Market Summary by AFORTI: Announcement of Trump-Putin meeting, China's new transport route, prospects for US interest rate cuts

2025-10-20

Last week was dominated by: the announcement of the Trump-Putin meeting, which raised hopes for an end to the conflict in Ukraine and a strengthening of the zloty, and the opening of China's new transport route through the Arctic (Northern Sea Route, NSR), which presents an opportunity for Polish ports. In the coming week, the markets will focus on key macroeconomic data from Poland (including employment growth and industrial production, retail sales and the unemployment rate), economic sentiment indicators from the Eurozone (Composite PMI Indices), and CPI inflation data from the USA and the UK.

Economic indicators

Poland

1. Current account balance (EUR) (August): -3.087M; forecast: - ; previous: -1.168M

2. CPI (y/y) (September): 2.9%; forecast: 2.9%; previous: 2.9%

3. CPI (m/m) (September): 0.0%; forecast: 0.0%; previous: 0.0%

4. Core CPI (y/y) (September): 3.2%; forecast: 3.1%; previous: 3.2%

Eurozone

1. CPI (y/y) (September): 2.2%; forecast: 2.2%; previous: 2.0%

2. Core CPI (y/y) (September): 2.4%; forecast: 2.3%; previous: 2.3%

3. HICP in France (y/y) (September): 1.1%; forecast: 1.1%; previous: 0.8%

4. Industrial production (m/m) (August): -1.2%; forecast: -1.6%; previous: 0.5%

5. ZEW index of current economic conditions in Germany (October): -80.0; forecast: -75.0; previous: -76.4

6. ZEW economic sentiment in Germany (October): 39.3; forecast: 41.2; previous: 37.3

Germany

1. HICP index in Germany (m/m) (September): 0.2%; forecast: 0.2%; previous: 0.1%

2. HICP in Germany (y/y) (September): 2.4%; forecast: 2.4%; previous: 2.1%

3. CPI in Germany (y/y) (September): 2.4%; forecast: 2.4%; previous: 2.2%

4. CPI in Germany (m/m) (September): 0.2%; forecast: 0.2%; previous: 0.1%

France

1. CPI in France (m/m) (September): -1.0%; forecast: -1.0%; previous: 0.4%

2. HICP in France (m/m) (September): -1.1%; forecast: -1.1%; previous: -1.1%

United Kingdom

1. GDP (m/m) (August): 0.1%; forecast: 0.1%; previous: -0.1%

2. Factory goods production (m/m) (August): 0.7%; forecast: 0.2%; previous: -1.1%

3. Average earnings, including bonuses (August): 5.0%; forecast: 4.7%; previous: 4.8%

4. Jobless claims (September): 25.8K; forecast: 10.3K; previous: -2.0K

5. Employment change 3m/3m (m/m) (August): 91K; previous: 232K

6. GDP q/q (August): 0.3%; forecast: 0.3%; previous: 0.2%

USA

1. Crude oil inventories: 3.524M; forecast: 0.300M; previous: 3.715M

2. Philadelphia Fed manufacturing index (October): -12.8; forecast: 8.6; previous: 23.2

3. NAHB housing market index (October): 37; forecast: 33; previous: 32

4. Weekly API crude oil stocks: 3.524M; forecast: 0.120M; previous: 2.780M

5. Federal budget balance (September): 198.0B; forecast: 42.3B; previous: -345.0B

6. Federal Reserve balance sheet: 6,596B; previous: 6,591B

7. Philadelphia Fed index of new orders (October): 18.2; previous: 12.4

8. Philadelphia Fed employment report (October): 4.6; previous: 5.6

9. Redbook Index (y/y): 5.9%; previously: 5.8%

10. New York Manufacturing Index (October): 10.70; forecast: -1.80; previously: -8.70

China

1. New loans (September): 1,290.0B; forecast: 1,460.0B; previous: 590.0B

2. Total Social Financing in China (September): 3,530.0B; forecast: 3,320.0B; previous: 2,570.0B

3. Exports (y/y) (September): 8.3%; forecast: 6.0%; previous: 4.4%

4. Import balance (y/y) (September): 7.4%; forecast: 1.5%; previous: 1.3%

5. Import value (September): 7.50M; previously: 1.70M

6. CPI (y/y) (September): -0.3%; forecast: -0.2%; previously: -0.4%

Currency market

This week, the euro (EUR) weakened against the Polish zloty (PLN) by 0.51%. The euro price fluctuated between 4.2355 and 4.2667.

