Poland: Economy growth contracts to 3.6% year-on-year

Poland: Economy growth contracts to 3.6% year-on-year

ING Economics ING Economics 30.11.2022 16:46
In 3Q, Poland's GDP slowed to 3.6% YoY after a very solid first half. This was the result of a significantly lower contribution from private consumption. In contrast, the contribution from inventory changes was unexpectedly high. This could mean that companies were taken by surprise by low demand, or increased inventories as a precautionary measure A shopping mall in Warsaw, Poland The third quarter contribution from private consumption came in at just 0.5pp vs. 3.6pp in the second quarter. In year-on-year terms, private consumption growth declined from 6.4% in 2Q22 to just 0.9% in 3Q22. The reason is high inflation growth, which has almost continuously outpaced wage growth since May. This will not change in 1H23 and is one of the main reasons for the slowdown we expect for next year. Adding to this is generally worse household sentiment, which is curbing demand for durable goods. Perhaps this is a delayed impact of the outbreak of the war, as 2Q22 consumption was relatively strong. GDP structure in Poland A significant deterioration in consumption in 3Q22; inventories are still quite strong The contribution from inventories was even higher than in 2Q22 (2.2pp vs. 1.8pp). This could mean that (a) companies were taken by surprise by low demand and were unable to adjust production in time, or (b) as a precautionary measure, they increased inventories in the face of supply shortages and accelerating inflation. However, investment performed relatively poorly (adding only 0.3pp to GDP growth, down from 1pp a quarter earlier). This is partly due to the difficult situation facing the construction industry. Infrastructure investment work has been hurt either by a lack of access to the Recovery Fund, or a strong increase in the cost of work, which has prompted companies to walk off construction sites and made it difficult to award tenders. Residential construction, meanwhile, is facing a slump in demand, due to high interest rates and a collapse in mortgage lending, among other factors. In YoY terms, investment growth fell from 6.6% to 2%. Read next: The Global Oil Market Is Expected To Tighten Over 2023| FXMAG.COM As expected, the contribution of net exports to GDP improved (from -0.7pp to +0.6pp). At the turn of the year, companies tried hard to increase inventories, fearing renewed disruptions in global supply chains. Import growth has been slowing for several quarters, while exports have begun to accelerate since 2Q22 amid softening domestic demand and the weakening zloty. The overall economic picture in 3Q22 is lacklustre, despite the fairly strong YoY headline GDP growth and an acceleration in seasonally-adjusted GDP growth to 1% QoQ in 3Q22. We view this acceleration as a rebound after a strong 2.3% quarter-on-quarter decline in 2Q22. Significant weakness in consumer demand bodes poorly for the turn of the year, with companies more likely to look to adjust inventories as price increases slow down. We still think GDP growth should be close to 5% YoY this year (mainly due to strong 1H22), with GDP slowing to around 1% YoY in 2023. Read this article on THINK
As more central banks continue to catch up with the FED's policy, we could be seeing a shift in the balance of power in the currency market says XTB's Walid Koudmani

As more central banks continue to catch up with the FED's policy, we could be seeing a shift in the balance of power in the currency market says XTB's Walid Koudmani

