The zloty is gaining after the elections. What will the week bring?

Sunday's parliamentary elections in Poland have already made history thanks to the record-high turnout, which amounted to as much as 72,9%. Preliminary results indicate a change of power in Poland, which translates into both a significant strengthening of the zloty and significant increases on the Warsaw Stock Exchange. Globally, investors continue to closely monitor the situation in the Middle East, which may still complicate the situation in the Middle East crude oil chart.

Is the Polish stock exchange becoming more and more attractive?

The first market reaction to the results of the parliamentary elections in Poland is clear. In the morning, EURPLN fell back to around 4,47, while the dollar was traded at around PLN 4,25. The strengthening of the zloty is the result of a potential change of government in Poland and a probable improvement in relations between Warsaw and Brussels. However, the reaction of PLN is within the scope of a long-term upward trend, which is dictated by fundamental factors - primarily, systematically higher than in the euro area or the United States, inflation in Poland.

From the perspective of a global investor, the Polish stock exchange may seem more and more attractive. Although WIG20 includes only 8 state-owned companies, they account for as much as 55% of the entire index. A potential change of government may be perceived by foreign investors as an opportunity improving the quality of management of state giants, which should increase the attractiveness of the Polish trading floor. Nevertheless, it should be remembered that the economy is a network of connected vessels, and Poland is still treated as one of the emerging markets on which China has a strong influence.

Declines on the Chinese market

The situation in the Middle Kingdom is still far from ideal, but despite many attempts to stimulate the Chinese economy, the local market continues to decline. Poland's immediate surroundings are also important - there are many indications that the euro zone will experience a more or less severe recession. The possible escalation of the conflict in the Middle East will support oil prices on the market, which will probably translate into a renewed increase in inflationary pressure around the world.

In today's webinar:

• Investors react to the election results in Poland.
• What do they tell us? macroeconomic data?
• Will earnings season support buyers?

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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