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2019/12/16 / Erste Group Research

Poland Weekly Focus | Did industry contract in November?

We wish all our readers a Merry Christmas and a Happy New Year 2020! The next Weekly Focus Poland will be published on January 7, 2020.

Main macro indicators for November due this week. We expect industry to dive into negative territory due to unfavorable calendar effect and dropping market sentiment. Retail sales should sustain recent growth dynamics of around 5% y/y.

December 19 | Industry to go into red. The PMI holding well below the margin of 50 and local manufacturing indicator going deeper into negative territory suggest a further slowdown in industrial activity. Moreover, the negative calendar effect (-1WD) in November will likely put additional pressure on the performance of industry in Poland. We expect industrial production to contract and arrive at -3.7% y/y in November (consensus at 0.3% y/y). such a negative scenario materializes, we could see GDP growth dropping visibly below the 3.5% margin in 4Q19.

Bond market drivers | 10Y yield locked at about 2%. Over the course of the week, the Polish 10Y yield remained mostly stable. As an aftermath to the outcome of the British elections, the long end of the curve jumped above 2.05%. However, the increase was only temporary and the 10Y yield returned towards 2.0% on the last trading day. This week, the local curve should remain stable. However, if a negative scenario of contraction in industry materializes, we could see the long end of the Polish curve dropping below the 2% margin.

FX market drivers | EURPLN remains on stronger side of 4.30. Less dovish than expected comments from the Fed and ECB, as well as the victory of Boris Johnson in the British parliamentary elections, pushed the EURUSD up and supported the zloty. The EURPLN remains locked below 4.29. This week’s local macro releases should be neutral for the zloty.

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General information

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


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