The end of last week brought big declines of US indices. The Dow Jones Industrial Average finished at 13,510 whiles the S&P500 just over 1,500. Also, Monday’s morning, the EURUSD reached a new all-time high at 1.4347. Bad news for American currency and stock markets might continue this week. The two most important reports will be Wednesday’s Existing Home Sales (Expected: 5.25M; Prior: 5.50M) and Thursday’s New Home Sales (Expected: 770K; Prior: 795K) publications. Analysts expect worse results than previously confirming the recession on the US housing market. Investors wonder how long it will last and they expect one more interest rate cut by the Federal Open Market Committee on their next meeting. This expectation is pushing the dollar to all-time lows against the euro.

Interesting things will be going on not only in the US. On Tuesday, Canada will be published the Core Retail Sales while Australia the CPI inflation report. Wednesday will be crucial for players betting on the kiwi, the New Zealand’s dollar. That is when the Reserve Bank of New Zealand meets to establish the level of interest rates. Although analysts expect no change from the current 8.25% level, they will follow the announcement since the NZD is one of the most popular currencies used in carry trades transactions (with the Japanese yen).

Investors in Poland have to deal not only with important macroeconomic publications this week, but also with the outcome of the new elections. On Monday, the Core CPI inflation report will be published. Analysts forecast that inflation will stay constant at 1.2% on a yearly basis. Tuesday will bring the Retail Sales (Expected: 16.5%, Prior: 17.4%) and Unemployment Rate (Expected: 11.7%; Prior: 12.0%) publications. Also important will be Thursday’s publication of the Monetary Policy Council minutes from their last meeting. We got accustomed that the Polish stock market follows the US indices rather than reacts to macro reports. Also in consideration has to be taken the outcome of the elections that took place this past Sunday. According to poles, the Civic Platform won the elections with over a 40% support, while Law and Justice (President’s Kaczynski’s party) came second (around 30%) with the Social Democrats (LiD – around 14%) coming third. Investors hope the changes in the government will make Poland more competitive on the global marketplace.

Adam Narczewski