HUNGARY: Headline Inflation Expected to Return to Top-End of NBH Target Range
Annual price growth is expected to slow from +4.7% Y/Y in March to around +4.0% in April, which would place the headline inflation rate at the top end of the central bank’s +3.0 +/- 1ppt target range. Lower fuel prices and a more pronounced impact of government measures on food and services prices are expected to drive the bulk of the decline. The data will be published at 07:30BST/08:30CET tomorrow morning.
- JP Morgan say inflation likely dropped sharply from 4.7% Y/Y to 4.1% in April. Most categories likely contributed to the decline, but food and fuel were the determinant drivers. They estimate that food inflation fell from 6.2% Y/Y to 5.5%, whereas fuel CPI likely tumbled from -2.5% Y/Y to -8.2% on the back of lower Brent prices. JPM forecast core CPI (ex. all food) to have fallen to 5% Y/Y, from 5.3%, driven by services mainly.
- Goldman Sachs expect headline CPI to return to the NBH’s target range, falling from +4.7% Y/Y to +3.8%. The main factor driving the decline will likely be the government’s recently introduced profit margin cap on certain food items, which they expect to have a sizeable disinflationary impact. Beyond this, Goldman Sachs also expect lower fuel prices, pass-through from previous HUF strength and base effects to push inflation lower.
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SCANDIS: Stabilisation In Risk Sentiment Helps NOK Regain Some Poise
NOK has regained some poise today, with a more stable risk backdrop contributing to a partial unwind of the prior three session’s weakness. EURNOK is down 1.00% to ~11.8600, with the cross now no longer screening as oversold on a 14-day RSI basis. Initial support is the trendline drawn from the August 2024 high (11.7161 today), which had provided solid resistance prior to last Friday’s 3.3% rally.
- Earlier this morning, Norges Bank Governor Bache provided fairly balanced commentary at a Finance Norway conference.
- Her prepared remarks did not suggest the March MPR rate path was out of date following the US tariff announcements, but stressed Norges Bank is “closely monitoring” market developments as always.
- In comments to reporters following the speech, she said that “we are not giving any new monetary policy signals at this time”.
- NOKSEK is up 0.5% to ~0.9215, after failing to close below support at 0.9147 yesterday (76.4% retracement of the March 2020- March 2022 bull leg). Initial resistance is yesterday’s high at 0.9353, but rallies short of the 20-day EMA at 0.9479 will be considered corrective.
- Riksbank speakers Bunge and Thedeen also avoided explicit policy signals in remarks today. However, Thedeen noted that the US tariffs were higher than currently assumed in Riksbank forecasts, and that the central bank is ready to act “forcefully” if needed.
TARIFFS: USTR Greer Testimony To Senate Finance Ctte Underway Shortly
United States Trade Representative Jamieson Greer is shortly due to deliver testimony on the Trump administration’s trade agenda to the Senate Finance Committee. LIVESTREAM Greer will deliver a second testimony to the House Ways and Means Committee tomorrow.
- His is the first Congressional appearance by a relevant administration official since Trump’s April 2 tariff announcement. He is likely to get a robust grilling from Democrats and Republicans alike who want clarity on Trump’s strategy.
- According to prepared remarks, Greer plans to argue that Trump’s tariff strategy is “already bearing fruit," highlighting that, "Nearly 50 countries have approached me to discuss the president’s new policy and explore how to achieve reciprocity,” per Politico.
- Politico notes: “[Finance Committee] Ranking member Ron Wyden [D-OR] plans to slam the administration for offering “no clear message” about how Trump chose his tariff targets and how long he plans to keep them up..." Sen. Bernie Sanders’ message: The blanket tariffs are “illegal and another step toward authoritarianism.””
- Note: President Trump issued a memo yesterday promising to veto legislation introduced by Senators Maria Cantwell (D-WA) and Chuck Grassley (R-IA) that would rein in the president's authority to impose tariffs unilaterally, should it make it to his desk. Both Grassley and Cantwell sit on the panel.
MNI: CANADA MAR IVEY PURCHASING MANAGERS INDEX 51.3 SA
- CANADA MAR IVEY PURCHASING MANAGERS INDEX 51.3 SA
