Financial markets in the world are focused in this week primarily on the ECB meeting and Friday’s US data, possibly successive polls from France, while in Poland today important seems decision of the Monetary Policy Council. The decision is obvious, but the message is not. In the US today we will have ADP report.


After last meeting, the Council indicated that the increase in inflation at the beginning of this year is not a basis to raise interest rates because its sources are external, and the increase will be only temporary. This opinion was in my opinion the most reasonable and also allow the Council to extend the period of calm monitoring economic situation. However, the situation has changed. First of all, from the Polish economy are coming more and better data. The January package of monthly reports was basically unambiguously positive, starting with retail sales, production, on employment ending.

In addition, a large revision of the employment data indicates that the situation in terms of household income is even better than we thought. Data etched into the current expectations of economic recovery after the decline from the second half of last year. Secondly more favorable is external situation. Indicators of business activity in Western Europe has indicated economic recovery. This should continue to support a strong export sector of the Polish economy. In this situation, the Council may look otherwise on increase in inflation. If the economic situation in Poland and Europe actually improved in pace from the beginning of the year, the Council probably would find that the inflation target can be achieved more quickly. Today interest rate hike is not expected, but the market will be carefully reading the message, looking for signals of future increases.

On the global market the number one topic in the morning are disappointing data from China, where in February was recorded the first from three years trade deficit. On the one hand, a recent powerful increase in imports was great news for the business partners of the Middle Kingdom (this was one of the causes of economic recovery in Europe), on the other deficit means a false start for the purpose of economic growth for this year at 6.5% and may suggest that the supply side is not keeping pace with demand stimulated by the credit. The fact is that the data can be significantly affected by the Chinese New Year holiday, but data was taken as a major disappointment.

Today, the most awaited publication remains the ADP report from the US labor market (14:15), the last important publication ahead of Friday’s government report. At 10:00 dollar costs 4.0795 Polish Zloty (PLN), euro 4.3080 PLN franc 4.0258 PLN, while the pound 4.9709 PLN.

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