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Inflation in Poland 2.8%

ECONOMYInflation in Poland 2.8%

On Friday, we had a big surprise when it came to the level of price increases. We have an unexpected slower growth. In Europe, on the other hand, data is in line with expectations. No surprises in the USA.

Inflation Surprise

On Friday, we received the final data on inflation in Poland. The customary final reading is just a reassurance that the initial one was precise. The final readings are usually the same, sometimes they change by 0.1% due to rounding. It’s rare, however, that there’s a significant difference. That was the case with Polish inflation. The preliminary data indicated 3.2% inflation, which, looking at recent years, is definitely a very good result. But the final reading was 2.8%, almost half a percentage point less. As a result, we are almost in the middle of the inflation target. We are likely to face an upward rebound later this year, as we will get rid of the zero VAT on food. It should be remembered that food accounts for a little more than 1/4 of the inflation basket. As a result, if prices rise proportionally, we are facing a rise of about 1.3 percentage points. How did these data affect the markets? Lower inflation means faster interest rate cuts. Thus, it is not surprising that the euro exchange rate against the zloty was rising on Friday, returning after a 3-day absence above the level of 4.30 PLN.

Inflation in Europe

Friday was not only the day of the inflation reading in Poland. However, only we had such a surprise. The rest of the readings were not positive for the wallets of the citizens of these countries. France was supposed to show 2.9%, it showed 3%. Slovakia was supposed to show 3.3%, showed 3.4%. Italy, on the other hand, showed a change of 0.8% as expected. These data should be treated as in line with general expectations and should not influence expectations regarding interest rates. This explains the lack of clear movements in the EURUSD rate at the time of their publication.

Data from the USA

Data from across the ocean also did not shake the markets. It started with a very weak result of the NY Empire State Index, which showed a result clearly weaker than expected. The industrial production, on the other hand, performed symbolically better than expected, unexpectedly growing by 0.1%. To this was added the University of Michigan report, which almost exactly met expectations. As a result, the markets treated this package as neutral and we had a calm finish.

Today in the macroeconomic data calendar we should pay attention to:

13:30 – Canada – producer inflation,
14:00 – Poland – base inflation.

Maciej Przygórzewski – Chief Analyst at and

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