The market awaits data from the USA

Upcoming, today’s consumer inflation data in the US is absorbing investors’ attention. This is clearly visible in the absence of major reactions to other significant readings. Both the significantly better GDP from Poland and continuous weaker data from Germany passed almost unnoticed. In the background, the decrease in interest rates in New Zealand weakens the local dollar.

Better data from Poland

Today we’ve learnt about the gross national product growth. On an annual basis, GDP increased by 3.2%. This is a robust result, especially as expectations predicted only 2.8%. Improvement is best visible in quarterly data: GDP has increased by an impressive 1.5% over three months. The currency market has received this relatively calmly. We might notice a strengthening of the złoty against the dollar, but the problem is, it’s not visible in relation to the euro. This is most likely a result of changes in global markets. Last night and this morning, we witnessed a strong weakening of the dollar against the euro. This movement explains the 6-penny depreciation of the dollar since the beginning of the week, while the euro devalued by only 2 pennies during this time.

Germany shows poor data again

If there’s something in recent months’ markets that one can depend on, it’s weaker data from the German economy. Yesterday, we saw the ZEW Institute Index report. Just a month ago, it was at 41.8 points. Markets expected a decrease in July, though they anticipated 31 points and not the actual 19.2 points. Such a poor result shows that pessimism regarding the Oder economy’s condition is still strong. Markets initially reacted by weakening the euro, but after a moment the market reversed and investors clearly began to buy euros for dollars. Observers believe this could be due to anticipation of today’s inflation data. They should confirm what to expect at September’s Federal Open Market Committee meeting. The dollar’s weakening may indicate the popularization of a 0.5% decrease rather than the currently dominating 0.25%. These expectations are confirmed by the lower than expected producer inflation reading across the ocean.

Surprise in New Zealand

Today at 4:00 in the morning, we learnt the decision of the Reserve Bank of New Zealand. There was an unexpected drop from 5.5% to 5.25%. Commentary typically had to be awaited an hour after the decision. It’s worth noting that forecasts for interest rates in New Zealand vary greatly. The central bank forecasts 3.85% at the end of 2025. In contrast, the market suggests only 3%. This expectation for additional cuts is causing the New Zealand dollar to be clearly in retreat since early this morning. The price has dropped from 2.37 zł to 2.34 zł.

Today in the macroeconomic data calendar, it’s worth paying attention to:

14:30 – USA – consumer inflation.

Maciej Przygórzewski – principal analyst at InternetowyKantor.pl