What else caught our eye:
- NBP governor A.Glapinski said that rate hikes in October-November and the fact that market participants expect further policy tightening should be positive for the zloty. Moreover, the governor stressed that scale of monetary policy tightening would be such that inflation would return to the target in the MPC policy horizon. Policy actions will depend on the upcoming data.
- M3 money supply growth in October stabilized at 8.6% y/y. The share of cash in M3 continues to decline, as does its growth rate (12.6% y/y vs. 14.8% y/y a month earlier). For the first time since January 2020, the ratio of term deposits to current deposits increased, which may be the first reaction to the start of a monetary tightening cycle.
- The value of investments planned in 3q21 declined by 10.5% y/y (-16.8% y/y in 1h21). The data support our view that the upcoming investment boom will be moderate.
- Industrial new orders in October went up by 23.4% y/y, while new export orders increased by 13.3% y/y. This is yet another month when domestic orders are growing slightly faster than export orders - a sign of weaker foreign demand, which the domestic industry is so far bravely resisting.
The week ahead:
- CPI inflation in November likely went up to ~7.4% y/y from 6.8% y/y in October. A broad-base acceleration was driven by energy, fuel and food prices as well as a higher core inflation.
- Manufacturing PMI in November has still been affected by the supply constraints and shortages that are pushing the prices up.
- GDP growth in 3q21 is likely to be confirmed at 5.1% y/y as investment growth has remained subdued.
Number of the week:
- 51.9 bn PLN – state budget surplus after October - a new all-time high - up from PLN 47.6 bn after September.