Despite the hot and stormy November, we don’t slow down. December is not only about Santa Claus’ rally. He will have to compete for attention with Powell, Trump, Lagarde, or Barnier. Even in this winter month, it can get hot in Georgia, Romania, France, or traditionally in the Middle East.
November storms
The penultimate month of the year is historically a difficult period in the markets. Although there were plenty of emotions this time, at least the capital markets can be satisfied. The exception, of course, is our domestic exchange, but even the WIG-20 performed a result close to zero. The German Dax increased by over 500 points and gave an assumption for the emergence of new ATH, which we observe today. The American broad market increased by almost 6%, also reaching a record of all time. On the currency market, the biggest star was obviously the American dollar, which started the month around 1.09$, to go down 5 cents lower. A strong dollar, unfortunately, is not good news for the zloty and indeed the USDPLN rate occasionally even exceeded 4.20 PLN. However, last week slightly repaired the state of our currency, thanks to which it was possible to descend to around 4.10 PLN. PLN looks decidedly better against the euro, which clearly depreciated in November.
December rallies
Interestingly, the intense November seems to support for the star of December. On the horizon, we have two meetings of the main central banks, where there is still no unanimity among investors about potential steps. While the Americans are not sure yet if there will be any reduction, while Europeans seriously consider a “jumbo cut”, or a double cut. Such a divergence of expectations may favor increased volatility. Add to this the President-elect, who throws tariffs left, right, and center, and a budget impasse in France, which could possibly sink the shaky Barnier government. To further spice up the December mood: a wave of social discontent is rising in Georgia, Romania may soon join it (where fairly difficult elections are being held) and… France again, where residents anxiously look towards budget cuts. In the middle of all this stands lonely Santa Claus, who would like to draw attention to his annual rally, so we may be looking again in the coming time at ATH on the most important stock exchange floors – not on GPW.
Monday already in the mood
The first session of December goes exactly the way the whole month should look. We have a strong dollar, weak euro, and our zloty somewhere in between. The USDPLN rate is rising to 4.085 PLN, while EURPLN is falling to 4.29 PLN. In accordance with the December mood, stock market floors also light up like Christmas trees. In the macroeconomic calendar, theoretically, we have a crowd like in a stable, but most readings are final results of previously announced PMI. The Italians, who apparently decided that they have developed their economy enough and it is now time to rest, deserve a mention. In the third quarter, the GDP dynamics amounted to a round zero. In Australia, they have more reasons to be satisfied as retail sales are growing, as is the real estate market, while inflation is falling. As a result, the Australian Dollar remains strong in the broad market today, though perhaps not as strong as its American counterpart.
Author: Krzysztof Adamczak, currency analyst at Walutomat.pl
Source: https://ceo.com.pl/rajd-swietego-mikolaja-kontra-powell-lagarde-i-globalne-napiecia-43727
