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Market Summary by AFORTI: Weak PMI and IFO data in Europe. In the US, real estate and labour market data were better than expected.

30 September 2024

Macroeconomic Situation

Europe

- Eurozone: 

  • PMI data: September's (preliminary) PMI data for the manufacturing and services sectors came in below expectations, indicating weakening economic activity.
  • PMI for industry: 44.8; forecast: 45.6, previous: 45,6
  • PMI for services: 50.5; forecast: 52.1, previous: 53,3

- Germany: 

  • PMI data: for September (preliminary) below expectations.
  • PMI for industry: 40.3; forecast: 42.3, previous: 42,1
  • PMI for services: 50.6; forecast: 51.0, previous: 51,4
  • IFO index: measuring business sentiment, also fell below expectations. Value: 85.4; forecast: 86, previous:86.6.
  • Unemployment: August data showed 17,000 more unemployed, 13,500 were expected after 2,000 in July. The unemployment rate was 6%, unchanged and in line with forecasts.

- UK: 

  • PMI data: below expectations.
  • PMI for industry:  51.5, forecast: 52.2, previous: 52.5
  • PMI for services: 52.8, forecast: 53.5, previous: 53,7

- France:

  • CPI inflation: falls below expectations. Value: 1.2% y/y; forecast: 1.6% y/y; previous: 1.8% y/y

- Spain:

  • CPI inflation: falls well below expectations. Value: 1.5% y/y; forecast: 1.9% y/y; previous: 2.3% y/y

As expected, the Swiss National Bank cut interest rates by 25bp. Swiss interest rate: value: 1.0%; forecast: 1.0%; previous: 1,25%.

- USA

  • PCE inflation: falls below expectations. Value: 2.2% y/y; forecast: 2.7% y/y; previous: 2.6% y/y
  • GDP data (for Q2): higher than expectations. Value: 3.0% k/k; forecast: 2.9% k/k; previous: 3.0% k/k
  • PMI data: marginally better than expectations.
  • PMI for industry:  47.0, forecast: 48.6, previous: 47.9
  • PMI for services: 55.4, forecast: 55.3, previous: 55,7
  • Consumer sentiment: US consumer sentiment data came in weaker than expected. Value: 98.7; forecast: 103.9; previous: 105,6

Foreign exchange market

Between 23 and 27 September, the zloty strengthened against the euro and appreciated strongly against the US dollar. The EUR/PLN exchange rate on a weekly basis oscillated in the range of 4.2785 - 4.2761, reaching 4.2634 on Wednesday (25.09), while the USD/PLN exchange rate oscillated in the range of 3.8571-3.8368, basically strengthening steadily, with the zloty firmly appreciating to 3.8117 on Wednesday (25.09). 

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Oil and gold market

Brent crude oil prices from 23 to 27 September remained in the USD 73.82-71.99 per barrel range, indicating a decline in prices. The behaviour of the price of a barrel of oil was heavily influenced by news of a strong decline in US inventories (inventory change: -4.47 million brk, expected: -1.43 million brk; previously: -1.63 million brk) and news on the stabilisation of the situation in Libya (nomination of a joint candidate for the head of the central bank for the interim period). Gold prices rose from US$2,643.35 to US$2,680.90 per ounce, breaking through the US$2,701.20 level on Thursday (26.09).

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Stock Exchange

The WIG from 23 - 27 September recorded an increase of around 2970 points, ending the session at 84,947 points with a weekly turnover of 7,433,154,590. It was a week of considerable volatility on the WSE.

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Summary

The week of 23 - 27 September 2024 brought mixed macroeconomic data. In Europe, surprisingly weak PMI and IFO data suggest further challenges for the economy, particularly in Germany and the UK. In the US, real estate and labour market data were better than expected, although inflation remains a concern. In the commodities market, oil continued its declines, while gold gained ground on the back of a weaker dollar. In the coming week, the markets will have a lot of important data to analyse. In Poland, the most important event will be the Monetary Policy Council's (MPC) decision on interest rates, which will be announced on 2 October. In addition, investors will be following inflation readings and PMI data from various countries. Also important will be reports from the US labour market, including the so-called ‘payrolls’, which will be released on 4 October and will be a key indicator for the Fed in shaping monetary policy. The Chinese market will start the week with a ‘Golden Week’ holiday, during which stock exchanges and workplaces will be closed. PMIs and inflation and unemployment reports will be published across Europe and the US.


TREASURY DEPARTMENT

AFORTI.BIZ

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