POLAND: October Inflation Undershoots Expectations

• Eurozone HICP came in at a little below the MNI tracking of 2.3% with 2-way risks at 2.23%Y/Y, but broadly in line with the market consensus.
• Core and services both rounded down to consensus expectations, although core at 2.35%Y/Y was almost 2.4%.
• It appears as though FAT (food, alcohol and tobacco) is the only notably surprise, coming in softer than expected at 3.04%Y/Y (down from 3.19%Y/Y where it was expected to remain).
• No substantial market reaction, given that the data was broadly in line with expectations.

Swiss (real) retail sales were rather weak in August on a sequential comparison, at -0.2% M/M.

• Looking at the drivers of the release shows that weakness was centred in the "remaining" category (which contains a lot of durable goods, table below). The August data was the first incorporating the 39% US tariffs levied on Swiss goods. The question is if this filtered through to consumer scepticism here already.
• However, on a broader 3-month moving average of the Y/Y measure, Swiss retail sales continue to grow around their long term average rate, at a current 1.5% (1.6% July).
• This means the big picture is that the Swiss consumer overall continues to screen healthy. However, we watch for potential signs of a cooling of the propensity to consume going forward.

• NTMA has confirmed that it will hold one auction in Q4-25, on Thursday 9 October. Details will be confirmed on Monday 6 October.
• We had pencilled in 0-1 auctions, but think that the market was looking for no more auctions this year given that the NTMA did not hold any auctions in Q4 in each of 2022, 2023 and 2024 after reaching the bottom of the funding target range.