Daily analysis 02.01.2014

We are descending in the areas of 1.3700 on EUR/USD. Day with PMI indexes in Europe – surprisingly good readings form the peripheral countries. Data from USA. Weaker than expected Logistics Managers Index from Poland and approach under 4.1600 on EUR/PLN.

Most important macro data (CET). Estimations for macro data are based on Bloomberg's information, unless marked otherwise.

• Apart from the market consensus, we will publish the expectations division for some macro data. It often happens, that the market reaction is biggest, when macroeconomic reports are beyond the range of extreme predictions.
• 14.30 CET: Unemployment benefits from USA (estimations are: 338 thousands, division between 325 thousands and 350 thousands).
• 16.00 CET: ISM index for industry from USA (estimations are: 57 points; division between 55.4 and 58 points).

PMI and data from USA

Since morning the market is slightly correcting New Year's Eve growths and we are slowly coming to the boarder of 1.3700 on EUR/USD. The reason of European currency's weakening and slight moods' deterioration in new year, is a slight descend of PMI indexes from China – especially the government one, which decreased from the level of 51.3 points to 51.0. On the other hand Logistic Managers Index published by Markit and HSBC, held its initial reading and is 50.5 points. Today's session should still be calm and the main signal for euro-dollar can appear at 16.00 CET, along with the publication of American ISM.

Since morning we also have a spill of PMI industrial publications. Main countries of Euro Zone – Germany and France have not surprised, because we got familiar with initial readings already in December, and eventually indexes overlapped with previous estimations. Much more surprising were the informations from the countries, which usually stay in the back. Spanish Logistic Managers Index came back above the level of 50 points, which divides development from recourse. In the comment on the data, Andrew Harker, Markit's senior economist, claimed that “the return of Spanish industry's growth at the end of 2013 was a positive signal and has significantly cleared the anxieties, that decreases observed in November will herald a new slowdown”. PMI publication from Italy looks even better. According to Markit's and ADACI's data, Italian industry was developing best since 32 months (53.3 points). The report pays attention to the growth of production, new orders and also shows the improvement on labour market. In his resume, Phil Smith, Markit's economist, notices also clear “backlog's accumulation (that is orders, which have not been finalized yet – author's footnote), which should point out the further improvement of industry's situation. As an interesting thing we should also note the Greek PMI approach in the areas of 50.0 points level (49.6). It was the highest reading since 4 years and it is possible that the first since many years production growth can be noted in following months. In general the combine reading of Logistic Manager Index from 8 Euro Zone countries was convergent with initial estimations and reached 52.7 points (31 months height). Apart from Italy and Greece, other countries that have stood out positively, were Germany (54.3), Holland (57.0) and Ireland (53.5). Currently the worse country on this list is France (47.0) and if their situation will not improve, they may again reach recession.

After today's morning weakening of EUR/USD we should have a calm session. Decreases below 1.3700 are possible in case of American ISM readings will appear clearly stronger than the predictions. Base scenario until the end of the week is small changeability and keeping up in boarders of current levels.

PLN weakening. Worse PMI

After few sessions when EUR/PLN was noted below 4.1600, we are timidly coming back above this important level. Much worse PMI readings from the industry are not helping the national currency. Index published by Markit and HSBC decreased below the level of 54.4 points to 53.2. In her comment on the data, Agata Urbańska-Giner, HSBC's economist for Central Eastern Europe market, notices most of all the decrease of production's subindex to the levels from July, last year. On the other hand the employment composition, which noted second best result since May 2007, was a positive stand out. Looking in general at the historical index's rates, 53 points is still a good result, and if we will not descend clearly below 52 points, then the movements in currents divisions should not cause any bigger anxiety.

Today's session on EUR/PLN can be important for the national currency. If we will finish the day above 4.1600 and tomorrow's quotation will not bring zloty's enforcement, then the decrease impulse on EUR/PLN will be denied and the base scenario will be the return fluctuation division of 4.16-4.20.

Expected divisions for zloty pairs determined by EUR/USD rate:

Expected levels of GBP/PLN rate determined by GBP/USD: