Yesterday, the markets’ attention was again more recession than inflation due to weak data on the condition of the US economy. Stock indices in Europe and the US recorded declines.

The S & P500 index recorded its worst first half since 1962.Growing fears of recession significantly limited market expectations of interest rate hikes. As a result, the swap curves in the core markets clearly decreased (the 2-year swap for the EUR fell below 1.40% and is already over 60bp below the peak in the first part of June) and bond yields (Bunds across the curve by as much as 20bp, and Treasuries along the entire curve below 3%). Oil prices fell from 113 to 108 USD / barrel. The EURUSD was relatively stable (the dollar was helped by rising risk aversion, but the reduction in expectations as to the scale of the Fed’s rate hikes). The zloty dealt unexpectedly well with risk aversion, but only until information appeared that, according to the EU commissioner V. Jourova, President A. Duda’s law did not constitute one of the „milestones”, which is necessary, for Poland to receive funds under the KPO. As a result, EURPLN started to behave again like EURHUF, not EURCZK, and rose above 4.70. Increasingly stronger concerns about a recession also concern the domestic economy, so also in the domestic market the expectations of NBP interest rate hikes continued to be reduced. The PLN swap curve in the 5-year segment declined to 6.85%, over 100bp below the peak from over a week ago. Yields of 10-year domestic bonds fell below 7% again. Today the markets can recall inflation. The focus will be on flash HICP for the euro zone for June, and flash CPI for June in the country. There will also be other data. Increasingly stronger concerns about a recession also concern the domestic economy, so also in the domestic market the expectations of NBP interest rate hikes continued to be reduced. The PLN swap curve in the 5-year segment declined to 6.85%, over 100bp below the peak from over a week ago. Yields of 10-year domestic bonds fell below 7% again. Today the markets can recall inflation. The focus will be on flash HICP for the euro zone for June, and flash CPI for June in the country. There will also be other data.