Market Summary by AFORTI: Renewed tensions in the Middle East, the blockade of the Druzhba pipeline, and an assassination attempt on the US President

Last week, the markets were dominated by the escalation of tensions in the Middle East, the announcement of a blockade of the Druzhba pipeline, and yet another assassination attempt on Donald Trump. Sentiment was shaped by strong risk aversion, which triggered a sharp rise in Brent crude prices alongside a fall in gold prices and the WIG index. The zloty weakened against the euro and the dollar. In the coming week, investors’ attention will focus on the decisions of the FOMC, the ECB and the Bank of England on 29 and 30 April, as well as the Polish CPI inflation reading.

Economic indicators

Poland

1. Employment growth (y/y) (March): actual -0.9%; forecast -0.8%; previous -0.8%;
2. PPI (y/y) (March): actual -0.8%; forecast -0.1%; previous -2.0%;
3. Industrial production (y/y) (March): actual 9.4%; forecast 4.2%; previous 1.3%;
4. Corporate sector wages (y/y) (March): actual 8.6%; forecast 8.3%; previous 8.1%;
5. Retail sales (y/y) (March): actual 9.8%; forecast not available; previous 4.3%;
6. M3 money supply (y/y) (March): actual 11.5%; forecast not available; previous 10.6%;
7. Unemployment rate (March): actual 8.1%; forecast 8.1%; previous 8.1%;

Eurozone

1. Consumer confidence index (April) P: actual -20.6; forecast -18.0; previous -18.4;
2. Services PMI (April) Actual: 47.4; forecast: 49.8; previous: 50.2;
3. Manufacturing PMI (April) Actual: 52.2; forecast: 50.9; previous: 51.8;
4. S&P Global Composite PMI (April): actual 48.8; forecast 50.2; previous 50.7;
5. Construction output (m/m) (February): actual -1.90%; no forecast; previous -1.33%;

Germany

1. PPI in Germany (m/m) (March): actual 2.5%; forecast 1.4%; previous -0.5%;
2. ZEW Index (April): actual -20.4; forecast -12.7; previous -8.5;
3. ZEW Economic Sentiment in Germany (April): actual -17.2; forecast -5.9; previous -0.5;
4. ZEW Current Economic Conditions Index in Germany (April): actual -73.7; forecast -70.0; previous -82.9;
5. PMI for manufacturing in Germany (April): actual 51.2; forecast 51.4; previous 52.2;
6. PMI for services in Germany (April): actual 48.9; forecast 50.4; previous 50.9;

France

1. France Manufacturing PMI (April) Actual: 52.8; forecast: 49.5; previous: 50.0;
2. France Services PMI (April) Actual: 46.5; forecast: 48.5; previous: 48.8;
3. S&P Global Composite PMI in France (April): actual 47.6; forecast 48.6; previous 48.8;
4. Business climate in France (April): actual 100; forecast 99; previous 99;
5. Consumer confidence index in France (April): actual 84; forecast 88; previous 89;

United Kingdom

1. Average earnings, including bonuses (February): actual 3.8%; forecast 3.6%; previous 4.1%;
2. Unemployment rate (February): actual 4.9%; forecast 5.2%; previous 5.2%;
3. Claims for unemployment benefits (March): actual 26.8K; forecast 22.6K; previous 17.1K;
4. CPI (y/y) (March): actual 3.3%; forecast 3.3%; previous 3.0%;
5. Producer Price Index (PPI Input) (m/m) (March): actual 4.4%; forecast 2.9%; previous 0.9%;
6. CPI (m/m) (March): actual 0.7%; forecast 0.6%; previous 0.4%;

USA

1. Retail sales (m/m) (March): actual 1.7%; forecast 1.4%; previous 0.7%;
2. Core retail sales (m/m) (March): actual 1.9%; forecast 1.4%; previous 0.7%;
3. Pending home sales index (m/m) (March): actual 1.5%; forecast 0.0%; previous 2.5%;
4. Crude oil inventories: actual 1.925M; forecast -1.900M; previous -0.913M;
5. Initial jobless claims: actual 214K; forecast 211K; previous 208K;
6. Claims for unemployment benefits: actual 1,821K; forecast 1,820K; previous 1,809K;
7. Services PMI (April) P: actual 51.3; forecast 50.5; previous 49.8;
8. Manufacturing PMI (April): actual 54.0; forecast 52.5; previous 52.3;
9. University of Michigan 5-year inflation expectations (April): actual 3.5%; forecast 3.4%; previous 3.2%;
10. University of Michigan Consumer Sentiment Index, final (April): actual 48.1; forecast 48.1; previous 51.7;

China

1. PBoC benchmark lending rate (April): actual 3.50%; forecast 3.50%; previous 3.50%;
2. PBoC benchmark lending rate: actual 3.00%; forecast 3.00%; previous 3.00%;
3. Foreign direct investment (March): actual -7.30%; no forecast; previous -5.70%;

Currency market

This week, the euro (EUR) strengthened against the zloty (PLN) by 0.30%. The euro traded in the range of 4.2208 – 4.2531. 

