Market Summary by AFORTI: Decline in retail sales in Poland, Chinese tariffs on the EU, increase in silver prices, changes in the composition of the Monetary Policy Council

Last week, the key events were a decline in retail sales in Poland, China's introduction of retaliatory tariffs on EU dairy products, and changes in the composition of the Monetary Policy Council. In the asset markets, the WIG index, oil, gold and Bitcoin recorded gains, while the zloty strengthened against the dollar but lost value against the euro. In the coming week, investors' attention will focus on the preliminary CPI inflation reading in Poland and the publication of the FOMC minutes in the US.

Economic indicators

Poland

1. Retail sales (y/y) (November): value: 3.1%; forecast: 3.9%; previous: 5.4%

2. M3 money supply (y/y) (November): value: 10.6%; forecast: 10.4%; previous: 10.6%

3. Car registrations (m/m) (November): actual: -7.00%; forecast: none; previous: 5.80%

4. Car registrations (y/y) (November): actual: -0.30%; forecast: none; previous: 9.60%

5. Unemployment rate (November): value: 5.6%; forecast: 5.7%; previous: 5.6%

Germany

1. Car registrations in Germany (m/m) (November): value: 0.2%; forecast: none; previous: 6.2%

2. Car registrations in Germany (y/y) (November): value: 2.5%; forecast: none; previous: 7.8%

3. Import price index in Germany (y/y) (November): value: -1.9%; forecast: none; previous: -1.4%

4. Import price index in Germany (m/m) (November): value: 0.5%; forecast: 0.2%; previous: 0.2%

France

1. Car registrations in France (y/y) (November): value: -0.3%; forecast: none; previous: 2.9%

2. Car registrations in France (m/m) (November): value: -4.7%; forecast: none; previous: -0.6%

United Kingdom

1. GDP (y/y) (Q3): actual: 1.3%; forecast: 1.3%; previous: 1.4%

2. GDP (q/q) (Q3): actual: 0.1%; forecast: 0.1%; previous: 0.2%

3. Current account (Q3): value: -12.1B; forecast: -19.1B; previous: -21.2B

4. Business investment (q/q) (Q3): value: 1.5%; forecast: -0.3%; previous: -1.7%

5. Business investment (y/y) (Q3): value: 2.7%; forecast: 0.7%; previous: 3.2%

6. Car registrations (m/m) (November): value: 4.3%; forecast: none; previous: -53.7%

USA

1. GDP (q/q) (Q3): value: 4.3%; forecast: 3.3%; previous: 3.8%

2. Core personal consumption expenditure (PCE) index (Q3): value: 2.90%; forecast: 2.90%; previous: 2.60%

3. GDP deflator (q/q) (Q3): value: 3.7%; forecast: 2.7%; previous: 2.1%

4. Durable goods orders (m/m) (October): value: -2.2%; forecast: -1.5%; previous: 0.7%

5. Core durable goods orders (m/m) (October): value: 0.2%; forecast: 0.3%; previous: 0.7%

6. Industrial production (y/y) (October): value: 2.20%; forecast: none; previous: 1.90%

7. Conference Board Consumer Confidence Index (December): value: 89.1; forecast: 91.7; previous: 92.9

8. Initial jobless claims: value: 214K; forecast: 224K; previous: 224K

9. Real consumer spending (Q3): value: 3.5%; forecast: none; previous: 2.5%

10. Sales in GDP (Q3): value: 4.6%; forecast: none; previous: 7.5%

China

1. PBoC base lending rate (December): actual: 3.50%; forecast: 3.50%; previous: 3.50%

2. PBoC base lending rate: actual: 3.00%; forecast: 3.00%; previous: 3.00%

3. Industrial profit in China, YTD (November): value: 0.1%; forecast: none; previously: 1.9%

Currency market

This week, the euro (EUR) strengthened against the Polish zloty (PLN) by 0.20%. The euro traded in a range of 4.2031 – 4.2322.  

Meanwhile, the US dollar (USD) weakened against the Polish zloty (PLN) by 0.33%. The dollar traded in a range of 3.5697 – 3.5926.  

