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2019/09/02 / Erste Group Research

Poland: Weekly Focus

PMI for August brought some optimism, coming in at 48.8 and surprising to upside. No important local macroeconomic release scheduled this week. Political conflict in UK and escalation of trade wars should capture attention of markets.

Although the better than expected PMI for August does not remove all concerns regarding economic slowdown, as it remains below the threshold of 50, it sustains the three-month moving average sideways trend. It thus allows for moderate optimism that the economic slowdown is likely to be mild. Currently, our Now-Casting model shows GDP growth at 4.2% in 3Q19.

Bond market drivers: 2020 zero-deficit budget draft dragged 10Y yield down. Over the course of the week, we have seen some strong moves on the long end of the curve. In the first half of the week, Polish 10Y yields declined substantially as the government published a draft of the 2020 budget act with no deficit planned. Given the lack of important local releases this week, core market developments should drive yields and the escalation of the conflict surrounding Brexit should remain in focus.

FX market drivers: EURPLN stays volatile. The zloty depreciated further on the back of the trade war escalation and increase in global risk-off mode. The EURPLN remained only marginally below 4.40, which is the weakest level since mid-2018. This week, global factors should further shape the development of the zloty, with the main focus being on Brexit uncertainties.

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General information

AuthorErste Group Research
Product nameCEE Country Update
Topic in focusFX, Macro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-


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