CEE & CCA week ahead: Labour markets, confidence data and interest rates in focus
The desk positions itself bullishly on the Polish Zloty (PLN) ahead of key labour market and retail data due for release next week. Per the full note , Poland's August labour market data is expected to show wage growth stabilizing above 6% year-on-year despite broader economic headwinds, suggesting resilience in domestic consumption. Additionally, a recovery in the construction sector under the National Recovery Plan is projected to provide positive momentum. These factors could support a stronger PLN outlook against other regional currencies, contingent on the upcoming data validating growth expectations.
What the desk is arguing
The desk views the upcoming economic indicators as a pivotal moment for the PLN, with labor market reports and retail sales potentially influencing confidence in Poland's recovery trajectory. Per the full note , the expectation of wage growth remaining robust amid broader challenges in inflation could buoy domestic sentiment.
Additionally, the anticipated construction output recovery could indicate strengthened investment activity across the sectors, lending further support to the Zloty. The focus rests on whether consumer sentiment can withstand the pressures from the energy crisis and slowing wage growth.
Where it sits in our coverage
Our current PLN consensus target is 1.075 for December 2026, with notable forecasts such as: - jpmorgan: 1.10 - bofa: 1.04
The desk's bullish outlook aligns closely with jpmorgan, suggesting an optimism about the PLN that may diverge from the more cautious stance of bofa.
How other firms see it
Currently, firms like jpmorgan share a positive outlook on the PLN, reflecting confidence in Poland's economic indicators. Conversely, bofa presents a more bearish perspective, advocating caution.
The trajectory of USD/PLN may mirror broader regional sentiment, particularly in light of ECB policy discussions and underlying regional dynamics influencing trade flows.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Poland's August labor market data is expected to show wage growth stabilized above 6% YoY.
- 02An anticipated recovery in construction activity due to the National Recovery Plan may further support economic growth.
- 03The upcoming data releases will be critical in shaping sentiment towards the Polish Zloty.
- 04Expectations of contained domestic price pressures may sustain resilience in consumer demand.
Market implications
Traders should keep an eye on the 1.075 level for PLN as a potential pivot following the data releases. Stronger-than-expected labor market and retail figures could push the PLN to test resistance levels and alter positioning among institutional counterparts.
Risks to this view
A significant downturn in the upcoming labor or retail data could pivot sentiments, leading to a rapid reevaluation of the PLN's outlook. Additionally, any negative shocks from the broader CEE region, particularly energy price spikes, could undermine economic recovery narratives.
Articles CEE & CCA week ahead: Labour markets, confidence data and interest rates in focus Published 12:49 Czech Republic Poland Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Next week, Poland will release labour market, construction and retail sales data, while the Czech Republic publishes confidence indicators and Azerbaijan announces its latest monetary policy decision Adam Antoniak , David Havrlant and Dmitry Dolgin Warsaw, Poland Poland: Consumer demand and labour market trends in focus August labour market data will be released on Monday. In July, wage growth was boosted by one-off payments in some sectors (energy, forestry), and we estimate that earnings growth eased in August but probably remained above 6% year-on-year, supported by the ongoing recovery in industry and a favourable calendar effect. The general downward trend in wage growth is likely to continue in the coming months, and domestic price pressures remain contained even as headline CPI rises on the back of the energy shock.
The pace of the decline in enterprise sector employment was probably unchanged, remaining at 0.8% YoY. Monday also brings August construction output data, which disappointed significantly in July, posting an annual decline, but it is possible that there were delays in reporting completed stages of ongoing projects. Therefore, we expect solid annual growth in August, supported by projects financed under the National Recovery Plan (NRP) and the overall strength of fixed investment activity in the economy (up 8.4% YoY in 2Q26).
We believe that residential construction remains the only weak spot, as the overhang of unsold dwellings continues to weigh on construction activity. By contrast, civil engineering and specialised construction works were probably robust last month. The ongoing energy crisis and slowing wage growth are weighing on consumer spending, contributing to a gradual slowdown in private consumption (to below 3% YoY in 2Q26).
However, demand for durable goods remains relatively resilient. During the last two weeks of August, VAT on fuels was temporarily reduced from 23% to 8%, which probably boosted sales of petrol and diesel, as further price increases were widely expected in September. We estimate that the August reading of retail sales of goods grew by around 5% YoY.
Czech Republic: Consumer sentiment to stabilise as industry mood softens Wednesday brings the release of September's economic sentiment and confidence indicators. Consumer confidence has likely stabilised in September, following the previous notable drop. Solid real wage growth should still be able to hold consumer mood above its long-term average, though both may come under pressure at the turn of the year due to increasing consumer prices.
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