Walid Koudmani Walid Koudmani 30.11.2022 16:40
The level of $80 could play an important role in determining whether the upward move continues or if WTI will encounter resistance and pullback once again   While the situation on the oil market has been quite uncertain as of late, particularly after the start of the Russia-Ukraine conflict, prospects of slowing demand resulting from economic downturn have been weighing increasingly on the price of this key commodity. Furthermore, the ongoing zero-covid China policy has significantly impacted demand prospects in the world's second biggest economy as lockdowns and industrial shutdowns have reduced the need for transportation and impacted shipping routes. Despite this, there is still one last OPEC+ decision left for 2022 and while it is unlikely the group will decide to adjust production, any notable shift in production quotas could have an effect on prices and bring an increase in volatility as we head towards the end of the year. The level of $80 could play an important role in determining whether the upward move continues or if WTI will encounter resistance and pullback once again.  This week's prints stand for the last data pack ahead of December Fed decision, supposing they came as a surprise would Fed go for a 75bp rate?   This week's highly anticipated data pack may play an important role in the final FED decision of 2022 as the central bank continues its fight against inflation while attempting to not cause a demand shock. Consumers remain under extreme pressure as prices rise across the board while rising commodity prices add to the problem and as the central bank's hawkish policy continues to constrain demand. The US central bank has shown a willingness to adjust its policy according to the data and this time could be similar as many begin to speculate as to when it will begin to reverse its policy while others wonder if the target rate will be adjusted further. In either case, the FED might be running out of ammo when it comes to tackling inflation and may choose a more cautious approach in order to ensure that it is mitigated in a sustainable manner. This NFP report may also have an important role when it comes to the strength of the US Dollar as the greenback continues to be under pressure after a period where it dominated all other currencies   In addition to playing a key part in the inflation discussion, this NFP report may also have an important role when it comes to the strength of the US Dollar as the greenback continues to be under pressure after a period where it dominated all other currencies. The USD Index has been dropping for several weeks and while it may be unlikely that we see a significant rebound, the FED's decision may lead to a change in sentiment as we head into 2023. Furthermore, the USDIDX is testing the 200 SMA on the daily chart after trading in the reaction area around 106 points which may act as a support if it manages to hold. As more central banks continue to catch up with the FED's policy, we could be seeing a shift in the balance of power in the currency market away from the US dollar which has reigned over others in recent times.  
ECB director calls for Bitcoin ban, says BTC is not suitable for payments or investments

ECB director calls for Bitcoin ban, says BTC is not suitable for payments or investments

FXStreet News FXStreet News 30.11.2022 16:21
European Central Bank's head stated Bitcoin should not be legalized.The bank’s director general Ulrich Bindseil states that regulation of cryptocurrencies is not equivalent to legalization.The blog post from the central bank comes after the FTX exchange filed for bankruptcy on November 11. The European Central Bank (ECB) detailed its stance on Bitcoin (BTC) and the cryptocurrency ecosystem in a blog post on November 30. In this article, the financial institution outlined the stark differences between regulation of digital assets in Europe and the US and that they should not be legitimized. FTX implosion and regulatorsThis development comes after FTX, one of the largest exchanges in the world, imploded and filed for bankruptcy. As a result of the exchange's fallout, many creditors have millions stuck on the platform and are awaiting a decision.This dark patch in the cryptocurrency ecosystem's timeline has attracted many critics to say, "I told you so." However, cryptocurrency enthusiasts like Changpeng Zhao, the founder of the Binance exchange, remain optimistic and have come together and allocated billions to help the crypto ecosystem. European Central Bank warns about Bitcoin’s long-term damage to traditional finance ECB’s Director General Ulrich Bindseil and advisor Jürgen Schaff outlined the negative impacts of cryptocurrencies and how regulators are not on the same page.Bindseil and his colleagues' criticisms include, the system's high energy consumption, its waste products, and BTC's suitability as a payment system or form of investment.The blog further adds that since it is neither an effective payment system nor an investment, “it should be treated as neither in regulatory terms and thus should not be legitimised.” The financial industry should be wary of the long-term damage of promoting Bitcoin investments - despite short-term profits they could make (even without their skin in the game).Additionally, the duo further outlines the stark difference between how Europe and the US approach the crypto space in terms of regulation. The blog stated,While the EU has agreed on a comprehensive regulatory package… Congress and the federal authorities in the US have not yet been able to agree on coherent rules.Bindseil and Schaff add that the current regulation of digital assets is “partly shaped by misconceptions” and the belief that laws should not hinder “innovation.”
US October PCE inflation & ISM Manufacturing PMI Preview: Seen through Fed’s eyes

