Yesterday we learned about the core inflation indicator. How is this core inflation different from normal consumer inflation? This parameter is calculated without taking into account energy and food prices, that is, two components that are currently growing exceptionally fast in social perception.
Inflation calculated in this way is not 5.9 percent, but “only” 4.2 percent. The problem is that expectations were 0.1 percent lower. As a result, if we see another exceedance of expectations, we can expect that the next inflation reading will also be yesterday’s data did not translate into more pressure on the rate hike and, as a result, the zloty weakened by about 0.02 PLN against the euro, but today most of this movement has been corrected In the morning.
Both industrial production and energy use in the US disappointed analysts’ expectations. The differences were not marginal at all, as evidenced by the decline in industrial production by 1.3% versus the expected increase of 0.2%. As a result, investors once again concluded that the dollar was too strong and started selling. It is the flight of capital from the USA and back to our side of the ocean, which is why the appreciation of the morning zloty is catching up.
Today we have an important session of the European Parliament. No one expects that after the recent decision of the Constitutional Court, it will be easy to communicate with EU officials. The vote has been postponed until Thursday, but today’s debate appears to be more important. Hardly anyone would expect the EU to come up with the idea that it’s a good idea for countries to want to turn the whole process upside down and have the primacy of national law over EU law. So Thursday’s surprise is questionable. Today, however, there may be strong words or statements that may realistically change the current balance in the currency market in the case of zloty pairs.
Maciej Przygórzewski – Senior Analyst at InternetowyKantor.pl
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