Geopolitical tensions, turmoil in the debt market and Polish tax reforms
In the latest AFORTI.BIZ Market Report, we summarise the key events of the past week that dominated investor sentiment across financial markets. Global attention focused on sharply rising US bond yields amid pressure from record debt exceeding USD 40 trillion and an escalation in the conflict between the USA and Iran, which pushed Brent crude above USD 91 per barrel. In Poland, attention centred on surprisingly strong industrial data, announcements of major reforms to PIT, CIT and the lump-sum tax, as well as the historic announcement that S&P Dow Jones had upgraded Poland to developed market status. We invite you to read our analysis of how these developments affect corporate finances and liquidity.
Key takeaways
- Escalation in the Middle East: Tensions between the USA and Iran continue to generate uncertainty. Oil is trading above USD 91.
- Weak dollar: Concerns over US debt weakened the American currency, pushing USD/PLN below PLN 3.70.
- Resilient Polish industry: Industrial production rose by 5.1% y/y in July, exceeding market forecasts and supporting GDP.
Economic indicators
Poland
- Employment y/y (July): actual -0.8%; forecast -0.9%; previous -0.9%;
- PPI y/y (July): actual 2.8%; forecast 2.3%; previous 1.9%;
- Industrial production y/y (July): actual 5.1%; forecast 4.9%; previous 7.4%;
- Average wages in the enterprise sector y/y (July): actual 6.8%; forecast 6.2%; previous 5.9%;
Eurozone
- ZEW economic sentiment index (August): actual 31.4; forecast 25.9; previous 23.4;
- CPI y/y (July): actual 2.9%; forecast 2.9%; previous 2.8%;
- Core CPI y/y (July): actual 2.5%; forecast 2.5%; previous 2.4%;
- Manufacturing PMI (August): actual 52.8; forecast 51.8; previous 51.9;
- Services PMI (August): actual 51.7; forecast 51.5; previous 51.7;
Germany
- ZEW economic sentiment index (August): actual 34.2; forecast 30.1; previous 28.3;
- PPI y/y (July): actual 3.0%; forecast 2.7%; previous 1.8%;
- Manufacturing PMI (August): actual 54.1; forecast 52.1; previous 52.2;
- Services PMI (August): actual 48.5; forecast 50.1; previous 49.8;
- ZEW current conditions index (August): actual -61.1; forecast -68.8; previous -77.8;
United Kingdom
- Unemployment rate (June): actual 4.9%; forecast 4.8%; previous 4.9%;
- CPI y/y (July): actual 2.9%; forecast 2.9%; previous 2.8%;
- Retail sales y/y (July): actual 1.8%; forecast 2.2%; previous 3.8%;
- Claimant count change (July): actual -11.0K; forecast 16.5K; previous -6.4K;
- Average earnings including bonuses (June): actual 4.1%; forecast 4.0%; previous 4.4%;
USA
- Building permits (July): actual 1.443M; forecast 1.370M; previous 1.374M;
- Housing starts (July): actual 1.239M; forecast 1.340M; previous 1.415M;
- NY Empire State manufacturing index (August): actual 20.60; forecast 10.80; previous 15.60;
- Philadelphia Fed manufacturing index (August): actual 47.4; forecast 24.1; previous 41.4;
- Initial jobless claims: actual 206K; forecast 210K; previous 212K;
China
- Industrial production y/y (July): actual 4.5%; forecast 5.0%; previous 5.3%;
- Retail sales y/y (July): actual 0.6%; forecast 1.5%; previous 1.0%;
- Five-year loan prime rate (August): actual 3.50%; forecast 3.50%; previous 3.50%;
- Unemployment rate (July): actual 5.2%; forecast 5.1%; previous 5.0%;
- Fixed asset investment y/y (July): actual -8.7%; forecast -8.2%; previous -0.7%;
Currency market
Over the week, the euro (EUR) strengthened against the zloty (PLN) by 0.06%. The euro traded in a range of 4.3046–4.3324.
