Weekly financial markets review

Key information from the past week

1. Poland: GDP
According to the flash estimate released by Statistics Poland [GUS], Poland’s gross domestic product (GDP) in Q4 2022 grew by 2% (not seasonally adjusted). In seasonally adjusted terms, GDP went up by 0.4% YoY, and, compared with Q3 2022, it decreased by 2.4%. GDP growth directions and impact of individual GDP components are in line with the predictions.

Source: GUS. Own compilation.

2. Eurozone: Labour market
According to Eurostat, in January 2023, the seasonally adjusted unemployment rate in the Eurozone averaged 6.7% and it was stable compared to the December 2022 figures. The market expected the unemployment rate to stabilise at the level of 6.6%, but the December figures were revised from 6.6 to 6.7. The EU unemployment rate was 6.1%.

Source: Eurostat. Own compilation.

3. Eurozone: HICP Inflation
According to the flash estimate published by Eurostat, annual inflation in the Eurozone is expected to average 8.5% in February 2023. This means a decrease from 8.6% in January, while the market expected it to reach a level lower by 0.2 p.p. The flash estimate shows that food, alcohol and tobacco recorded the highest increases (15.0%), followed by energy (13.7%), non-energy industrial goods (6.8%) and services (4.8%). The market also expected the inflation rate growth to stabilise at 5.3%, while Eurostat forecasts it to stand at 5.6% YoY.

Source: Eurostat. Own compilation.

Source: Eurostat. Own compilation.

4. Eurozone: CPI inflation as per local methodologies
According to the flash estimate, Germany’s CPI inflation in February averaged 8.7% YoY, growing compared to January and exceeding the market consensus by 0.2 p.p. Similar situation was recorded in Spain, where, according to the flash estimate, the inflation increased to 6.1% YoY, vs. the expected level of 5.8%. In France, the expectations were around 6.1%, while the flash estimate was at 6.2%. According to the flash estimate, Italy’s consumer price inflation fell to 9.2% in February 2023 from 10% in the previous month, exceeding the expectations by 0.3 p.p. Slower decrease in the rate of inflation will probably affect central banks’ decisions and communications.

5. Eurozone: PPI
According to Eurostat’s figures and methodologies, in January 2023, industrial producer prices in the Eurozone increased by 15% and in the whole EU the producer price index averaged 16.4% YoY. Producer price inflation levels vary across economies. Material differences are also recorded in monthly growth rates.

Source: Eurostat. Own compilation.

Source: Eurostat. Own compilation.

6. PMI
According to the figures published by S&P Global, February PMI readings show a quickly improving sentiment in services (reaching virtually everywhere the level above 50 points, which indicates boom) and mixed sentiments in manufacturing sectors (e.g. in Germany, France and Japan the readings indicate downturn). Global sentiments are improved by significantly higher indices in China. Poland’s PMI increased in February 2023 compared to the previous month, which was in line with the economic situation readings by Statistics Poland. These readings continue to indicate that business conditions are not favourable. Business owners point to falling demand, particularly external.

Source: Bloomberg, S&P Global. Own compilation.

This week:

• Poland: MPC meeting
• Eurozone: GDP, Sentix, retail sales, inflation (final), industrial production (Germany)
• USA: labour market, industrial orders, trade balance
• Japan: GDP, money supply, trade balance, PPI, Bank of Japan meeting
• China: CPI, PPI, money supply, trade balance