Oil and gold market

The price of BRENT crude oil rose by 0.61%. The price fluctuated between USD 60.59 and USD 62.72 per barrel.  

Gold, on the other hand, rose by 4.44%. The price of gold fluctuated between USD 4,369.75 and USD 4,581.80 per ounce.  

Stock exchange

The WIG index rose by 0.52%. The price of the WIG index fluctuated between 115,734 and 116,981.  

Cryptocurrencies

The price of Bitcoin (BTC) rose by 0.18% and fluctuated between PLN 313,698 and PLN 325,000.   

Important events of the past week

Decline in retail sales in Poland: In November, retail sales rose by 3.1% y/y, which is below the market consensus (3.9%) and weaker than in October. The 3.3% m/m decline, despite the growing M3 money supply, suggests pre-Christmas caution among consumers, which translated into a weakening of the zloty and an increase in the EUR/PLN exchange rate to around 4.22. However, analysts point out that after seasonal adjustment, the data remain relatively stable, and the lower growth rate is partly due to an unfavourable calendar effect.

Chinese tariffs on the EU: In response to EU tariffs on electric vehicles, China introduced retaliatory tariffs ranging from 22% to over 42% on dairy products from the EU on 23 December. Although the Polish industry directs 73% of its exports to the EU market, this decision has a negative impact on market sentiment and represents another stage in the trade war. The new regulations, covering milk and cheese, among other things, increase pressure on European producers, although the direct losses of Polish companies should remain limited.

Silver price increases: Silver prices are rising rapidly in response to China's new policy, which effectively suspends exports of this raw material from January 2026. Beijing's recognition of silver as a strategic resource threatens a global supply shock, especially given China's dominance in the metal refining process. This situation is favourable for the valuation of KGHM shares, which, as one of the leading producers, may benefit from investors' shift away from ‘paper’ assets in favour of physical commodities.

Changes in the Monetary Policy Council: Polish President Karol Nawrocki has appointed Marcin Zarzecki to the Monetary Policy Council. This decision coincides with the restoration of supervision over key departments of the bank to members of the NBP management board. The appointment is being closely analysed by the market in the context of the future balance of power in the MPC and its impact on the interest rate path. The new Council member begins his term at a time when macroeconomic forecasts place Poland as the economic leader of the region.

Events worth watching this week

Outlook for the zloty: The key event for the zloty will be Wednesday's (31 December) publication of the preliminary CPI inflation reading for December by the Central Statistical Office (GUS). These data will allow us to assess whether price pressure in Poland is still slowing down. After the New Year break, on Friday, 2 January, investors' attention will shift to the PMI index for Polish industry. This reading will verify whether last week's weaker retail sales data is reflected in a deterioration in manufacturing sector sentiment.

Outlook for the euro: The week for the single currency will begin on Monday (29 December) with an analysis of data from the French labour market (number of unemployed). In the second half of the week, on Friday, 2 January, the euro will react to a package of monetary data, including M3 money supply and final PMI readings for German and eurozone industry. Concerns about the condition of the German automotive sector in the face of escalating trade tensions with China remain an additional factor of pressure.

Outlook for the dollar: Investors' attention will focus on the publication of the minutes of the last FOMC meeting, scheduled for Tuesday (30 December), which will allow for a more accurate assessment of the likelihood of further interest rate moves. On the same day, the market will assess consumer sentiment through the Case-Shiller house price index, and on Wednesday (31 December) we will see weekly data on jobless claims. The week will close with Friday's PMI reading for US industry, which will be key for assessing the risk of recession.

Outlook for the pound: Due to the lack of significant publications in the first half of the week, the key impulses for the pound will not come until Friday (2 January). The market will then learn the Nationwide house price index and the PMI reading for the British industrial sector, which will illustrate the state of the economy after the recent decisions by the Bank of England. Until then, the British currency is likely to follow global sentiment and movements against the dollar.

TREASURY DEPARTMENT

AFORTI.BIZ