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Leading Economic Indicators Pricing In Significant Deceleration in Activity in H2

POLAND
  • This morning, economic data showed that Poland GDP came in significantly below expectations in Q2, falling by 2.3% QoQ (vs. -0.7% exp.) and decelerating to 5.3% YoY.
  • However, we have been surprised by analysts’ optimism given the sharp tightening in financial conditions, which are currently pricing in a significant deceleration in the economic activity in the coming 6 to 12 months.
  • For instance, Poland 2Y10Y yield curve has been deeply inverted in the past two months, and is expecting the economy the plunge into a recession in H2.
  • The chart below shows that Poland 2Y10Y yield curve has strongly led the business cycle by 6 months in the past two decades.

Source: Bloomberg/MNI

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  • This morning, economic data showed that Poland GDP came in significantly below expectations in Q2, falling by 2.3% QoQ (vs. -0.7% exp.) and decelerating to 5.3% YoY.
  • However, we have been surprised by analysts’ optimism given the sharp tightening in financial conditions, which are currently pricing in a significant deceleration in the economic activity in the coming 6 to 12 months.
  • For instance, Poland 2Y10Y yield curve has been deeply inverted in the past two months, and is expecting the economy the plunge into a recession in H2.
  • The chart below shows that Poland 2Y10Y yield curve has strongly led the business cycle by 6 months in the past two decades.

Source: Bloomberg/MNI