CEEMEA OPEN: US Uni of Michigan Sentiment rises to a 5-month high

27 SEP 14:22GMT: The DYX fell to a 15-month low of 100.157 after PCE Price index met the f/c and came in at 0.1% m/m in Aug from 0.2% m/m prior, but eased less than expected to 2.2% y/y from 2.5% y/y prior, Core PCE Price index eased more than f/c to 0.1% m/m from 0.2% m/m prior (f/c 0.2% m/m), but met the f/c and rose to 2.7% y/y from 2.6% y/y prior (more here). Also on the data front, Uni of Mich sentiment rose more than expected to 70.1 in Sep from 69 prior (f/c 69.4) - a 5-mnth high, while 1yr inflation expectations remained steady at 2.7%. EUR/PLN is firmer from the European open this morning, rising from an intraday low of 4.2626 to a session peak of 4.2736, where it has since cooled to 4.2700 at writing, despite that latest dovish comments, NBP policymaker Kotecki has said that he hopes the board will begin lowering borrowing costs in early 2025 and that Governor Glapinski will not U-turn on his recently more dovish rhetoric (more here). On Monday (8GMT), Poland's inflation is expected to rise to 4.50% y/y in September form 4.30% y/y prior, while the NBP is expected to keep interest rates unchanged for a sixth straight meeting at 5.75% on Wednesday (preview here). Bank of America strategists expect the rand to to keep strengthening into 2025, “we maintain our view of ZAR strength into 2025 driven principally by our expectation of USD weakness as the labor market cools and the Fed has initiated its cutting cycle. However, in the short term, global backdrop as the market shifts focus to hard landing and trade war risks is likely to drive the rand weaker.” The currency has advanced 1.5% so far this week, a top-five performance among emerging-market peers, and is up almost 7% in 2024, with USD/ZAR falling to almost a 2-yr low of 17.0702 (more here). USD/TRY pair has pared the intraday high of 34.1970 to lie flat just under 34.1800. It's worth noting that Isbank CEO Aran has said in an interview with CNBC-e (via Bloomberg) that he expects the CBRT will lower borrowing costs by 250bps in November and that they may cut the One-week Repo Rate by 25% in 2025 (more here). Elsewhere, the Mexican central bank lowered borrowing costs for a second straight meeting by 25bps to 10.50% as inflation cools faster than expected and the economy heads for a third year of slower growth. In a statement that followed the decisions, the bank said that they expect the inflationary environment will allow further rate adjustments, highlighting a steady disinflation cycle due to a partial reversal in the supply shocks that have affected the non-core component and core inflation has continued decelerating (insight here).

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