Even if the daily world calendar is a whole series of indicators, they are of the second order and cannot be expected to have a significant impact on the financial markets. This also applies to domestic unemployment. However, traders with Polish zloty and local rates will have to wait for the result of one Polish central bank. The Thorn consensus points to a rate dream of 25bb, the analyst said, adding that rates will not go down.
The Polish Central Bank should not cut rates today
The regional event of the day is the meeting of the Polish Central Bank on monetary policy. According to the market consensus, the NBP should agree with another annual rate cut, namely by 25 bp. Our colleagues from SG also expect that. According to them, however, this will be the last dream for a long time, given the strong economic fundamentals and the still external core of the inflation component. The annual interest rate will decrease approximately by the year 2024. If it becomes full, from the point of view of the exchange rate of the Polish zloty, it should be a positive start. From home, let’s assume the public unemployment rate for yen. In accordance with the current consensus, we expect it to remain at 3.6%. Thus, there is no significant economic stagnation on the labor market.
We cannot expect more impetus for the financial markets from the world economic calendar today. Finland’s weak German inflation will probably be confirmed in its published estimates. According to us, the growth of retail sales for the euro area as a whole confirmed the weakness of consumer demand and the caution of households in their consumption spending. After the public relatively dovish comments of the American central banks, the speech of Fed Governor J. Powell will be interesting for the markets.
The koruna is under selling pressure, especially against the dollar
The American dollar strengthened practically throughout the entire public Asian and European session, as well as the European one. Of course, the euro was not benefited by the early German industrial production data for z. It disappointed sharply and recorded its fourth month-on-month decline in ad. Life’s decline was mainly driven by production in the automotive, electrical and pharmaceutical industries. The data thus indicate that after the decline in the economy by 0.1% q/q for this quarter, the quarter may also end with a negative sign, and Germany may thus enter a recession. The dollar then received support from a positive comment from the Minneapolis Fed’s N. Kashari.
The strong dollar on the global market also contributed to the weakness of the koruna. The five-euro rate slowly weakened towards 24.65 CZK/EUR. In the morning, the pitom quotation was about 10 hals lower. In contrast, the koruna weakened against the dollar, where the exchange rate moved from a range of 22.95 CZK/USD to 23.10 CZK/USD. From home, we managed to sell a small amount of life’s retail needs in accordance with our expectations. They confirmed the persistent weakness of domestic demand. We commented on the data in more detail here https://bit.ly/3FKd9rr.