The week ahead of us will certainly bring some important macroeconomic publications that can affect the world markets. Still, stock and currency markets will be under the influence of last week’s decision of the FOMC.

Last week we have seen the dollar losing ground against the major currencies and equities markets rebounding after the Fed cut interest rates by 50 basis points. The effects of this decision for the whole US economy will be noticed in the future. This week investors need to focus on the US housing market publications as well as the manufacturing sector news.

Monday will be poor in macroeconomic publications but on Tuesday the game will start again. The US Exisitng Home Sales report will be published with forecasts being lower than last month’s reading. This report presents the annualized number of existing residential buildings that were sold during the previous month. Also, worth attention will be Germany’s Business Climate Index released by the Ifo Institute. On Wednesday, Core Durable Goods Orders and Crude Oil Inventories in the US will be published. The inventories level oil affect prices of petroleum products and in recent time it has been declining causing oil prices to rally over 84 USD per barrel (crude oil) and 79 USD ( Brent oil). Thursday will bring the US Gross Domestic Product publication along with the deflator. Thursday will also be the day when a series of reports from Japan will be released including Core CPI, Industrial Production, Unemployment Rate, and Retail Sales. Friday has for us the Canadian GDP and American PCE Core Price Index, Personal Income and Spending, Conference Board Consumer Confidence Index and Chicago PMI.

Worse news from the US housing market can weaken the American dollar even further. Today in the morning, the EURUSD went over 1.41 and the journey upward is still possible. Especially, when investors will react to worse news from the housing market, not taking into account that the effect of the lower cost of money will be felt in at least a couple of months. The equities markets are on a raise and with increasing investors’ confidence should continue their march in the upward trend.

The EURUSD started the week at 1.4110. The USDJPY, which has been declining since Friday, is quoted at 114.95. The Polish currency, the Złoty, stays strong. The USDPLN declined even to 2.6520 today in the morning but started rebounding. The Polish currency also gained against the euro. The EURPLN dropped to 3.7493 today in the morning but retreated to 3.7602 since then. The Polish Złoty gains on the weakness of the American dollar and decreasing risk aversion of investors. If the appetite for risk continues this week, further strengthening of the PLN is possible. The Dow Jones Industrial Average broke 13,800 and has not been so high since the end of July; so is the S&P 500 at 1,520. The Polish WIG 20, which experienced big swings throughout Friday, opened the week at 3,780 on Monday morning.

Adam Narczewski