HUNGARY: For Min-EU Sanctions 'Failure'; Trump-Putin Summit Prep 'In Full Swing'
Foreign Minister Peter Szijjarto posts on X: "Preparations in full swing—just spoke with Yuri Ushakov, Foreign Policy Advisor to President Putin." This comes after Szijjarto held talks with Russian Foreign Minister Sergey Lavrov and US Deputy Secretary of State Christopher Landau regarding preparations for a summit between US President Donald Trump and Russia's Vladimir Putin to take place in Budapest in the near future.
- Reuters also reports comments from Szijjarto, claiming that the sanctions policy of the European Union is a "failure". Despite Szijjarto's criticism, Hungary is not expected to impede the latest round of sanctions on Russia, with the gov'ts of Slovakia and Austria providing the obstacles to agreement at next week's European Council summit.
- Szijjarto adds that if the preparatory meeting between Lavrov and US Secretary of State Marco Rubio takes place next week, "then we can talk about dates for a Trump-Putin meeting".
- Says "We will ensure Putin can enter Hungary and we will respectfully receive him". Hungary is in the process of withdrawing from the International Criminal Court, meaning that Hungarian police will not have to detain Putin due to his outstanding ICC arrest warrant.
- The hosting of the Putin-Trump summit may provide PM Viktor Orban's gov't a boost domestically as he faces a difficult re-election test in spring 2026.
- However, the summit will further damage already-strained relations with the EU. Remains to be seen whether Brussels can or will mete out any punishment against Budapest for its hosting of Putin.
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GOLD: Edging Away From All-Time Highs Into FOMC, Bullish Trend Intact
Gold pulls back after registering a fresh all-time high above $3,700/oz on Tuesday, spot last $3,665/oz.
- The bullish technical trend remains intact, with initial support located at the September 11 low ($3,614.0/oz).
- The move feels like a reduction of exposure ahead of this evening’s FOMC decision (our full preview of that event can be found here), with the bid away from Asia-Pac lows in the broader USD providing some modest headwinds.
- Central bank demand, a softer greenback and increased worry surrounding Fed independence have provided the bulk of the tailwinds for the yellow metal in recent months.
- Deutsche Bank believe that “the FX and rates environment remain conducive to further upside, while positioning indicators are not stretched. Although gold has screened as rich versus fair value, we think much of this is due to the strength of official demand, which we expect to persist.” As a result, they have raised their gold forecast for ’26 to an average of $4,000/oz from $3,700/oz previously.
EUROZONE DATA: EZ Aug Final HICP Unrounded
- Headline 2.04% (2.05% flash, 2.04% prior)
- FAT 3.19% (3.21% flash, 3.25% prior)
- NEIG 0.78% (0.78% flash, 0.75% prior)
- Energy -1.97% (-1.89% flash, -2.39% prior)
- Services 3.10% (3.10% flash, 3.15% prior)
- Core 2.27% (2.27% flash, 2.31% prior)
JAPAN: LDP Signs Off On Minimal Campaign Ahead Of 4 Oct Leadership Election
The Presidential Election Management Committee of the governing conservative Liberal Democratic Party (LDP) met earlier on 17 Sep to sign off on plans for a truncated election hustings campaign. With the LDP leadership election to be formally called on 22 Sep, and held 12 days later on 4 Oct, the Committee has decided that candidates will speak at just three regional events in the Tokyo, Aichi, and Osaka prefectures on 24 Sep, 26 Sep, and 2 Oct respectively. In the 2024 LDP leadership contest eight in-person events were held.
- Political betting markets show Agriculture Minister Shinjiro Koizumi as favourite to take over from outgoing PM Shigeru Ishiba. Polymarket data shows Koizumi with a 60% implied probability of victory, compared to 34% for former Economic Security Minister Sanae Takaichi. Former Chief Cabinet Secretary Yoshimasa Hayashi trails in a distant third place with 5.3%.
- One of the key issues for LDP members and lawmakers in the election is which candidate can win back conservative voters who have deserted the LDP in favour of the right-wing Sanseito party.
- Koizumi, viewed as more liberal than Takaichi, may have seen his chances improved by endorsement of Finance Minister Katsunobu Kato. Kato was a close ally of the late PM Shinzo Abe, and the prominent conservative becoming Koizumi's campaign chief could win round support from those wavering following Koizumi's poor debate performances in the 2024 contest, which scuppered his campaign.
Chart 1. Political Betting Market Implied Probability of becoming next Japanese PM, %
Source: Polymarket
