Yesterday’s trading session on Wall Street was dominated by sellers. Indices edged away slightly from their peaks, largely reflecting concerns about the results from retailer Wal-Mart. European markets also struggled, a result of newly voiced threats of tariffs from the United States towards the Old Continent. As for the US dollar so far, it lacks strength to continue strengthening, and the corrective depreciation tread is continuing.
Today attention will be focused on PMI index results. From the morning data, a slight improvement in German industry and a significant weakening of the French service sector can be seen. The latter were also worse for the entire euro zone. The common currency reacted with a weakening, but the movement in the EURUSD pair is moderate, the quotations are still in close relation to the 1.05 level. In the afternoon, the United States will present similar numbers. Also under evaluation will be the revision of the University of Michigan index, which will indicate the shaping of consumer conditions. Final inflation expectations results will also be significant.
On Thursday, trade relations talks with Europe, mainly with the European Union, were held in the United States. EU Trade Commissioner Szefczovicz represented one of the sides, while H. Lutnick represented the US. The conclusion of this first round contained hope that both economies will be able to avoid mutual tariff imposition. Proposals were made to lower tariffs (cars, industrial goods) and at the same time to balance the trade balance.
From the Polish economy, we received a package of data. It shows that industrial production fell by 1 percent. The poor result is due to seasonal and calendar factors. On the other hand, construction and assembly production grew by 4.3 percent year on year, which contrasts strongly with the weak December result (-8 percent year on year). The good result certainly improved the so-called base effect. However, the growth of wages in Poland (9.2 percent) is slowing down. There is also a low probability that the dynamics will reach double figures again in the coming months. However, wages will continue to grow faster than consumer prices. Meanwhile, producer inflation indicated a deflationary process (PPI – 0.9 percent year on year). The price drop turned out to be higher than expected by the market.
Łukasz Zembik, Oanda TMS Brokers
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Source: https://ceo.com.pl/kurs-dolara-traci-impet-spadki-na-wall-street-35533
