What else caught our eye:
- According to the MinLab estimate, the registered unemployment rate declined to 5.6% in September, indicative of the steepest monthly decline in the number of unemployed for this month since 2014. It is yet another sign that the labour market is robust after the pandemic.
- The Polish Constitutional Tribunal has declared the primacy of the Polish Constitution over EU laws, denying the European top court (CJEU) the right to interfere with the Polish judicial system. The verdict might (again) delay the approval process of the Polish Recovery Plan.
- New daily confirmed Covid-19 cases exceeded 2k this week and are the highest since May. Acc. to the health minister, despite rising new cases, the number of hospitalisations is much lower than a year ago and confirms that vaccinations (51% of population received at least 1 jab) protect the public health system from getting overwhelmed. Thus, the government does not plan any new restrictions and rules out school closures.
- High volatility on the local FX market continues. After a tough previous week, EURPLN strengthened in reaction to higher NBP rates (to 4.55 compared to 4.64 a week before) but then dovish comments of the NBP Governor and the verdict of the Polish Constitutional Tribunal pushed the rate up again, above 4.60.
The week ahead:
- Final CPI inflation data for September (5.8% acc. to the flash release) will confirm that the price pressure is broad-based with rise in core inflation.
- We expect the current account deficit in August (PKOe: EUR -1.18bn) was accompanied by exports under pressure of supply shortages and imports boosted by rising energy commodity prices in August. Shrinking 12-month C/A surplus leaves less space for accommodative monetary policy in Poland (see chart of the week).