US October PCE inflation & ISM Manufacturing PMI Preview: Seen through Fed’s eyes

FXStreet News FXStreet News 30.11.2022 16:21
The US core Consumption Expenditures Price Index will likely signal easing pressures.The US ISM Manufacturing PMI is foreseen to fall into contraction territory.EUR/USD could revisit the 1.0500 price zone after the dust settles.December will kick start with a high note in the United States, as the country publishes the Personal Consumption Expenditures (PCE) Price Index data, the US Federal Reserve’s preferred inflation gauge, while the Institute of Supply Management (ISM) will unveil the November Manufacturing PMI.Updates on inflation and business growth will be critical ahead of the last US Fed decision of the year, scheduled for December 14.Core PCE inflation, which excludes volatile food and energy prices, is expected to have risen by 0.3% MoM, while the annual reading is foreseen at 5%, easing from 5.1% in November. On the other hand, the ISM Manufacturing PMI is expected to have fallen into contraction territory, from 50.2 in October to 49.8.Signs of easing inflation will be encouraging but not a surprise. Neither will confirmation the economy has contracted. Still, a Manufacturing PMI below 50 would undoubtedly hit the US Dollar, while a better-than-anticipated figure could boost the battered American currency.US Federal Reserve's upcoming decisionThe United States Federal Reserve (Fed) has hinted at a potential easing in the pace of tightening. After hiking rates by 75 bps for five consecutive meetings, the central bank is now expected to pull the trigger by a modest 50 bps. Data pulled from the CME FedWatch Tool shows a roughly 70% likelihood of such an outcome, sending the benchmark rate to a range of 4.25% to 4.5%.Easing price pressures and fears higher rates will slow economic progress could easily explain the upcoming decision, although it is worth noting that Fed officials will always prioritize inflation. Should the related data surprise on the upside, market players could lift bets on another 75 bps and send the Dollar up amid a risk-averse environment which could put stock markets in a selling spiral. A worse-than-anticipated ISM Manufacturing PMI should exacerbate the dismal mood scenario.Softer-than-anticipated core PCE inflation, alongside an ISM Manufacturing PMI at 50 or above, should trigger optimism. Stock markets will likely rally, while the US Dollar will likely fall against all of its major rivals.EUR/USD possible scenariosThe EUR/USD pair peaked at 1.0496 at the beginning of the week, its highest since last June. It bottomed at 1.0318 on Tuesday, bouncing back from the level and now aims to regain the 1.0400 threshold.From a technical perspective, the risk skews to the upside, although the lack of action these days has left the daily chart with a neutral-to-bullish tenor. EUR/USD remains stuck around a bearish 200-day Simple Moving Average (SMA), unable to clear the moving average since June 2021. Nevertheless, the 20 SMA continues advancing above a now mildly bullish 100 SMA, reflecting buyers’ strength. The Momentum indicator heads south above its midline, but the Relative Strength Index (RSI) indicator resumes its advance at around 61, also reflecting bulls’ dominance.EUR/USD can recover its bullish momentum if it closes Wednesday above the 100-day and challenges the weekly high should US data spur optimism. A slide below 1.0300, on the other hand, should open the door for a steeper bearish correction towards 1.0240, the November 21 daily low. Further declines seem unlikely, although if the pair breaks lower, a retest of parity will be on the table.
Raging PMs

