Market Summary by AFORTI: Interest rate cuts, NBP President's press conference, end of EU industrial recession

2025-09-08

Last week, financial markets were influenced by several key events, including a 25 basis point cut in interest rates in Poland. The conference held by NBP President Adam Glapiński drew attention to the pro-inflationary impact of GDP growth, while emphasising caution regarding further cuts. President Karol Nawrocki made his first foreign visit to the USA, meeting with Donald Trump. This week, the euro and the dollar weakened against the zloty, and oil prices fell. On the other hand, the price of gold, the WIG index and Bitcoin rose. The European Central Bank (ECB) is expected to leave interest rates unchanged at its meeting on 11 September.

Economic indicators

Poland

1. GDP (q/q) (Q2): 0.8%; forecast 0.8%; previously 0.7%

2. GDP (y/y) (Q2): 3.4%; forecast 3.4%; previously 3.2%

3. PMI index for industry (August): 46.60; forecast 47.00; previously 45.90

4. Interest rate decision (September): 4.75%; forecast 4.75%; previously 5.00%

5. Foreign exchange reserves (August): 223.50B; previously 223.52B

Eurozone

3. PMI index for industry in Germany (August): 49.8; forecast 49.9; previously 49.1%

4. PMI index for industry (August): 50.7; forecast 50.5; previously 49.8%

5. Unemployment rate (July): 6.2%; forecast 6.2%; previous 6.3%

6. Core CPI (y/y) P (August): 2.3%; forecast 2.2%; previous 2.3%

Germany

1. PMI index for industry (August): 49.8; forecast 49.9; previously 49.1%

2. Composite PMI index (August): 50.5; forecast 50.9; previously 50.6%

3. PMI index for services (August): 49.3; forecast 50.1; previously 50.6%

4. Auction of 10-year German government bonds (Bund): 2.770%; previously 2.690%

5. Factory orders (m/m) (July): -2.9%; forecast 0.5%; previously -0.2%

6. GDP (y/y) (Q2): 1.5%; forecast 1.4%; previously 1.5%

France

1. Manufacturing PMI (August): 50.4; forecast 49.9; previously 48.2%

2. S&P Global Composite PMI (August): 49.8; forecast 49.8; previously 48.6%

3. PMI index for services (August): 49.8; forecast 49.7; previously 48.5%

United Kingdom

1. Nationwide HPI (year-on-year) (August): 2.1%; previously 2.4%

2. Composite PMI (August): 53.5; forecast 53.0; previously 51.5%

3. PMI index for services (August): 54.2; forecast 53.6; previously 51.8%

4. PMI for the construction sector (August): 45.5; forecast 45.2; previously 44.3%

5. Core retail sales (m/m) (July): 0.5%; forecast 0.4%; previously 0.6%

6. Retail sales (m/m) (July): 0.6%; forecast 0.3%; previously 0.3%

USA

1. PMI manufacturing index (August): 53.0; forecast 53.3; previous 49.8%

2. ISM manufacturing index (August): 48.7; forecast 49.0; previous 48.0%

3. Job openings and labour turnover survey (JOLTS) (July): 7.181 million; forecast 7.380 million; previous 7.357 million

4. ADP non-farm employment change (August): 54K; forecast 73K; previous 106K

5. Initial jobless claims: 237K; forecast 230K; previous 229K

6. S&P Global Composite PMI (August): 54.6; forecast 55.4; previous 55.1%

7. Services PMI (August): 54.5; forecast 55.4; previous 55.7%

8. ISM index for services (August): 52.0; forecast 50.9; previous 50.1%

9. Change in non-farm employment (August): 22K; forecast 75K; previous 79K

10. Unemployment rate (August): 4.3%; forecast 4.3%; previously 4.2%

China

1. Caixin manufacturing PMI (m/m) (August): 50.5; forecast 49.7; previously 49.5%

2. Caixin services PMI (August): 53.0; forecast 52.4; previously 52.6%

Currency market

This week, the euro (EUR) weakened against the Polish zloty (PLN) by 0.33%. The euro price fluctuated between 4.2443 and 4.2675.

