New macroeconomic data, monetary policy assumptions and the parliamentary committee meeting on the State Tribunal for Adam Glapiński are among the most important events of the coming week. Investors will also be waiting for quarterly data from other companies on the Stock Exchange, statements from central banks and decisions on interest rates in the Czech Republic, Sweden and Australia, among others.
Central Statistical Office data – retail sales and production
On Monday, domestic investors will focus on the publication of another portion of data from the Polish economy – the Central Statistical Office will publish August readings for construction and assembly production and retail sales.
“The industrial production and employment results published last week were disappointing, but this does not mean that the next data will surprise in the same direction – in previous months there were surprises in the opposite direction. Our forecast for construction production is slightly better than the consensus, for sales it is slightly below, but the differences are small,” Santander BP economists assessed in the report.
“In both cases, a deterioration in the annual dynamics is widely expected compared to July, which is partly due to the effect of a smaller number of working days and partly to the high base from August 2023,” they added.
The Sejm Committee on the State Tribunal for the President of the National Bank of Poland
According to earlier announcements, a meeting of the Sejm's Constitutional Accountability Committee (ODK) regarding the motion for The State Tribunal for the President of the National Bank of Poland, Adam Glapiński. However, the session is not yet on the parliamentary calendar.
Adam GlapinskiRadek Pietruszka/PAP
Member of the committee Ryszard Petru informed that the ODK wants to call the first witnesses then, but their list is secret. Chairman of the Committee Zdzisław Gawlik (KO) indicated that he would like the president of the NBP, Adam Glapiński, to be questioned by the committee as one of the last.
After the Commission meeting in early September, NBP President Adam Glapiński assessed in a statement that the procedure initiated against him to bring him before the State Tribunal could paralyze the work of the central bank and set a dangerous precedent in the country and internationally. In turn, the NBP assessed in a statement that the initial motion to bring the NBP President before the State Tribunal is flawed for systemic, procedural and structural reasons and violates the independence of the central bank.
Monetary policy assumptions
In the coming days, the “Monetary Policy Assumptions for 2025” should be published. The list of acts awaiting publication of the RCL states that the document will be presented no later than September 26.
In an interview for PAP Biznes, Artur Soboń, a member of the NBP management board, informed that there will be no significant changes in the documentIn his opinion, the instruments included in the monetary policy assumptions have proven effective in recent years, providing room for great flexibility in actions.
Bond Auction and Market Rates
For the domestic debt market, the event scheduled for Wednesday will be important Sales auction treasury bonds. This will be the second and last auction of Treasury securities in September. The Ministry of Finance will present the details of the supply on Monday at around 3:00 p.m.
“In the coming week, we will most likely see a continuation of the upward movement in market rates, given that we still assume a much more distant date for the first rate cut in the country, and expectations regarding rate cuts on core markets may be a bit too high. A correction on the debt market may be caused by the preparation of portfolios for the bond auction scheduled for the coming week. After the auction, credit spreads may gradually narrow due to the fact that net issuance will already be strongly negative in October,” say economists at Santander BP.
“However, we do not assume that this narrowing will be significant, because in the future the market will have record emissions next year, probably with their culmination in the first half of the year,” they add.
Domestic investors will also be closely following further news regarding flood in southern Poland and its effects. On Saturday, the governors presented the first estimates of losses in the areas affected by the flood. In the most affected Lower Silesian province, the estimates are almost PLN 4 billion. According to government data, almost 2.5 million people live in the area affected by the state of natural disaster.
PCE Deflator, a measure of inflation in the US
The US Federal Reserve's preferred measure Inflation – PCE deflator, i.e. personal consumption expenditure price indexwill be released on Friday. The market is forecasting that PCE rose 2.5 percent year-over-year in August.
The data will be important for the market in terms of further moves The Fed, which last week cut interest rates by 50 basis points to a range of 4.75-5.00 percent. After the meeting, FOMC chairman Jerome Powell indicated that the bank did not have a set rate and would make decisions from meeting to meeting.
“We are not following any set course. We will continue to make our decisions at each meeting. We know that easing monetary policy restrictions can make it harder to make progress on inflation. At the same time, easing those restrictions too slowly could unnecessarily weaken employment,” Powell said at the time.
In the context of monetary policy, the statements of Fed representatives scheduled for this week may be key. In the coming days, the president of the Fed in Chicago Austan Goolsbee, the president of the Fed in New York John Williams, member of the Fed board Michael S. Barr, and on Thursday the president of the bank himself – Jerome Powell – are planning to speak publicly.
Data on inflation and interest rates abroad
In Europe, macroeconomic data will draw attention, including preliminary inflation readings for September from some economies. The market will also get to know a number of economic indicators – preliminary PMI for industry and services, the German Ifo and the European ESI indices.
In the Central and Eastern European region, the decisions of the National Bank of Poland will be important for the market. Hungarian (MNB) and the Czech National Bank (CNB) – in both cases, monetary policy easing is expected.
The market expects the MNB to cut its key interest rate by another 25 basis points to 6.5% at Tuesday's meeting, after a rebound in inflation forced the bank to pause its easing cycle last month after 15 cuts in a row. The MNB has signaled that the door is open to further easing, depending on inflation developments and the policy stance of major central banks.
In the case of the Czech National Bank (CNB), the market also expects a cut of 25 basis points at the next meeting (Wednesday).
A 25-basis-point rate cut this week is also widely expected from the Swedish National Bank, which will make a decision on Wednesday. However, the market does not rule out that the bank will decide to ease more – by 50 basis points.
IN Australia In turn, interest rates are expected to remain unchanged. According to economists surveyed by Reuters, in the face of increased inflationary pressures, the Reserve Bank of Australia (RBA) will keep rates stable until the end of 2024. According to the market, the bank may decide to cut rates only at the beginning of next year.
Main image source: Rafal Guz/PAP