Economic Analysis

In today's Eyeopener:

- Today, no major domestic data releases; final euro area inflation figures for June and US industrial production
- Core inflation stood at 3.0% y/y in June, down from 3.1% y/y in May
- Demand for the US dollar returned, while bond yields moved higher

Most June economic data releases are scheduled for next week. On Monday, we will see enterprise sector employment and wage growth, along with industrial and construction output and PPI inflation. Wednesday will bring retail sales and M3 money supply data. The same day, GUS will also publish the results of its July business and consumer sentiment surveys. On Thursday, the GUS Statistical Bulletin will complete the set, including, among other indicators, the registered unemployment rate (...)

Final data on June CPI confirmed the decline to 2.5% y/y from 3.1% y/y in May, signalled in the flash release. The 0.5 m/m fall was also unchanged vs. the first estimate by Statistics Poland. The inflation slide was driven by fuel and food, down 7.4% m/m and 0.7% m/m, respectively. It looks like core inflation also helped a bit – after seeing the detailed data we keep our estimate at 3.0% y/y. The May reading was 3.1% y/y. 
Overall inflation in goods was down to 1.3% y/y in June from 2.1% y/y in May. Inflation in services eased to 5.4% y/y from 5.7% y/y. The end of the government program mitigating the fuel price increase and the recent rise in energy commodity prices mean that CPI growth may return to or slightly below 3% y/y in July and then stay in the 3-3.5% y/y range throughout 2H26. (...)

The 60-day ceasefire agreed by the US and Iran has sent a wave of optimism across markets. Even though the peace talks are still in progress, with the final result uncertain and shipping through the Strait of Hormuz remaining subdued, oil and gas prices have decreased to their lowest levels since early March, significantly reducing worries about further deterioration of the economic outlook. The return to business-as-usual will probably take some time and the disruption in global commodity supplies witnessed in 2Q has already taken its toll on 2026 inflation and GDP forecasts, but at least the risk of further revisions due to rising energy costs has declined. That should allow markets to focus on other issues, like the surprisingly hawkish rhetoric of the new Fed chair or the extreme heatwave sweeping through Europe with a potential to affect not only food prices but also economic activity (...)