The domestic economy shifts into second gear, with reasons for concern. Nvidia performs better than expected, but for heated investors it’s still not enough. EUR/USD tests support at 1.11, at 2 PM inflation data from Germany.
European Championship
Today’s GDP data for the second quarter from the domestic economy turned out splendidly. An increase from 2% to 3.2% YoY is truly impressive and places Poland in the top four of our continent. During this period, Cyprus, Croatia, and Denmark showed even better dynamics. However, as always, the devil is in the details and looking deeper into the reading, we can feel unease. Our economic growth is largely based on consumption (which may be surprising given the high interest rates), which has risen to 4.7% YoY and is a definitive driving force. Investments and even the balance of trade surplus, where export is not a distinguishing feature, fall short. So is economic growth at such high levels threatened in the coming months? One could say both yes and no, on the one hand, we have a real wage growth (dynamics of wages vs inflation), on the other hand, the troubles of our biggest trading partner will reflect in a decrease in orders on our side, looking at a further decrease in export. The data had no influence on the zloty, as the quotes are dictated by what is happening on EUR/USD.
Still not enough
The situation related to Nvidia’s results can testify to how sometimes market expectations are inflated. Despite the results being fantastic and exceeding official expectations, the company lost value upon publication. This can only suggest that more, something spectacular, was desired and hence the disappointment. Recent growth on Wall Street is hence called into question, as after all they were based on the trend of using artificial intelligence, and Nvidia can be said to provide the equipment for it. So yesterday we saw profit-taking on the quotes of the world’s second-largest company by market capitalization and it’s not certain that we won’t return to growth today. After all, once investors coldly recalculate, they will find that the company is doing great, it has a huge amount of cash, and the world has long opted for a direction where Nvidia will be leading.
Inflation data from Germany
On the main currency pair of the world, we have a continuation of the downward trend and a test of support at 1.11. However, this time it seems not to be a matter of a stronger USD, but the weakness of the common currency. This is the result of setting up for inflation data from Germany. Official publications at 2 PM, but results from individual states are already flowing in and it must be admitted that they are lower than expectations, causing investors to envision a scenario of ECB cutting rates at the meeting on September 11, and thus the euro has an uphill battle. Today at 2:30 PM we also have US GDP data, but as it’s a revision, we can’t expect much volatility. It seems that tomorrow’s PCE inflation reading from the US will be more significant. The domestic currency is somewhat on the defense, however, at this moment EUR/PLN remains below the important resistance at 4.30.
Author: Krzysztof Pawlak, currency analyst at Walutomat.pl
Source: https://managerplus.pl/polska-gospodarka-przyspiesza-ale-wyzwan-nie-brakuje-nvidia-nie-spelnia-wygorowanych-oczekiwan-inwestorow-37333