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Similarly, the US dollar (USD) weakened against the Polish zloty (PLN) by 0.80%. The price of the dollar fluctuated between 3.6247 and 3.6956.

Oil and gold market

The price of BRENT crude oil fell by 1.33%. The price fluctuated between USD 60.19 and USD 63.92 per barrel.

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Gold rose by 5.75% for another week. The price of gold fluctuated between USD 4,073.75 and USD 4,390.46 per ounce.

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Stock exchange

The WIG index fell by 0.17%. The WIG index price fluctuated between PLN 105,529 and PLN 109,108.

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Cryptocurrencies

The price of Bitcoin (BTC) fell by 4.69%. The price of Bitcoin fluctuated between PLN 385,500 and PLN 432,333.

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Important events of the past week

Announcement of Trump-Putin meeting: US President Donald Trump announced last week that a telephone conversation with Vladimir Putin had brought significant progress. An imminent meeting of high-level delegations was announced, to be followed by a summit of leaders in Budapest, hosted by Viktor Orbán. These announcements raised hopes for an end to the conflict in Ukraine. The markets interpreted this as a factor supporting the strengthening of the Polish zloty and a decline in the EUR/PLN exchange rate below 4.25.

Prospects for US interest rate cuts: Last week, speculation about interest rate cuts in the US intensified, partly as a result of statements by Federal Reserve officials. Chairman Jerome Powell reassured the stock markets by signalling the imminent end of the Fed's balance sheet reduction and a likely cut in interest rates. In addition, C. Waller of the Fed publicly supported further cuts as early as the October meeting. These expectations, combined with a disastrous reading of the Philadelphia Fed index (down to -12.8 points from +23.2 points a month earlier), had a negative impact on the US dollar, leading to a further increase in the EUR/USD exchange rate and a decline in the USD/PLN exchange rate.

China's new transport route through the Arctic: China, with Russian support in the form of icebreakers, has opened the Northern Sea Route (NSR), which cuts the time it takes to transport goods to Europe by half compared to the traditional route through the Suez Canal. The ship ‘Istanbul Bridge’ has arrived at the port of Felixstowe and is scheduled to sail on to Rotterdam, Hamburg and Gdańsk, symbolising the opening of a third logistics and transport route. For Poland, this represents a huge economic opportunity, as our ports, especially Gdańsk, stand to gain significantly from this change, although we face strong competition from German, British and Dutch ports.

Inflation in Poland unchanged: Core inflation in Poland (excluding food and energy prices) stood at 3.2% year-on-year in September 2025, in line with expectations, remaining unchanged from August. The National Bank of Poland (NBP) reported that month-on-month core inflation was 0.2%, also unchanged from the previous month. Inflation excluding administered prices also remained unchanged (2.5% y/y). This reading came as no surprise to the markets and therefore did not trigger any reaction in the Polish currency, while the stabilisation of inflation may lead to further interest rate cuts in Poland.

Events worth noting this week

Outlook for the zloty: The valuation of the zloty in the coming week will depend on the publication of important macroeconomic data from the domestic economy. Investors will learn about indicators concerning the condition of the corporate sector, i.e. Employment Growth and Industrial Production, which will be published on Monday, 20 October. In the second half of the week, markets will focus on data from the consumer segment – Retail Sales (Wednesday, 22 October) and the official Unemployment Rate (Thursday, 23 October).

Outlook for the euro: Economic sentiment indicators and communication from the European Central Bank (ECB) will be key for the euro. Investors should watch the Composite PMI Indices (Friday, 24 October) for Germany and the entire Eurozone, which will summarise the economic situation in October. Equally important will be public statements by ECB members, including two speeches by ECB President Christine Lagarde (Tuesday, 21 October and Wednesday, 22 October), which may provide clues about future monetary policy.

Outlook for the dollar: The main risk factor for the dollar remains the uncertainty surrounding the ongoing government shutdown, which is forcing severe staff cuts and potentially affecting the availability of key data. Inflation data measured by the CPI (Friday, 24 October) will be key to expectations of Fed rate cuts. In addition, labour market data measured by the Number of Initial Jobless Claims (Thursday, 23 October) and economic activity indicators such as the Services PMI (Friday, 24 October) will be important.

Outlook for the pound: Investors will focus on inflation data and economic activity indicators in the United Kingdom. The most important publication of the week will be the CPI (Wednesday, 22 October), which will indicate consumer inflation dynamics in September. Investors should also monitor Retail Sales data (Friday, 24 October) and the Composite PMI (Friday, 24 October) for October, which will provide insight into the health of various sectors of the economy.

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