Poland has seen a number of interesting changes in the economy and society in recent years, which are reflected in the CSO's statistical yearbook. For example, the number of drug offences (up 32 percent) and fraud (41 percent) has increased significantly since 2015. The declining number of marriages and increasing number of divorces have an impact on demographics, which remain problematic due to falling birth rates. Industry and automotive dominate the labour market and strikes have become increasingly rare. Poland is developing its tourism and industrial sectors, but rising energy costs pose a serious challenge to competitiveness. Seaports are expanding rapidly while Poles own the most cars per capita in Europe. Poland's economy relies heavily on cooperation with Germany, which remains its main trading partner. Despite dynamic growth, companies still struggle with low margins and the stock market is not growing at the same rate as GDP. In the coming week, we will learn about interest rate decisions in Canada, the US and the euro area, as well as US GDP data.
Table of contents:
- Canada's interest rate decision
- US interest rate decision
- Eurozone interest rate decision
- US gross domestic product
Wednesday, 29.01, 15:45 CET, Canada's interest rate decision
The Bank of Canada cut its main interest rate, for the fifth time, at its December meeting, bringing the total to 175 bps of cuts from its peak of 5 percent. Despite this, central bank officials do not anticipate more aggressive cuts next year and dropped their statement of further policy easing if the underlying economic scenario holds up.
The decision was preceded by data that showed Canada's GDP grew by 1 percent, year-on-year, in the third quarter, which was below the Central bank's forecasts. If the Q4 result also falls short of expectations, further reductions are likely to be considered.
The Central bank expects inflation to remain close to the 2 percent target in the coming years, although potential tariffs, from the new US administration, introduce uncertainty about further price increases.
Analysts are forecasting another 25bp interest rate cut, to 3 percent.
Source: Tradingeconomics.com
A higher-than-expected interest rate could act bullish for CAD, while a lower-than-expected rate could be bearish for CAD.
Impact: EUR/CAD, USD/CAD
Wednesday, 29.01, 15:45 CET, US interest rate decision
Fed officials acknowledged that risks to inflation have increased due to higher readings and possible changes in trade and immigration policy, according to the December FOMC minutes. While they still believe inflation is heading towards 2 percent, the process may take longer than previously expected. Some fear that disinflation has stalled or will be delayed. The Fed has signalled that it is close to the point of slowing, interest rate cuts It cut rates by 25 bps in December, to a range of 4.25-4.5 percent, and expects two more cuts in 2025, for a total of 50 bps.
Analysts forecast interest rates to remain at 4.5 percent.
Source: Tradingeconomics.com
A higher-than-expected interest rate could act bullish for the USD, while a lower-than-expected rate could be bearish for the USD.
Impact: EUR/USD, USD/PLN
Thursday 30.01, 14:15 CET, Eurozone interest rate decision
The ECB Governing Council (12 December 2024) cut three key interest rates by 25 bps, including the deposit rate to 3.00 percent. The decision is based on the improving inflation outlook and the effectiveness of monetary policy transmission. Inflation is expected to gradually decline, reaching 2.4 percent in 2024 and 1.9 percent in 2026. Inflation is approaching the 2 percent target, although it remains high due to the lagged response of prices and wages.
Analysts forecast interest rates in the euro area to remain at 3.15 percent.
Source: Tradingeconomics.com
A higher-than-expected interest rate could act bullish for the EUR, while a lower-than-expected rate could be bearish for the EUR.
Impact: EUR/USD, EUR/PLN
Thursday, 30.01, 14:30 CET, US gross domestic product
The US economy grew at an annual rate of 3.1 percent in the third quarter of 2024, exceeding earlier forecasts. Growth was mainly driven by higher consumer spending, including a 5.6 percent increase in spending on goods and rising spending on services. Business investment exceeded expectations, although housing and construction investment declined. Government consumption increased by 5.1 percent and the trade deficit narrowed, which had a positive impact on the strength of the dollar.
Analysts now forecast that US GDP will continue to grow at a rapid pace, reaching 3 percent in the coming quarters.
Source: Tradingeconomics.com
A higher-than-expected reading could act bullish for the USD, while a lower-than-expected reading could act bearish for the USD.
Impact: EUR/USD, USD/PLN
Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
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