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Afternoon analysis 19.04.2017

19 Apr 2017 15:22|Bartosz Grejner

The eurozone’s consumer inflation for march withheld, which was consistent with the consensus. However, the trade balance surplus for February, appeared to be better than expected. The salaries growth in the Polish company sector for March, was at its highest level since mid-2016.

Eurozone’s data

According to Eurostat, the eurozone’s consumer inflation for March appeared to be consistent with its initial reading two weeks ago. The main inflation index was at the level of 1.5% YOY. However, baseline inflation went down to 0.7% YOY, which was its worst result since April 2016.

The energy prices index increased 7.4% YOY. The fresh food prices increased as well (3.1%). The main inflation index’s growth was mainly caused by an increase in the fuel prices (13.1% YOY), as well as in the heating oil prices (20.8% YOY).

Eurostat also published the data regarding the eurozone’s trade balance for February. This index quoted a 17.8 billion euros surplus, which appeared to be higher than expected. This index’s result from February 2016 was lower because export was increasing at the pace of 5% and import’s growth pace was by one percentage point lower.

The above mentioned data had a limited impact on the main currencies. The EUR/USD was within the range of 1.071-1.074. The GBP/USD has been near 1.283 and the dollar’s index has reached the level of 99.5 points.

Solid data from Poland

Today, the zloty has been in a relatively positive condition. Yesterday the British Prime Minister, Theresa May, called for early elections, which was the main news of the day. This caused the pound’s strengthening, which has been sustained today. The GBP/PLN went to its highest level since the end of February.

At 14.00, the Polish Central Statistical Office (GUS) published the data regarding the average salaries in the company sector for March. This index increased 5.3% YOY, which was its largest growth since June 2016. The employment growth was worse than expected (4.5% YOY vs 4.6% YOY), but it was still near its eight-year maximum. This data is a positive signal for the zloty. However, the Polish currency’s reaction was limited. Tomorrow’s readings regarding the industrial production, retail sales and PPI can be more significant for the zloty.

Tomorrow’s events

At 14.00, the Polish Central Statistical Office (GUS) will publish the data regarding the industrial production, retail sales and PPI for March. This data may appear crucial for the zloty’s evaluation, because it will be helpful is estimating the Polish economic growth for the first quarter.

Over the past few weeks the zloty has been gaining value, mainly due to the positive sentiment towards the emerging market currencies. The dovish attitude from the Monetary Policy Council had a less significant impact on the Polish currency. Therefore, it the above data appears to be negative, this would wear-off the zloty significantly. According to the market consensus, the industrial production will increase 7.2% YOY, retail sales will increase 8.2% YOY and PPI will increase 4.7% YOY.

At 14.30, the American Labor Department will present the weekly jobless claims. Previously, this index was at the level of 234k. Currently, the market consensus is at the level of 242k. This would emphasize a positive condition of the American labor market and the dollar’s value would increase.


19 Apr 2017 15:22|Bartosz Grejner

This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without acknowledgement of the source is prohibited.

See also:

19 Apr 2017 12:24

Daily analysis 19.04.2017

18 Apr 2017 15:24

Afternoon analysis 18.04.2017

18 Apr 2017 12:23

Daily analysis 18.04.2017

14 Apr 2017 15:18

Afternoon analysis 14.04.2017

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