Market Summary by AFORTI: WSE correction, compensation for Ukraine support, weak labour market data
Economic indicators
Poland
1. PPI (y/y) (Jan): -0.9%; forecast -1.0%; previously -0.5%
2. Corporate sector payrolls (y/y) (Jan): value 9.3%; forecast 9.2%; previously 9.8%
3. Employment growth (y/y) (Jan): value -0.7%; forecast -0.9%; previously -0.6%
4. industrial production (y/y) (Jan): -1.4%; forecast -0.5%; previously 0.2%
5. construction production (m/m) (Dec): value 0.00%; forecast -2.7%; previously 0.58%
Euro zone
1) CPI (m/m) (Jan): 0.20%; previously -0.10%
2. CPI (y/y) (Jan): value 1.70%; previously 1.40%
3. current account balance, n.s.a. (Dec): value of $50.5B; previously $32.7B
4. manufacturing PMI (Feb) P: value 47.3; forecast 46.9; previously 46.6
5. S&P Global Aggregate PMI (Feb): value 50.2; forecast 50.5; previously 50.2
6. services PMI (Feb) P: value 50.7; forecast 51.5; previously 51.3
Germany
1. PPI (m/m) (Jan): -0.1%; forecast 0.6%; previously -0.1%
2. PPI (y/y) (Jan): volume 1.3%; forecast 0.8%; previously 0.5%
3. ZEW index of current economic conditions in Germany (Feb): value -88.5; forecast -90.0; previously -90.4
France
1. CPI (m/m) (Jan): value 0.1%; forecast -0.1%; previously 0.2%
2. CPI (y/y) (Jan): value 1.7%; forecast 1.4%; previously 1.3%
3. HICP (y/y) (Jan): volume 1.8%; forecast 1.8%; previously 1.8%
United Kingdom
1. CPI (y/y) (Jan): 3.0%; forecast 2.8%; previously 2.5%
2. average wages, excluding bonuses (Dec): value 5.9%; forecast 5.9%; previously 5.6%
3. average wages, including bonuses (Dec): value 6.0%; forecast 5.9%; previously 5.5%
USA
1. New York manufacturing index (Feb): value 5.70; forecast -1.90; previously -12.60
2. NAHB Housing Market Index (Feb): value 42; forecast 46; previously 47
3. building permits (Jan): value 1.483M; forecast 1.460M; previously 1.482M
4. house starts (Jan): value 1.366M; forecast 1.390M; previously 1.515M
5. Initial jobless claims: value 215K; forecast 219K; previously 214K
6. Philadelphia Fed industrial index (Feb): value 18.1; forecast 19.4; previously 44.3
7. US leading index (m/m) (Jan): value -0.3%; forecast -0.1%; previously 0.1%
8. pending home sales (Jan): value 4.08M; forecast 4.13M; previously 4.29M
9. University of Michigan inflation forecasts (Feb): value 4.3%; forecast 4.3%; previously 3.3%
10. Michigan 5-year inflation expectations index (Feb): value 3.5%; forecast 3.3%; previously 3.2%
China
1. property prices (y/y) (Jan): value -5.0%; previously -5.3%
2. PBoC base lending rate (Feb): value 3.60%; forecast 3.60%; previously 3.60%
3. PBoC lending base rate (Feb): value 3.10%; forecast 3.10%; previously 3.10%
Foreign exchange market
The Polish zloty (PLN) is stabilising against the euro (EUR), after large movements in the middle of the week and oscillated in a range of 4.1478 - 4.1824
Similarly, against the dollar (USD), the Polish zloty (PLN) returned to the levels of the end of last week and oscillated in a range of 3.9610 - 4.0190.
Oil and gold market
The price of BRENT crude oil rose throughout the week, but on Friday was 0.39% lower than at the start of the week, oscillating in a range of USD 74.22 - 77.10/barrel.
The price of gold, on the other hand, rose by 1.94%, reaching another peak and oscillating in a range of US$2,890.49 - US$2,972.19/ounce.
Stock market
Another good week for the Polish stock market. On Wednesday, after record levels, there was a correction of the increases. The index price oscillated in the range of 91 472 - 95 230.
Cryptocurrencies
The price of Bitcoin (BTC) fell by 1.63% this week and oscillated in the range 375,005 - 398,000.
Important developments over the past week
Increased interest in the arms sector: Increased geopolitical tensions and pressure to increase defence spending have led to increased interest in the arms sector. European leaders have been invited to discuss increased defence spending. US officials have signalled that the US will no longer fund Europe's security, prompting European leaders to rebuild their own military capabilities. Jagoda Fryc offers advice on how to invest in the arms sector.
US demands compensation for Ukraine support: the US has proposed a rare earth metals deal to Ukraine to compensate for past aid. Donald Trump accused Volodymyr Zelensky of ripping up the deal, which would have given the US a 50 per cent share of revenue from Ukraine's rare earth resources. CNN assessed that the pressure on Ukraine is a form of extortion and an attempt to exploit the conflict-affected nation.
WSE correction: A period of dynamic increases on the WSE was followed by a correction. After ten days of almost uninterrupted increases, the Warsaw trading floor saw declines on Wednesday. The previous leaders of the bull market, i.e. Ukrainian companies and banks, were particularly heavily discounted. Analysts stressed, however, that after such strong growth at the beginning of the year, a correction was a natural market reaction. The German DAX also reacted nervously, but both Polish and German indices rose again on Friday.
Weaker labour market data: Data from the Central Statistical Office (CSO) show that wages in companies are growing more slowly and the decline in employment has accelerated. Average wages rose by 9.2%, while employment fell by 0.9%. In both cases, the data proved weaker than forecasts.
Capital markets analysis for 2025: In his analysis for 2025, Dawid Bąbol, one of the managers of Beta ETF, the largest provider of Polish ETFs, emphasises that geopolitics has a key impact on the economy, with rivalry between the US, China and Russia shaping global markets. He points out that the US is seeking to maintain its hegemony, which will influence its actions towards Ukraine, China and Europe, while Poland could benefit from strengthening its position in the region. Bąbol also forecasts dollar depreciation and increases on the WSE, as well as continued demand for gold, which could benefit investors.
TREASURY DEPARTMENT
AFORTI.BIZ