Raging PMs

Monica Kingsley Monica Kingsley 30.11.2022 16:11
S&P 500 maintained overnight posture, and bonds held up really fine into the close while the dollar isn‘t showing too many signs of bullish life. The Powell speech is likely to be shaken off as I don‘t think he would tighten the screws more so than Williams and Bullard did, i.e. that markets won‘t be truly shocked.What matters more, is recovering from „sell the (good GDP) news“ as stated before the data with the still hot PCE one. Premarket S&P 500 gains are gone, and now it‘ll be up to getting Powell out of the way. Positive seasosnality is still there, but as per the earlier shared update, dust has to settle first in this largely neutral week where we make the bottom before launching higher in the final 2-3 weeks of Dec. The daily levels given yesterday, are still valid today.The real action is though in precious metals and commodities where even the greatly vulnerable (to upcoming declines in economic activity, i.e. recession) crude oil is seeing solid gains. Silver, copper and gold are predictably scoring and extending gains, with miners in the tow (i.e. no red flags) on the inflation data. So sorry for all those who followed permabears‘ siren songs about imminent drops that just can‘t and won‘t materialize to a meaningful degree. Real assets, similar to 1970s, are undergoing a secular shift, and the recognition as measured e.g. in relation to the stock market, isn‘t yet there. So much more price appreciation to come – and we needn‘t wait truly long for that! (Chart courtesy of www.stockcharts.com).Keep enjoying the lively Twitter feed serving you all already in, which comes on top of getting the key daily analytics right into your mailbox. Plenty gets addressed there, but the analyses (whether short or long format, depending on market action) over email are the bedrock, so make sure you‘re signed up for the free newsletter and that you have Twitter notifications turned on so as not to miss any tweets or replies intraday. I can‘t stress that enough as there also intraday profit opportunities that I cover on the go via Twitter.
Limiting The Availability Of Elon Musk's App In The App Store Could Be A Significant Blow For Twitter

Limiting The Availability Of Elon Musk's App In The App Store Could Be A Significant Blow For Twitter

Conotoxia Comments Conotoxia Comments 30.11.2022 15:16
Elon Musk wrote on the platform he owns: "Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?" and "Apple has also threatened to withhold Twitter from its App Store, but won't tell us why". In response to presenter Liz Wheeler's tweet, he in turn announced: "I certainly hope it doesn't come to that, but yes, if there is no other choice, I will make an alternative phone." What can Tesla afford to do? Elon Musk is famous for accomplishing things that seem impossible. From launching rockets into space that still return to earth on their own, to creating the Starlink internet, to buying Twitter shares for more than $40 billion. Wouldit now actually challenge the iPhone maker? Let's try to come down to earth and compare the capabilities of the billionaire Tesla's biggest company (Tesla) and Apple (Apple). There is no denying the tremendous growth rate of the electric car manufacturer. The company's revenue growth was 55.9% year-on-year and operating profit rose by 84% in the same period. The manufacturer's net margin now stands at 14.95%, with an average of 7.5%. - according to Statista. The company additionally has as much as US$21.1 billion in cash and cash equivalents to spend on research and development. However, it seems that producing another smartphone with its own system (independent of Apple or Google) would not happen overnight. Therefore, even if the decision had already been taken, we would have seen the results, as with electric cars, after a few years. It seems that investors have recently become pessimistic about the future of Tesla's shares, which have fallen by more than 55% since their peaks. Source: Conotoxia MT5, Tesla, Weekly Apple still with no official response The company of the smartphone manufacturer, among others, has not yet issued an official response. However, it seems that the action limiting the availability of Elon Musk's app in the App Store could be due to the company's policy regarding the quality of Twitter's verified content. Excluding the app from access to iPhone users and reducing advertising spend on that platform could be a significant blow. According to ad management firm Pathmatics, Apple was the top advertiser on Twitter in the first quarter of this year, spending around US$48 million on advertising here, which accounted for around 4% of the company's total revenue. Source: Conotoxia MT5, Apple, Weekly Apple is currently the world's highest valued company with a capitalisation of US$2.25 trillion. It also boasts satisfactory results. Revenues are up 8% year-on-year and operating profit is up 4.66%. The company appears to be leveraging its competitive advantage with a high net margin of 25.31%. Meanwhile, according to the Gurufocus platform, the average for the technology sector is 19.6%. An additional advantage for the manufacturer with the bitten apple symbol is USD 48.3 billion in cash and cash equivalents. Looking at the data presented, it seems that creating a new smartphone that enters mass production, maintains standards and gains global popularity may be even more challenging than producing an electric car. Therefore, it seems possible that the conflict would be resolved in the coming weeks. Otherwise, Twitter could be the biggest casualty. Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Eurozone: November CPI Fell Sharply To 10.0%

