In recent days, markets have been intrigued by Donald Trump’s latest appointments. This includes his decision to name Scott Bessent as the Secretary of Treasury. Locally, the beginning of the week for the zloty will be dominated by macro readings. On Wednesday, focus will shift to the Americans.
Deficit, GDP, oil
We are gaining insights about Donald Trump’s new deal. Over the weekend, it was reported that Scott Bessent, a trusted entity within Soros’ circles, will become the Secretary of the Treasury. Bessent has indicated that he will focus on fulfilling the president’s election promises, although the markets might have a different perspective, seeing him as a hope for softening the incoming reforms. Interestingly, the slogan promoted by the future Secretary, the “3-3-3” strategy, sounds like something investors might latch on to. In short, it signifies cutting the deficit to 3% (down from the current 6%), accelerating the pace of GDP dynamics to 3%, and increasing oil production by three million barrels per day. The last point aims at bringing the oil price closer to $40, which Trump mentioned during his campaign. This would contribute to a decrease in inflation and open the way for further interest rate cuts.
Strong ten!
Locally at the beginning of the week, we have a lot of readings from the domestic economy. Industrial production has gained momentum, growing by 10% last month, which translates into a result of 4.7% year-on-year. This is particularly crucial as the previous reading induced significant disappointment and concerns about Polish industry. Interesting readings are also available with regard to payment. We did record a slight decline, but it was far less than analysts had anticipated. Salaries in establishments employing at least ten people increased by 10.2% over the past year. There continues to be wage pressure, particularly in light of significantly lower inflation. Workers are still attempting to make up for losses incurred due to previously escalating price dynamics. As expected, employment in the described sector fell by 0.5%. Our attention is also directed towards tomorrow’s retail trade results. The last reading had brought concerns about the condition of the Polish consumer, which is why it is essential for tomorrow’s result not to confirm the onset of a negative trend. Analysts believe in an optimistic scenario where the September result was just a mishap.
Condensed week
Due to Thanksgiving, the upcoming week will be focused in the first part. From Thursday, when the Americans are off, one can traditionally expect a calming of moods on the global markets and a polite wait for the next week. However, before that happens, we will receive a few interesting readings from the world’s leading economy. In particular, we’ll learn about the minutes from the last FOMC meeting, which could shed more light on the prevailing post-election mood. On Wednesday, we will learn about the crucial market report on Americans’ spending. Investors expect a slight increase in PCE inflation but anticipate it will remain below the significant 3% level.
The zloty starts the week by making up for last week’s losses, particularly against the dollar, which has weakly competed today. The USDPLN rate was attacking PLN 4.20 last Friday but today is already 10 groszy lower. The euro is also depreciating, returning to the recently well-known level of 4.32 PLN. The Swiss franc is also going down, without a trace of the 4.70 PLN it was recently, and is currently priced seven groszy lower.
Author: Krzysztof Adamczak, currency analyst at Walutomat.pl
Source: https://managerplus.pl/zloty-zyskuje-wobec-dolara-i-euro-poczatek-tygodnia-na-korzysc-polskiej-waluty-31988
