Market Summary by AFORTI: US-Iran ceasefire, renewed blockade of the Strait of Hormuz, interest rates held steady in Poland

Last week, the markets were preoccupied with the fragile ceasefire between the US and Iran, and the renewed blockade of the Strait of Hormuz following Israel’s attacks on Lebanon. Sentiment was also shaped by the crisis of confidence in the Zondacrypto exchange and the Monetary Policy Council’s decision to keep interest rates unchanged in Poland. Gold and the record-high WIG index gained ground, whilst Brent crude and assets on the Zondacrypto exchange suffered heavy losses; the zloty strengthened against the euro and the dollar. In the coming week, investors’ attention will focus on Trump’s announcement regarding the US blockade of the Strait of Hormuz, as well as on CPI and core inflation data (Poland, US, Eurozone), the ECB minutes, the Fed Beige Book and UK GDP figures.

Economic indicators

Poland

1. Thomson Reuters IPSOS PCSI Index (April): reading 46.32; forecast -; previous 49.01;
2. Interest rate decision (April): rate 3.75%; forecast 3.75%; previous 3.75%;
3. Foreign exchange reserves (EUR) (March): actual 253.53B; previous 259.25B;

Eurozone

1. PPI (m/m) (February): actual -0.7%; forecast -0.6%; previous 0.8%;
2. Services PMI (March): actual 50.2; forecast 50.1; previous 51.9;
3. S&P Global Composite PMI (March): actual 50.7; forecast 50.5; previous 51.9;
4. Retail sales (y/y) (February): actual 1.7%; forecast 1.6%; previous 2.1%;
5. Retail sales (m/m) (February): actual -0.2%; forecast -0.2%; previous 0.0%;

Germany

1. CPI (m/m) (March): actual 1.1%; forecast 1.1%; previous 0.2%;
2. CPI (y/y) (March): actual 2.7%; forecast 2.7%; previous 1.9%;
3. German trade balance (February): actual 19.8B; forecast 18.1B; previous 20.3B;
4. German industrial production (m/m) (February): actual -0.3%; forecast 0.6%; previous 0.0%;
5. German exports (m/m) (February): actual 3.6%; forecast 1.0%; previous -1.5%;
6. German services PMI (March): actual 50.9; forecast 51.2; previous 53.5;

France

1. France’s trade balance (February): actual -5.8B; forecast -2.4B; previous -2.0B;
2. Value of exports in France (February): actual 52.0B; previous 53.2B;
3. Import value in France (February): actual 57.8B; previous 55.2B;
4. PMI for services in France (March): actual 48.8; forecast 48.3; previous 49.6;
5. S&P Global Composite PMI in France (March): reading 48.8; forecast 48.3; previous 49.9;
6. Total reserve assets in France (March): reading 390,629.0M; previous 421,573.0M;

United Kingdom

1. Halifax house price index (m/m) (March): actual -0.5%; forecast 0.2%; previous 0.3%;
2. Halifax house price index (y/y) (March): actual 0.8%; forecast 1.5%; previous 1.2%;
3. Services PMI (March): actual 50.5; forecast 51.2; previous 53.9;
4. Composite PMI (March): actual 50.3; forecast 51.0; previous 53.7;
5. Construction PMI (March): actual 45.6; forecast 43.6; previous 44.5;
6. Mortgage rates (GBP) (March): actual 6.60%; previous 6.59%;

USA

1. CPI (m/m) (March): actual 0.9%; forecast 1.0%; previous 0.3%;
2. CPI (y/y) (March): actual 3.3%; forecast 3.4%; previous 2.4%;
3. Core CPI (m/m) (March): actual 0.2%; forecast 0.3%; previous 0.2%;
4. Core CPI (y/y) (March): actual 2.6%; forecast 2.7%; previous 2.5%;
5. Michigan Consumer Sentiment Index (April): actual 47.6; forecast 51.6; previous 53.3;
6. GDP (quarter-on-quarter) (Q4): actual 0.5%; forecast 0.7%; previous 4.4%;
7. Initial jobless claims: actual 219K; forecast 210K; previous 203K;
8. ISM Services Index (March): actual 54.0; forecast 54.8; previous 56.1;
9. ISM Services Price Index (March): actual 70.7; forecast 67.0; previous 63.0;
10. ADP weekly employment change: actual 26,000; previous 15,250;

China

1. CPI (m/m) (March): actual -0.7%; forecast -0.2%; previous 1.0%;
2. CPI (y/y) (March): actual 1.0%; forecast 1.2%; previous 1.3%;
3. PPI (y/y) (March): actual 0.5%; forecast 0.4%; previous -0.9%;
4. Foreign exchange reserves (USD) (March): actual 3.342T; forecast 3.400T; previous 3.428T;

Currency market

This week, the euro (EUR) weakened against the zloty (PLN) by 0.66%. The euro traded in the range of 4.2425 – 4.2795. 

