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Poland is now more optimistic about how its economy would shrink by the end of the year. According to global rating agency Standard & Poor, the government’s quick response and implementation for fiscal and monetary support earlier this year helped prevent a larger drop in gross domestic product. From its previous forecast of a 4.0 percent decline, markets now expect the figure to shrink by 3.4 percent, instead. The report dated September 29 also claimed that the Polish economy should rebound by 4.5 percent in 2021. Meanwhile, the eurozone’s consumer inflation isn’t looking as well as the market thought it would – prices on goods and services decreased in the bloc dropped year-over-year on September to -0.3% as major currencies attempt to recover from resurges around major economies like Italy and Germany. Euro currency investors expected the figure to retain last year’s -0.2% record.
Sweden’s GDP outlook was recently revised to shrink less than initial forecasts. The National Institute of Economic Research said that instead of its August estimates of a 4.8 percent decline in gross domestic product by the end of the year, the figure is expected to drop by 3.4 percent by the end of the year, instead. Although, Sweden also reported its highest fresh infections on Thursday at 752, which was its first spike since the number has only been gradually increasing for the past few weeks. Meanwhile, Italy had just reported a worse-than-expected GDP both on a quarterly and a yearly comparison. Investors expected its second-quarter GDP to retain its first-quarter levels of -12.4 percent, but had instead declined to -12.8 percent. Against September 2019, it decreased from -17.3 percent to -17.7 percent, lower than expectations. Since June, said country also went through one of its largest daily increase of coronavirus at 2,000 for the first time.
Central European stocks and currencies are projected to weaken after the US President Donald Trump announced that he tested positive for the coronavirus. Investors are projected to drive away from central European stocks and currencies, much like the euro over the uncertainty of its future before the presidential election in November. Both the Czech Republic and Italy (a major economy in the eurozone) had seen record highs in new daily coronavirus counts this week, but it looks like the overall eurozone economy will largely drive the pair. That said, the EU’s consumer price index was much lower than originally anticipated. When compared to September 2019, the figure had fallen to -0.3 percent against -0.2 percent for this year. This, alongside Italy’s unforeseen, worse-than-expected gross domestic product drop in the second quarter will push the euro-koruna pair back into its previous resistance level to a bearish market.
It’s going to be a quiet day for Hungarian economic indicators today, but food news came in as Turkey and Hungary announced that they seek to boost bilateral trade. Turkey is expected to invest in Hungary by over $2.4 billion as it pursues its promise to be among the world’s 10 largest economies, which could help pull the greenback down to familiar resistance and support levels. Moreover, several payrolls figures in the United States were announced earlier today. The results are mixed. Nonfarm Payrolls had plummeted in September from 1,489 thousand to a whopping 661 thousand, which doesn’t even include the thousands just furloughed by airlines. The figure disappointed markets, because Main Street expected the figure to have fallen to 859 thousand instead. Other figures like the decline in Labor Force Participation (61.4% from 61.7%) and Average Hourly Earnings (rose by 4.7% against 4.8% expectations) will also pull the USD down.