Industrial Production Data – Forecast
We forecast that industrial production growth fell in June to 4.2% YoY from 4.5% in May, while retail sales increased in our view by 0.5% YoY versus a 0.6% decline in May, mainly thanks to favorable base effects.
At the same time we expect the decline in investment to deepen to 5.2% YoY in June from 4.1% in May, reflecting overall weakness in investment activity outside selected areas such as artificial intelligence, transport infrastructure and some high‑technology sectors.
On Tuesday, data on China’s foreign trade for June will also be released. We expect export growth to accelerate to 22.0% YoY in June from 19.4% in May and maintain high import momentum at 26.0% YoY versus 27.4%, which would translate into a trade surplus increase to $131.6 bn in June from $105.4 bn in May.
On Tuesday, CPI inflation data for the USA for June will also be released, which we believe fell to 3.8% YoY from 4.3% in May, mainly due to a correction in energy prices after an earlier strong rise linked to the Middle East conflict.
At the same time core inflation will remain relatively stubborn in our view – we expect core price increases of 0.3% MoM and a slight rise in its annual pace to 2.9% YoY from 2.8% in May.
So far, data do not confirm the presence of clear secondary effects of the energy shock, except for a few categories such as airline ticket prices, but the persistent elevated core inflation still limits the room for easing monetary policy by the Fed.
A decline in overall inflation to 3.8% YoY would mean, according to our forecast, that its local peak was reached in May, and in subsequent quarters price dynamics will shape a long‑term downward trend.
The materialisation of such a scenario would reduce market expectations for Fed rate hikes, support the zloty and push Polish bond yields lower. In this context, it will also be important to watch the Fed Chair K. Warsh’s semi‑annual address before Congress on Tuesday and Wednesday. We believe that in light of his statements at the Sintra symposium, signalling a weakening of inflation risk factors but simultaneously reinforcing the Fed’s determination to bring inflation to target and moving away from classic forward guidance towards a stronger data‑driven decision framework (see MAKROmap on 06.07.2026) and the Minutes published last week (see below), this address will not provide new information on US monetary policy prospects.
CPI Inflation Data in Poland
On Wednesday, final CPI inflation data for Poland for June will be released. We expect them to confirm the preliminary estimate from GUS, which states that inflation fell to 2.5% YoY from 3.1% in May. The decline in inflation was mainly due to lower food and fuel prices.
According to our estimates, core inflation fell in June to about 3.0% YoY from 3.1% in May, confirming limited inflationary pressure and the absence of clear second‑round effects.
