Banks Under Pressure Again as Investors Favor Trading Companies

Poland's stock market is experiencing a strong bull run, with key indices like WIG, WIG20, and mWIG40 setting new records. The WIG20, in particular, is nearing an all-time high not seen in nearly two decades. If current momentum continues and external conditions remain favorable, analysts believe the index could challenge its historical peak before the end of July.

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If the current dynamics are maintained and the external environment remains favorable, bulls may attempt to attack the all-time record before the end of July.

However, this bullish performance on the stock exchange contrasts sharply with the currency market. The Polish złoty has been depreciating against both the euro and the US dollar in recent weeks. The euro has climbed to multi-month highs against the złoty, while the dollar has reached its strongest point in over a year. While the złoty's decline has slowed recently, with some technical indicators suggesting a potential rebound, the divergence between the stock market and currency market remains a significant point of concern.

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The divergence between the currency market and the stock market remains exceptionally large and is not a daily occurrence. The key question is: which market segment will ultimately adjust to the other? Are bonds and the currency market right, or will stocks set the direction for the coming months?

This unusual situation raises a critical question: which market segment will ultimately adjust to the other? Analysts are divided on whether the currency and bond markets are signaling a future downturn for stocks, or if equities are accurately forecasting the direction for the coming months. Some analysts maintain that the dollar's strengthening trend is likely to continue, citing technical indicators and historical patterns related to presidential election cycles. The possibility of stocks moving against these statistical trends would require a significant negation of current signals.

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The scenario of a strengthening dollar is still current. In mid-June, the dollar index broke above a series of peaks from the previous 12 months. The subsequent pullback still does not go beyond the framework of a pullback and, at the moment, does not negate the pattern favorable for further strengthening of the US currency.