Similarly, the dollar (USD) strengthened against the zloty (PLN) by 0.43%. The dollar’s price fluctuated between 3.5878 and 3.6402.  

Oil and gold markets

The price of Brent crude rose by as much as 15.65%. The price fluctuated between 93.07 and 107.44 USD per barrel.  

Gold, however, fell by 2.59%. The price of gold fluctuated between 4,677.36 and 4,852.46 USD per ounce.  

Stock Exchange

The WIG index fell by 3.36%, reaching new record highs. The WIG index fluctuated between 129,952 and 134,363. 

Key events from the past week

Tensions in the Middle East: Despite the formal extension of the ceasefire with Iran, the geopolitical situation in the region has deteriorated sharply. The cancellation of planned peace talks and repeated incidents in the Persian Gulf have prompted a strong reaction from the US, including threats of military action and the seizure of Iranian tankers. The return of market risk aversion has led to a sharp rise in Brent crude oil prices to around USD 105 per barrel and an increase in yields on Polish 10-year bonds to 5.65%. Investors are anxiously forecasting long-term economic consequences and a further rise in inflationary pressure.

Controversy over US tariffs: The US Supreme Court has ruled that the tariffs imposed by Donald Trump’s administration are illegal, obliging the government to refund $166 billion to importers. The refund process is to be carried out out of court via a dedicated government portal. However, the case has become the spark for a political scandal. It has been revealed that a fund managed by the sons of the Secretary of Commerce, Howard Lutnick, was buying up customs claims en masse from companies facing liquidity problems for a fraction of their value. As a result, this entity will generate a profit of around 300% from state funds, whilst American consumers will not recover the costs they incurred.

Blockade of the Druzhba pipeline: The Russian Federation has officially announced that it will suspend supplies of crude oil to the German refinery in Schwedt from 1 May. This facility, controlled by Russia’s Rosneft, is of crucial importance for fuel supplies to Berlin and the western regions of Poland. Although the cut-off of supplies poses the risk of an energy crisis for our neighbours, it also presents a strategic opportunity for the Polish oil sector. Companies such as Orlen and Unimot could take on the role of main suppliers via Naftoport in Gdańsk, which paves the way for the buyout of Russian shares and the elimination of the Kremlin’s influence.

Third assassination attempt on the US president: During the annual Correspondents’ Association dinner at the Washington Hilton, an armed attack was carried out targeting Donald Trump and members of his administration. The 31-year-old attacker managed to breach two security checkpoints, injuring a Secret Service agent who survived thanks to his protective gear. The President and the First Lady were immediately evacuated, and the perpetrator – acting as a so-called ‘lone wolf’ – was apprehended by federal authorities. This is now the third assassination attempt on Donald Trump since 2024, deepening concerns about internal stability and the security of the country’s most important figures.

Events worth watching this week

Outlook for the zloty: The zloty remains heavily influenced by global risk aversion, triggered by the escalation of tensions in the Middle East. The key macroeconomic driver for the domestic currency will be the preliminary CPI inflation reading, scheduled for Thursday, 30 April. It should be noted that on Friday, 1 May, the Polish financial market will be closed, which will significantly limit trading liquidity.

Outlook for the euro: The euro’s volatility in the coming days will be determined by the European Central Bank’s interest rate decision and press conference (Thursday, 30 April). On the same day, key GDP growth estimates and CPI inflation figures for the Eurozone will be published. On Friday, 1 May, the main European stock exchanges, including those in Germany and France, will remain closed.

Outlook for the dollar: The US dollar continues to strengthen its position as a safe-haven asset in the face of geopolitical instability. Investors’ attention will be dominated by the FOMC’s interest rate decision and the press conference scheduled for Wednesday, 29 April. Other key data will include the first-quarter GDP reading (30 April) and the ISM manufacturing index, due on Friday, 1 May.

Outlook for the pound: For the pound, the Bank of England’s interest rate decision on Thursday, 30 April, will be the absolute priority event of the week. On that day, markets will also analyse the MPC meeting minutes and the inflation letter. The week will conclude with the release of the manufacturing PMI and mortgage application data, scheduled for Friday, 1 May.

TREASURY DEPARTMENT

AFORTI.BIZ