plan on the future of Ukraine and the security of the region. US Vice President J.D. Vance focused on threats to democracy and freedom of speech in the Union, rather than external threats from Russia and China.
AI Action Summit: At the AI Action Summit in Paris, key decisions were made on the future of artificial intelligence. France and the EU pledged billions of dollars in investment and set their sights on AI regulation. The US and UK refused to sign a global declaration of cooperation. In Poland, PFR and Google signed a memorandum of cooperation on the application of AI solutions, which is expected to pave the way for greater involvement of the corporation in Poland.
TREASURY DEPARTMENT
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