In the country
Next week the European Commission will disburse Poland's fourth tranche of funds from the National Reconstruction Plan, amounting to 7.2 billion euros - PAP sources in the EU said on Wednesday. Poland plans to submit a request for another payment from the NRP, roughly 8 billion euros, in the second half of June.
From the world
In France, the consumer sentiment index was 82 points in May, down from 84 points the month before - the statistical institute Insee reported. US President Donald Trump declared on Wednesday in a cabinet meeting that the United States is not yet satisfied with the negotiated agreement with Iran.
He also expressed the belief that Tehran is eager to reach a deal. The US military carried out new attacks on an Iranian military facility on Wednesday that posed a threat to US forces and commercial shipping in the Strait of Hormuz - according to information from US officials.
Oil prices near crisis minimum
This week work continues on a peace agreement between Iran and the US, which aims to unlock the Strait of Hormuz among other things. According to both sides, most of the agreement is already agreed upon, although media reports that key critical issues, such as Iran's nuclear program, US sanctions on Iran, or possible control over the Strait of Hormuz, are unresolved.
Warnings from both sides simultaneously warn of the possibility of a hot conflict, which likely is part of the negotiations, but also highlights the fact that the prospect of normalizing the situation in the Persian Gulf remains uncertain.
Looking at oil price behavior shows that market participants, who may be many players with a fuller picture of the situation, have increasingly been refining a scenario of some form of agreement over the past week. The Brent oil price is currently close to the lower levels of the conflict period (March – May) set in the second half of April on the wave of the ceasefire taking effect.
For participants in global markets, the prospect of conflict is currently one of the key drivers of volatility. In the case of the interest rate market, a widening impasse means increased risk of higher inflation, and consequently higher expected interest rate paths.
This dependence is seen, among other things, in the strong correlation between oil prices and the yields of Polish benchmark bonds, including the 10‑year. By the end of the week doubts about a quick agreement have risen slightly. D. Trump said yesterday that the results of current negotiations are not yet satisfactory, and this morning reports emerged that the US carried out further defensive air attacks on Iranian targets this week.
At the same time Washington claims that it still considers the ceasefire to be in effect. The balance of oil prices over the crisis minimum is now more interesting.
EUR‑USD without breakthrough
Yesterday the main pair's rate rose above 1.1650 in the London session, but the day ended neutrally (about 1.1630) after American traders entered the market and US reports suggested a risk of a shift during the Iran agreement.
This morning this factor still supports the dollar. In the macro calendar today the April PCE inflation reading will attract attention.
Zloty and SPW still awaiting decisions on the Middle East
Over the past week both the zloty and domestic bonds strengthened with the refinement of scenarios of normalizing the situation in the Persian Gulf.
Reports from the last two days have raised some doubts in this regard and the strengthening of the zloty and debt has stalled, with even slight corrective tendencies appearing.
Yesterday EUR‑PLN rebounded from 4.23 – near the May minimum. Meanwhile the yield curve shifted 1‑2 basis points higher.
At 11:00 today the ESI business sentiment indicators will be published. The consensus for the euro zone is 92.6 versus 93 previously.
At 14:30 the data on the number of unemployment benefit claims in the US will be published. The consensus assumes 209 thousand.
At 14:30 the data on orders for goods without transport means in the US for April will be published. The consensus assumes 0.5% m/m seasonally adjusted.
At 14:30 the data on durable goods orders in the US for April will be published. The consensus assumes 4.0% 0.5% m/m seasonally adjusted.
At 14:30 the data on American incomes for April will be published. The consensus assumes 0.4% m/m seasonally adjusted.
At 14:30 the data on American spending for April will be published. The consensus assumes 0.5% m/m seasonally adjusted.
At 14:30 the data on PCE inflation in the US for April will be published. The consensus assumes PCE growth from 3.5% y/y to 3.8% y/y and core PCE from 3.2% y/y to 3.3% y/y.
At 16:00 the data on new home sales in the US for April will be published. The consensus assumes 682 thousand.
