IRELAND: Budget 2026 Set To Be Unveiled On 7 Oct Amid US Tariff Uncertainty
Aug-14 15:56
More reports are emerging claiming that the 2026 budget will be presented on 7 October, with a major focus on the response to the impact of US tariffs on the Irish economy. RTE first reported speculation of the 7 Oct date late on 13 Aug, with other outlets now reporting the same date.
- RTE notes "Budget 2026 comes against the backdrop of 15% tariffs on goods exported to the US, and threats by US President Donald Trump of even higher tariffs on pharmaceuticals. Last month, Minister for Finance Paschal Donohoe and Minister for Public Expenditure and Reform Jack Chambers laid out a package worth €9.4bn, but the Summer Economic Statement came before the announcement of the 15% tariff rate."
- The Irish Times notes that when announcing the SES, "...the Coalition warned it may have to “recalibrate” its strategy, reducing the size of the overall package, if there is a “deterioration in the tariff landscape” over the coming months."
- In mid-July, Chambers confirmed that there would not be any one-off measures intended to ease cost of living pressures, saying that the gov't wanted and fiscal decisions to be "sustainable with global uncertainty".
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US DATA: Regional Fed CPI Metrics Stabilizing Above Target
Jul-15 15:46
- Regional Fed CPI metrics support the earlier notion that core CPI was weighed down by some large items, such as used cars -0.7% on the core goods side and lodging away from home -2.9% on the core services side. See our bullet on the acceleration in median core goods inflation at 0915ET for an example of underlying pressures building.
- Core CPI inflation stood at 0.23% M/M in June after 0.13% in May. In comparison, across the entire CPI basket the Cleveland Fed median lifted from 0.22% to 0.33% M/M (back to Mar/Apr rates) and the 16% trimmed mean accelerated from 0.18% to 0.32% M/M (fastest since Jan 2025).
- There’s a similar story in the Atlanta Fed’s sticky CPI series, with ex-shelter measures on both a headline and core basis accelerating to 0.40% M/M for their fastest since January.
- Taking a step back, Y/Y rates appear to have bottomed in the spring, at least for now, at levels above pre-pandemic averages.
- The Cleveland Fed median increased to 3.6% Y/Y in June after three months averaging 3.47% in a tight range and the trimmed mean increased to 3.17% having touched 2.97% in April. The Atlanta Fed’s sticky core CPI ex shelter series meanwhile increased to 2.46% Y/Y to continue an acceleration from 2.09% in April – see charts.
BONDS: Early EGB Outperformance Sticks, But Futures Follow USTs Lower Post CPI
Jul-15 15:46
Major EGB futures continue to follow TYs lower post-US CPI, with Bunds now just +14 ticks on the session at 129.32, off earlier highs of 129.83. However, EGBs continue to outperform Gilts and USTs intraday.
- Resistance at the 20-day EMA (130.06) was untested during this morning’s Bund rally, which kept a bearish technical theme intact. A reminder that there wasn’t much in the way of headline flow to explain the early strength.
- Initial support to monitor in Bunds remains the July 14 low at 129.08 Clearance of this level would expose the bear trigger at 128.97, the May 14 low.
- OAT futures are +21 ticks at 122.53, with PM Bayrou’s 2026 budget outline not promoting any meaningful divergence from Bunds. Notably, far-right RN leader Bardella suggested a censure motion was likely if Bayrou was to follow through with the removal of two public holidays.
- Gilt futures are off session lows, but remain -27 ticks at 91.56. UK June inflation headlines tomorrow’s calendar, with labour market data also due on Thursday. A reminder that Chancellor Reeves and Governor Bailey speak at Mansion House later this evening. See our preview here for more.
US TSY FUTURES: BLOCK: Sep'25 2Y Buy
Jul-15 15:39
- +7,000 TUU5 103-17, buy through 103-16.88 post time offer at 1131:00ET, DV01 $270,200.
- The 2Y contract trades 103-16.88 last (-3.75)