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Similarly, after increases, the US dollar (USD) ultimately weakened against the Polish zloty (PLN) by 0.64%. The price of the dollar fluctuated between 3.6125 and 3.6733.

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Oil and gold market

The price of BRENT crude oil fell by 2.77%. The price fluctuated between USD 65.11 and USD 69.49 per barrel.

Gold, on the other hand, rose by 3.51%, reaching new highs. The price of gold fluctuated between USD 3,506.72 and USD 3,653.62 per ounce.

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Stock exchange

The WIG index rose by 0.75%. The WIG index price fluctuated between PLN 102,467 and PLN 107,156.

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Cryptocurrencies

The price of Bitcoin (BTC) rose by 1.00%. The price of Bitcoin fluctuated between PLN 387,900 and PLN 409,489.

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Important events of the past week

Interest rate cut: On Wednesday, the Monetary Policy Council (RPP) cut interest rates by 25 basis points, causing the reference rate to fall to 4.75%. This decision was in line with economists' expectations and led to a decline in yields at the short end of the Polish curve. As a result, the EUR-PLN exchange rate stabilised at around 4.25.

Conference of the President of the National Bank of Poland: During a press conference following the Monetary Policy Council meeting, NBP President Adam Glapiński drew attention to the pro-inflationary impact of accelerated GDP growth in 2025 and strong consumption growth. At the same time, he emphasised that the Council is cautious about further rate cuts, mainly due to uncertainty about energy prices and the government's loose fiscal policy. He also announced a proposal to increase the share of gold in foreign exchange reserves to around 30%.

President Nawrocki in the USA: President Karol Nawrocki made his first foreign visit to Washington, meeting with Donald Trump. Poland's military and energy security, as well as the situation in Ukraine and relations with Russia, were discussed in the context of mistrust towards the Russian leadership. Despite controversy surrounding the absence of representatives from the Ministry of Foreign Affairs in the delegation, the meeting focused on military cooperation and the role of USA in ensuring regional security.

End of industrial recession in the EU: In August, the Eurozone industry emerged from recession, as evidenced by the rise of the PMI index for industry to 50.7 points. This was the first time above the 50 threshold since the beginning of 2022. The increase in activity was supported by an influx of new orders, especially in financial services, and domestic demand. Despite these positive economic signals from the Eurozone, the EUR-USD exchange rate fell slightly to around 1.165, which may have been related to weaker data from the US labour market. The European Central Bank (ECB) is almost certain to leave interest rates unchanged at its meeting on 11 September.

Events worth watching this week

Outlook for the euro: For the euro, the most important events will focus on Thursday, 11 September, when the European Central Bank (ECB) will hold its meeting. Decisions on interest rates and deposit rates are expected, which are forecast to remain at 2.15% and 2.00% respectively. The ECB press conference and speech by ECB President Christine Lagarde will also take place on that day. Data from Germany will also be important, including industrial production on Monday, 8 September, and CPI figures on Friday, 12 September.

Outlook for the dollar: In the coming week, the price of the US dollar may be influenced by key data on inflation, the labour market and the Fed's decisions. On Thursday, 11 September, CPI releases will be key. In addition, investors will be paying attention to weekly data on jobless claims. Another important event will be the publication of the federal budget balance on Thursday. The markets may also be affected by the preliminary inflation forecasts and the University of Michigan consumer sentiment index published on Friday, 12 September.

Outlook for the pound: In the coming week, the British pound may be affected by data on the British economy. On Monday, 8 September, the BRC retail sales index will be published. However, the key publications for the pound will be on Friday, 12 September, when the industrial production index, GDP and trade balance will be announced. GDP is expected to be 0.0% and the trade balance -21.60 billion GBP.

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