(source: www.money.pl)
The dollar (USD) weakened against the zloty (PLN) by 0.88%. The dollar traded in a range of 3.6805–3.7440.
(source: www.money.pl)
The pound sterling (GBP) weakened against the zloty (PLN) by 0.13%. The pound traded in a range of 5.0267–5.0637.
(source: www.money.pl)
Commodities market
Brent crude rose by 6.04%. The price traded in a range of USD 88.17–94.68 per barrel.
(source: www.money.pl)
Gold also rose by 5.20%. The price of gold traded in a range of USD 4,380.90–4,687.34 per ounce.
(source: www.money.pl)
Equity market
The WIG index fell by 1.06%. The index traded in a range of 149,323–153,512.
(source: www.money.pl)
What does this mean for businesses?
- Importers: A stable EUR/PLN exchange rate and a cheaper dollar reduce the cost of imports from Asia and the USA, making settlement planning easier
- Exporters: A strong zloty and the decline in USD/PLN may temporarily reduce the profitability of contracts settled in dollars
- B2C sector: The PIT reforms will increase middle-class incomes by PLN 6 billion, stimulating demand in retail and tourism
What drove the markets?
Tensions in the Middle East
The escalation of the conflict between the USA and Iran caused significant market turbulence. President Donald Trump declared economic war on Tehran, demanding its complete isolation, while Treasury Secretary Scott Bessent announced a naval blockade of Iranian ports aimed at toppling the regime. Renewed attacks on tankers and concerns over continuity of supply pushed Brent crude above USD 91 per barrel, triggering a sharp return of inflationary pressure.
Tax reform: changes to PIT, CIT and the lump-sum tax
The government’s proposed tax changes involve a significant reform of PIT, CIT and the lump-sum tax. The proposal provides for raising the second PIT threshold from PLN 120,000 to PLN 130,000 and introducing a 24% rate for income up to PLN 150,000, which is expected to leave approximately PLN 6 billion per year in taxpayers’ pockets. The CIT rate for the largest companies will rise to 22% and to 30% in the fuel and energy sector. The lump-sum tax limit will be reduced to EUR 250,000.
Bond market turmoil and record US debt
The US Treasury market is experiencing significant turmoil. Official US debt exceeded USD 40 trillion for the first time, generating annual interest costs of approximately USD 1 trillion. Yields on 30-year bonds surged to 5.33% – their highest level since 2007. In response, the Treasury Department announced an emergency bond-buyback programme worth an initial USD 2 billion and ultimately at least USD 4 billion.
Poland’s upgrade to developed market status and the risk of capital outflows
Poland’s upgrade to developed market status by S&P Dow Jones will take effect in September 2027. The decision is a prestigious distinction, but it also presents significant challenges. Poland’s share of the emerging markets index previously stood at 1.27%, while its share of the developed markets basket will be only 0.15%. This may lead to an outflow of some passive capital and force Polish companies to compete with global giants.
What to watch this week?
Zloty (PLN)
Retail sales and M3 money supply data on 24 August, as well as the unemployment rate for July on 25 August, will be key for the zloty. These figures will indicate the condition of Polish consumption and the stability of the labour market following the recent tax reform announcements.
Euro (EUR)
The common currency will be shaped by German GDP data on 25 August, as well as the GfK consumer climate index and the minutes of the ECB meeting on 27 August. Friday’s HICP data from France and German unemployment figures on 28 August will also be important.
Dollar (USD)
US GDP data for the second quarter on 26 August and the Jackson Hole symposium on 27–28 August will be key for the dollar. Conference Board consumer confidence data on 25 August and Michigan indicators on 28 August will also have a significant impact.
Pound sterling (GBP)
The CBI distributive trades survey on 26 August will affect the British currency. Friday’s Nationwide social deprivation index (HPI) reading on 28 August will also be important for the pound, assessing sentiment among British consumers in the property market.
Treasury Department | AFORTI.BIZ
If you are planning settlements in US dollars, check the current USD/PLN exchange rate and exchange currency on the AFORTI.BIZ platform.
Data as of: 24 August 2026