Slightly stronger zloty (Afternoon analysis 17.09.2018)

Some harsh words about the British economy were made by the IMF. Eurostat data without much impact on the single currency. The zloty gains slightly during the first minutes of US trade.

The financial media are still dominated by the discussion about foreign trade, but, as in the morning, no official reports have come to the market. It is also difficult to say whether the issue of new customs restrictions is a matter of the next few hours or days.

It is also worth noting that in the afternoon, the dollar depreciates despite an increase in the yield on 10-year US Treasury bonds, which usually helps the dollar. Investors may expect that customs issues will either not be introduced or recent reports are not as negative as previously expected. However, this general wishful thinking can be quickly reversed.

Apart from global issues, it is also worth noting the reports concerning the United Kingdom. In its annual review of the economic situation, the IMF pointed out that not all options related to the UK leaving the EU are expensive, especially if the break-up occurred in a disorganised manner.

The IMF also stressed that the productivity of British workers is low (about 25% lower than American, French or German workers). To illustrate, according to the IMF, it looks like that a German worker will produce by Thursday afternoon as much as a British worker will produce for a whole week. In the long term, of course, this has an impact on the standard of living in the Islands.

Zloty marginally stronger

In addition to trade and Brexit issues, it is also worth noting the final inflation data for August published by Eurostat and the information on vacancies at the end of the Q2 in the European Union. Core inflation remained at 1.0% year-on-year (as in the preliminary reading). This suggests that there is still very limited pressure on price increases.

On the other hand, the percentage of vacancies in the EU remained unchanged compared to the Q1 (2.2%), but in the Czech Republic, for example, the percentage of vacancies (the number of vacancies in relation to the total number of employees and vacancies) increased up to 5.4%. In the case of Poland, the increase was from 1.2 to 1.3 %.

In Poland, in the afternoon we could observe a slight strengthening of the zloty. It was mainly a reaction to the weaker dollar on the global market. In the lack of official information on the new foreign trade restrictions, the zloty may still slightly strengthen during the US session.