Similarly, the dollar (USD) weakened against the zloty (PLN) by 2.42%. The dollar’s price fluctuated between 3.6147 and 3.7175.  

Oil and gold market

The price of Brent crude fell by as much as 13.40%. The price fluctuated between 90.43 and 111.77 USD per barrel.  

Gold, on the other hand, rose by 1.99%. The price of gold fluctuated between 4,631.05 and 4,873.26 USD per ounce.  

Stock Exchange

The WIG index rose by a further 5.45%, reaching new record highs. The WIG index fluctuated between 124,644 and 131,325. 

Key events from the past week

US-Iran ceasefire: The United States and Iran have agreed on a two-week ceasefire, which has led to the temporary reopening of the Strait of Hormuz. This decision sparked euphoria in the markets, pushing oil prices below the $100 per barrel mark and driving gains in global stock indices. As a result, the Polish zloty strengthened against the dollar, and the bond market saw a sharp fall in bond yields.

Israeli attacks on Iran and the re-closure of the Strait of Hormuz: Israel declared that the current ceasefire did not apply to Lebanese territory, after which it carried out massive air strikes on Hezbollah targets in Beirut. In response, Tehran immediately withdrew from its previous concessions and once again blocked the Strait of Hormuz, a strategic chokepoint for maritime transport. The sharp escalation of the conflict put an end to market optimism, reigniting global concerns about the stability of energy supplies.

US blockade of the Strait of Hormuz: In the wake of the failure of talks in Islamabad, Donald Trump announced a military blockade of the Strait of Hormuz by the US Navy. These actions are aimed at intercepting vessels paying illegal fees to Iran and neutralising the mine threat with the support of NATO forces, including British minesweepers. Tehran has deemed the operation a definitive breach of the truce. At the same time, legal experts are warning of a violation of international maritime law. Such an escalation paralyses a key trade route and drastically increases global geopolitical tension.

Interest rates in Poland: The Monetary Policy Council has decided to leave the base rate at 3.75%. NBP Governor Adam Glapiński announced the continuation of a ‘wait and see’ strategy, citing high market uncertainty and the risk of second-round effects resulting from the oil shock. Such a cautious stance by the central bank significantly delays the prospect of any interest rate cuts in the near future.

The Zondacrypto exchange crisis: The Polish cryptocurrency exchange Zondacrypto is facing a deep crisis of confidence, triggered by prolonged delays in processing withdrawals and the actions of the public prosecutor’s office. Panic among investors has led to an unprecedented market anomaly – the price of Bitcoin on the platform has fallen 20% below the global rate. The situation is exacerbated by the fact that the exchange’s native token has lost as much as 99% of its value relative to its all-time high (ATH).

Events worth watching this week

Outlook for the zloty: In the coming week, the Polish zloty’s valuation will be determined primarily by the latest inflation data. The releases of the CPI (Wednesday, 15 April) and core inflation (Thursday, 16 April) will be of key importance. In addition, investors will be watching Monday’s current account balance reading (13 April), which may set the tone for trading at the start of the week.

Outlook for the euro: Thursday’s inflation estimates for the Eurozone, including the CPI and HICP figures (16 April), will be decisive for the single currency’s exchange rate. On the same day, markets will analyse the minutes of the European Central Bank’s (ECB) latest meeting, looking for clues regarding the future direction of monetary policy. Earlier, on Wednesday 15 April, investor sentiment will be shaped by the report on industrial production in the European Union.

Outlook for the dollar: Volatility in the US dollar may increase in response to a series of significant macroeconomic releases. The calendar opens with Tuesday’s producer price inflation (PPI) data from 14 April. On Wednesday, market attention will focus on the findings of the Fed’s Beige Book, whilst Thursday 16 April will bring key reports on the number of jobless claims and monthly industrial production growth in the US.

Outlook for the pound: The British pound may come under pressure from increased volatility, particularly in the second half of the week. A flurry of key data from the UK economy – including GDP and industrial production figures – is due on Thursday, 16 April. Ahead of that, public speeches by Bank of England Governor Andrew Bailey, scheduled for Tuesday and Wednesday (14–15 April), will have a significant impact on sentiment surrounding the British currency.

TREASURY DEPARTMENT

AFORTI.BIZ