It is difficult to assess how long the ceasefire will hold, but if reports that the USA decided on this move due to a too rapid decline in weapon stocks are true, one can infer that the diplomatic offensive will last a bit longer – although moves towards signing another memorandum would be more convincing.
Nevertheless, investors are currently pleased – although strategically nothing has changed in the Strait of Hormuz (it remains effectively closed) – oil has surged stronger, allowing a reaction in riskier assets. In the FX space the dollar has retraced – EURUSD has slipped slightly above 1.14.
In the gold market we therefore see USDPLN falling below 3.78, and EURPLN around 4.31.
Market attention in the coming days will focus on the FED meeting on July 28‑29. The chances of a rate hike are already low (31% according to the CME FED Watch model), but markets will closely watch the statement that will most likely confirm expectations regarding the September move (currently above 90%) – Kevin Warsh has indeed abandoned forward guidance language, but investors only need a clear “bird” message stating no tolerance for elevated inflation.
Conclusion? The current reaction of the zloty may prove short‑term if the dollar gains strength in the second half of the week.
In the macro calendar we have no domestic releases today; only on Friday will the GUS provide estimates of preliminary July inflation.
Investors can, however, look today at the German Ifo index (at 10:00), which will impact EURUSD.
Daily EURPLN chart
Daily USDPLN chart
Technically, attention is drawn to the significance of support at EURPLN 4.3074, which essentially could close the space for a deeper decline in the short‑term perspective.