Eurozone: November CPI Fell Sharply To 10.0%

Kenny Fisher Kenny Fisher 30.11.2022 15:09
It continues to be a quiet week for the euro. In the European session, EUR/USD is trading at 1.0363. Eurozone inflation falls to 10.0% The ECB’s number one priority has been bringing down inflation, which has hit double-digits. ECB policy makers are no doubt pleased that November CPI fell sharply to 10.0%, down from 10.6% a month earlier. This beat the consensus of 10.4%, and the euro has responded with slight gains. The drop in eurozone inflation was the first since June 2021, and investors will be hoping that this indicates that inflation is finally peaking. On Tuesday, German CPI showed a similar trend, falling to 10.0%, down from 10.4% (10.3% est). Still, eurozone Core CPI remained unchanged at 5.0%, matching the forecast. One inflation report is not sufficient to indicate a trend, and with inflation still in double digits, nobody is declaring victory in the battle against inflation. Still, the drop in German and eurozone inflation increases the likelihood of a 50 basis-point increase at the December 12th meeting, following two straight hikes of 75 basis points. With market direction very much connected to US interest rate movement, a speech from Fed Chair Jerome Powell later today could be a market-mover. Powell is expected to discuss inflation and the labour market, and his remarks could echo the hawkish stance that Fed members have been signalling to the markets over the past several weeks. The market pricing for the December meeting is 65% for a 50-bp move and 35% for a 75-bp hike, which means that the markets aren’t all on the Fed easing rates. Even if the Fed does slow to 50 bp in December, it will still be a record year of tightening, at 425 basis points.   EUR/USD Technical EUR/USD is testing resistance at 1.0359. Above, there is resistance at 1.0490 There is support at 1.0264 and 1.0131 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Australian Monthly Reports Are More Volatile And May Not Mark A Changing Trend

The Australian Monthly Reports Are More Volatile And May Not Mark A Changing Trend

Kenny Fisher Kenny Fisher 30.11.2022 14:52
The Australian dollar has extended its gains on Wednesday. AUD/USD is trading at 0.6723 in Europe, up 0.54%. Australian inflation falls below 7% Australia inflation surprised on the downside with a 6.9% gain (YoY) in October. This was down sharply from the 7.3% clip in September and beat the consensus of 7.4%. The burning question on everyone’s lips, is, of course, “has inflation finally peaked?” Before the champagne bottles come out, it’s worth noting that a new method was used to calculate October CPI – under the old method, CPI would have been 7.1%, a less dramatic decline. Core CPI ticked lower to 5.3%, down from 5.4%. Australia recently added monthly inflation reports to supplement the quarterly releases, and the monthly reports are more volatile and may not mark a changing trend. Investors and policy makers will have to wait for the next quarterly CPI release in January to get a better handle on which direction inflation is headed. There was positive news from the construction sector, as Construction Work Done rebounded in Q3 with a strong gain of 2.2%, above the consensus of 1.5%. This follows a -3.8% read in Q2 and was the first gain since Q3 2021. The markets will be paying close attention to Jerome Powell, who is expected to touch upon inflation and the labour market in a speech later today. The Fed has orchestrated an effective Fedspeak blitz, with Fed members presenting a hawkish outlook for rate policy, even though the Fed has signalled it will ease up on rates in December and hike by “only” 50 basis points. This year will set a record for Fed tightening, with 425 basis points if the December increase is 50 bp. With the battle against inflation far from over, the last thing the Fed wants to temper any market exuberance, as a higher stock market could drive more inflation.   AUD/USD Technical AUD/USD continues to test resistance at 0.6707. The next resistance line is 0.6829 There is support at 0.6633 and 0.6511 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

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