Polish assets & elections
12-Nov-2023. Summary of recent asset returns. Polish assets. Polish assets have been performing very well since the beginning of October (2 weeks before the parliamentary elections), and the election results only accelerated outperformance (Chart 1). Index WIG Banks increased by 31% in this period, and the main equity index WIG20 expressed in USD increased 22.5%. The Polish currency also strengthened against the EUR by approximately 4.7%. The Polish currency also strengthened compared to the basket of regional currencies, especially after the general elections (Chart 2).
flash CPI (Oct-2023)
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31-Oct-2023. Poland. Flash CPI for October: 6.5% YoY Annual inflation change down to 6.5% (from 8.2% in September) and down from the cycle peak of 18.4% in February 2023. But in general, it should be remembered that energy and gas prices are administratively frozen, and fuel prices at gas stations in October dropped around the general elections, which means they should increase in November (precisely "Fuel for private means of transport" dropped in October by 4.2% MoM). Inflation in Poland is falling, as in other CEE countries, however the key will be the next months and in which countries it will remain sticky and at higher levels, and in which it will move towards the inflation targets. In Poland, inflation looks stickier for now.
Polish assets (30-Oct-2023)
30-Oct-2023. Polish financial assets have been behaving very well for 4 weeks and contrary to global trends. Exactly 2 weeks ago the general elections were held in Poland (and the market shot up the day after). The main Polish stock indices have broken the global downward trend and, for example, WIG20USD has increased by 20.3% since October 3, 2023 (in this period, the S&P500 is down 1.4%) - see chart 1. Polish banks have increased even more since October 3, 2023, by as much as 27.7% (Chart 2). This is also in spite of the main downward trend for European banks (-5.1% in this period) and American banks (-0.96% S&P500 Financial) - see chart 2.
PL wages nominal & real
21-Jun-2023. Poland. Przeciętne wynagrodzenie wzrosło w maju o 12,2% (rok do roku), ale to nie oznacza że się bogacimy. W marcu 2021 roku inflacja była ostatni raz poniżej górnej granicy celu inflacyjnego (3,5%). Od tego czasu realne przeciętne wynagrodzenie spadło o 7,05% (-3,32% rocznie). Od stycznia 2010 do marca 2021 roku realne wynagrodzenie rosło 3,36% rocznie! To bardzo dużo. A w najbliższym czasie raczej nie grozi nam realny wzrost wynagrodzeń..
PLN round trip
11-Oct-2023. The Polish Zloty (PLN) has recently made a round trip … After the first rate cut (75 bps, so 3x more than the market expected) there was a strong weakening vs EUR, then after the second cut there was a strong strengthening... On the charts: PLN & the CEE currencies vs EUR and the CEE FX Basket of equal-weight of CZK, HUF and RON vs EUR.
NBP second interest rate cut
4-Oct-2023. Poland. Second interest rate cut. Today we had the second interest rate cut in Poland (from 6.0% to 5.75% and in total after two cut we are already 100 bps lower). The Polish currency strengthened significantly immediately after the announcement (the market expected a cut of 25 bps, but there were fears it could be more). However, throughout the day the Polish currency strengthened only by 0.32%, while the Hungarian forint strengthened today by 0.51% and the Czech koruna by 0.46% respectively (RON unchanged today). Therefore, the Polish currency has strengthened less today than other currencies in the region. Since the first cut on September 6, the Polish zloty has been significantly weaker than other CEE currencies (first chart). The second chart shows the full tightening cycle in the CEE region.
WIG20 real & nominal
3-Oct-2023. 2022-23: WIG20 real vs nominal. In Poland, as well as in other CEE countries, inflation was much higher than in the USA. The peak of the annual inflation in Poland was 18.4% (vs. 9% in the USA). Therefore, the difference between the real and nominal series is much larger in Poland. In other words, the attractiveness of Polish stocks (in real terms) are relatively much higher. We are talking about a nominal drop from the market top of 24.2% - and in real terms the drop was 39.7%.
