Charts and Market Updates June 30, 2020

Charts and Market Updates June 30, 2020

EURHUF

Germany and France are having troubles with their peers from the North and the East. The Frugal Four group are refusing to increase their contribution to the coronavirus aid relief. The bloc’s budget was only at €500 billion compared to the US’ $6 trillion stimulus. Meanwhile, Hungary of the Visegrad group is defying the bloc’s leaders by tightening its relationship with Turkey and China. Recently, Hungary and Turkey agreed to undertake 22 projects worth $648.5 million. In 2019, their trades reached $2.7 billion. Hungary might also open the gates of Europe for China’s Huawei in the 5G war. This 2020, annual GDP of Hungary is expected to decline by 6.0% followed by a recovery in 2021 at 5.0%. This figure for the fiscal year is below the EU’s average. Germany and France, on the other hand, are projected to decline by up to 10.0%. Expectations for 2021 with these economic powerhouses were also somewhat weak compared to some EU countries.Charts

USDDKK

The US government recorded a massive increase in home sales for the month of May in yesterday’s report. Figures jumped by 44.3%, quickly overshadowing the consecutive declines of 20.8% and 21.8% for the month of March and April, respectively. However, analysts warned that this was just an effect of the $6 trillion stimulus by the US government and the Federal Reserve. They also questioned America’s sustainability of the coronavirus which continues to disrupt business operations. Meanwhile, analysts pointed out that Europe might have experienced the peak of the economic implications of the deadly virus. Denmark’s GDP QoQ went down by 2.0% and the unemployment rate hit 5.4%. However, the Eurozone’s consumer confidence report showed that people in Europe are beginning to adapt to the new normal and are starting to spend. And unlike the unlimited quantitative easing (QE) in the US, the EU’s budget was only €500 billion.

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USDPLN

Poland has proven that it is a country to watch for as its economy remains resilient amid the coronavirus pandemic. Fitch Ratings agency projected Poland’s 2020 GDP to contract by 3.2% but will come back strong in 2021 at 4.5% expansion. Also, the contraction was below the bloc’s average expected declines just like with Hungary’s 2020 GDP figure. With this resiliency, Poland might become the next destination on foreign direct investments (FDI). Aside from this, the country’s labour market index just went up by 1.0% in June despite the global lockdown. Also, the recent win of President Andrzej Duda means that the current political and economic structure in Poland will continue in the years to come. Duda came first in the poll with a strong 43.5% support. His rival, right-wing and Warsaw liberal mayor Rafał Trzaskowski came second with 30.5%. To investors, this translates to continued economic progress in Poland.

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EURPLN

Poland’s economy seems not bothered with the current global crisis. The country’s consumer price index (CPI) report was standing strong at 3.3% in today’s report. Meanwhile, the three (3) largest economies in the European Union were mixed when it comes to this report. Also, today, June 30, Germany, France, and Italy reported CPI along with the report from the EU. Figures were at 0.6%, -0.1%, and 0.1%, respectively. Meanwhile, the entire bloc recorded a consumer price index at 0.3%. This report measures the change in the price of basic goods in a specific country and is an important component with the overall performance of the economy. Logically, a higher CPI means that there is a strong demand for these products. It also reflects the spending capacity of each individual. The resiliency of Poland and its strong labour market during this pandemic is expected to pay off as it is now seen as a possible nearshore investment hub for the CEE.

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