Today there are no major data releases, although in the country one can pay attention to the economic outlook indicators from GUS. Abroad the decision of the Turkish central bank is expected to remain unchanged.
The US-Iran ceasefire was extended until the end of peace talks, announced Donald Trump overnight. The president added that the US would continue to block Iranian ports. The Iranian Revolutionary Guard announced that if fighting resumes, it will strike oil installations in the Persian Gulf states.
After two snow‑ and frost‑heavy months of the year, but weak in terms of economic activity, we waited for a decent rebound in March, breaking market expectations and our estimates. Industrial production rose 9.4% YoY, the fastest in 3.5 years, construction and assembly production increased 0.4% YoY and 37% MoM. Housing market activity also looked good in March, as did wage growth in the corporate sector (accelerating to 6.6% YoY, while the market assumed 6.3% YoY).
Employment surprised to the downside, falling 0.9% YoY. PPI inflation reacted strongly to the sharp rise in global energy commodity prices, moving to -0.8% YoY from -2.0% YoY in February. March data suggest that GDP growth could have stayed close to 4% YoY in Q1. We wrote more about yesterday’s data in the Comment.
US data were better than expected – both March retail sales and ongoing home sales surprised upward.
Additionally, February data estimates were raised. Meanwhile the German ZEW index in April was clearly weaker than forecasts – both the expectations and current indices failed.
Kevin Warsh, the candidate for head of the US Federal Reserve, was questioned by members of the Senate Banking Committee.
During the hearing, Warsh announced, among other things, that as Fed chair he would maintain independence from President Donald Trump (who in his statements expressed hope that the new Fed head would bring about a rapid rate cut).
To assume the office, Warsh must be recommended by the Banking Committee, but the recommendation deadline is currently uncertain.
Republican Senator Thom Tillis, sitting on the Committee, announced that he would block the nomination until the Department of Justice withdraws its investigation into former Fed head Jerome Powell.
Yesterday the zloty strengthened
EURPLN fell from 4.23 at the start of the session to 4.224 by the end of the day, and the domestic currency performed favorably against the region, where both the Czech koruna and the Hungarian forint recorded slight weakening.
On Tuesday the interest rate market was fairly stable, at least compared to a few earlier days. The yield curve and the IRS curve moved slightly upward, by 4–5 points, and this move was in line with the situation in base markets.
