Market Report / Oil surges, a hawkish Fed and a weaker zloty

In the latest AFORTI.BIZ Market Report, we summarise the events that affected currency and commodity prices, as well as global investor sentiment, over the past week. Markets focused primarily on the sharp rise in oil prices triggered by the US blockade of the Strait of Hormuz, the Fed Chair’s hawkish stance before the US Congress and the noticeable weakening of the Polish currency despite domestic inflation returning to the NBP target. Find out what this could mean for transport and industrial companies.

Key takeaways

Oil rises sharply - The US blockade of the Strait of Hormuz pushed Brent crude prices up by 15% over the week.

The zloty continues to weaken - The decline in Polish inflation to 2.5% did not prevent the zloty from weakening against the dollar and the euro.

The dollar recovers its losses - Lower US inflation weakened the currency, but the Fed’s hawkish stance helped it regain strength.

Technology sell-off - Profit-taking in AI stocks pulled US and Asian stock market indices sharply lower.

Economic indicators

Poland

Core CPI (YoY) (June): actual 3.0%; forecast 3.0%; previous 3.1%;
CPI (YoY) (June): actual 2.5%; forecast 2.5%; previous 3.1%;
CPI (MoM) (June): actual -0.5%; forecast -0.5%; previous -0.3%;

Eurozone

CPI (YoY) (June): actual 2.8%; forecast 2.8%; previous 3.2%;
Core CPI (YoY) (June): actual 2.4%; forecast 2.4%; previous 2.6%;
Current account (May): actual 25.1B; forecast 18.1B; previous 15.7B;
HICP excluding energy and food (YoY) (June): actual 2.1%; forecast 2.2%; previous 2.2%;
Industrial production (YoY) (May): actual -1.2%; forecast -0.5%; previous 0.4%;

Germany

German current account, not seasonally adjusted (May): actual 10.4B; no forecast; previous 16.6B;
German Wholesale Price Index (WPI) (MoM) (June): actual -0.7%; forecast 0.5%; previous -0.6%;
German Wholesale Price Index (WPI) (YoY) (June): actual 4.9%; no forecast; previous 5.9%;

United Kingdom

GDP (MoM) (May): actual 0.1%; forecast 0.0%; previous -0.1%;
GDP (QoQ) (May): actual 0.7%; forecast 0.5%; previous 0.8%;
GDP (YoY) (May): actual 1.3%; forecast 1.4%; previous 1.1%;
Trade balance (May): actual -18.66B; forecast -23.10B; previous -24.58B;
BRC retail sales index (YoY) (June): actual 1.7%; forecast 2.6%; previous 3.4%;

USA

CPI (YoY) (June): actual 3.5%; forecast 3.8%; previous 4.2%;
Core CPI (YoY) (June): actual 2.6%; forecast 2.8%; previous 2.9%;
Retail sales (MoM) (June): actual 0.2%; forecast 0.2%; previous 1.0%;
Initial jobless claims: actual 208K; forecast 216K; previous 216K;
Philadelphia Fed Manufacturing Index (July): actual 41.4%; forecast 12.7%; previous 10.3%;

China

GDP (YoY) (Q2): actual 4.3%; forecast 4.5%; previous 5.0%;
China’s cumulative GDP (YoY) (Q2): actual 4.7%; forecast 4.5%; previous 5.0%;
Industrial production (YoY) (June): actual 5.3%; forecast 4.7%; previous 4.5%;
Unemployment rate in China (June): actual 5.0%; forecast 5.1%; previous 5.1%;
Trade balance (USD) (June): actual 125.62B; forecast 119.50B; previous 105.43B;

Currency market

Over the week, the euro (EUR) strengthened against the Polish zloty (PLN) by 0.17%. The euro traded within a range of 4.3188–4.3491.

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(source: www.money.pl)

Meanwhile, the dollar (USD) weakened against the Polish zloty (PLN) by 0.11%. The dollar traded within a range of 3.7619–3.8127.

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(source: www.money.pl)

Pound sterling (GBP) strengthened against the Polish zloty (PLN) by 0.35%. The pound traded within a range of 5.0620–5.1145.

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(source: www.money.pl)

Commodities market

The price of BRENT crude oil rose by 15.84% following escalations in the Middle East. The price traded within a range of USD 77.28–88.22 per barrel.

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(source: www.money.pl)

Meanwhile, gold fell by 2.58%. The price of gold traded within a range of USD 3,969.20–4,106.32 per ounce.

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(source: www.money.pl)

Equity market

The WIG index fell by 0.23%. The index traded within a range of 140,995–144,466.

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(source: www.money.pl)

What does this mean for businesses?

Importers: The weakening of the zloty increases procurement costs, requiring urgent currency hedging.
Exporters: A weak zloty and a strong dollar significantly increase profitability and encourage currency conversion.
Transport companies: The rise in oil prices to USD 85 forces carriers to urgently review their pricing.
Industry: Falling inflation signals cheaper credit, but expensive energy and weak demand are holding back production.

What affected the markets?

Further escalation of the conflict in the Middle East

The fragile agreement broke down, and the US bombed targets in Iran. Tensions rose dramatically when Donald Trump declared himself the “guardian” of the Strait of Hormuz and demanded a 20% fee from passing vessels. This resulted in a 15% surge in Brent crude prices to USD 84–85 per barrel. The energy shock renewed concerns about global inflationary pressure, strengthening the dollar and weighing on stock markets and the currencies of commodity-importing countries.

Hawkish testimony from the Fed Chair

During his appearances before Congress, the new Fed Chair, Kevin Warsh, presented a firmly hawkish stance. Despite lower inflation readings in the US, he stressed that the fight against price pressures was not over and did not signal imminent interest rate cuts. He also announced a review of the central bank’s balance sheet structure. This firm message cooled market optimism, provided investors with no new forward guidance and reiterated the Fed’s commitment to its 2% inflation target.

Inflation in the US

Consumer price inflation (CPI) and producer price inflation (PPI) readings in the United States came in below market forecasts. This temporarily calmed sentiment, leading to lower bond yields and a weaker dollar. In response to the data, the market sharply reduced the priced-in probability of a July Fed rate hike – from around 42% to just 17%. However, the optimism proved fragile due to the sharp rise in oil prices.

Falling inflation and a weaker zloty

Poland’s June CPI inflation rate declined to the NBP’s point target of 2.5% YoY, while core inflation fell to 3.0% YoY. Although the positive data supported market expectations of interest rate cuts, the Polish currency weakened noticeably under pressure from a stronger dollar. EUR/PLN rose by almost 0.2%, while the yield on Polish 10-year government bonds climbed to 5.55% in response to global concerns about inflation driven by higher oil prices.

What to watch this week

Polish zloty (PLN)

The zloty will react to industrial production data on Monday, 20 July. Wednesday, 22 July, will also be important, with retail sales data due to be released, followed by the unemployment rate on Thursday, 23 July.

Euro (EUR)

The euro will be strongly influenced by the ECB’s interest rate decision on Thursday, 23 July. A day later, on Friday, 24 July, markets will react to the key preliminary PMI readings.

US dollar (USD)

The US dollar will react to the publication of initial jobless claims on Thursday, 23 July. The manufacturing and services PMI readings scheduled for Friday, 24 July, may also generate significant volatility.

Pound sterling (GBP)

Sterling will be influenced by key UK CPI inflation data due on Wednesday, 22 July. Retail sales figures scheduled for Friday, 24 July, will also be important for the currency.

Treasury Department | AFORTI.BIZ

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Data as of: 20 July 2026