HUNGARY: High Levels of Household Inflation Expectations Flagged as a Key Risk
Highlights from the minutes of the NBH's August rate-setting meeting:
- The MNB would comprehensively evaluate the effects of data and information incoming since June that could potentially affect the inflation path in its September forecast.
- Household inflation expectations – identified as a key risk factor in the June Inflation Report – remained significantly higher than the level being consistent with price stability. The anchoring of expectations was key to reaching price stability.
- The Council was unanimous in its view that special attention had to be paid to the development of the external balance and that the findings of the June forecast were to be reviewed in the September Inflation Report.
- The decision makers called attention to the fact that the stability of the foreign exchange market is of particular importance for achieving the inflation target and maintaining financial market stability.
- In the decision makers’ assessment, changing the forward guidance was not warranted.
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SPAIN T-BILL AUCTION PREVIEW: On offer tomorrow
Tesoro Publico has announced it will be looking to sell a combined E2.0-3.0bln of the following at its auction tomorrow, August 12:
- the 3-month Nov 7, 2025 letras
- the 9-month May 8, 2026 letras
US 10YR FUTURE TECHS: (U5) Holds Ground
- RES 4: 113-23 76.4% retracement of the Sep’24 - Jan’25 sell-off
- RES 3: 113-07 76.4% retracement of the Apr 7 - 11 sell-off
- RES 2: 112-23 High May 1
- RES 1: 112-15+ High Aug 5
- PRICE: 111-29 @ 12:45 BST Aug 11
- SUP 1: 110-19+/08+ Low Jul 24 / Low Jul 14 & 16
- SUP 2: 110-03 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 3: 109-28 Low Jun 6 and 11
- SUP 4: 109.25 Low May 27
Treasury futures remain strong on the back of the post-NFP rally - barring an erratic and quickly reversed intraday slip on Wednesday. Having cleared resistance into the bull trigger at 112-12+, the Jul 1 high, Treasuries have opened the May 1 high for direction at 112-23, a multi-month high. Clearance here opens retracement levels layered between 113-07 and 113-23. On the downside, key support is 110-08+, the Jul 14 and 16 low. First support lies at 110-19+, the Jul 24 low.
NOK: G10 Outperformance Persists Since Morning CPI Release
NOK outperformance against the G10 basket has persisted through the morning, helping EURNOK push through initial support at 11.9326 (23.6% retracement of the upleg off the late July low). This exposes the 20-day (11.8618) and 50-day (11.7945) EMAs on the downside, with key support and the bear trigger defined at the 11.7460 July 30 low.
- The slightly stronger-than-expected July inflation report set the tone for NOK this morning. Although CPI-ATE inflation was actually in line with Norges Bank’s June MPR projections at 3.1% Y/Y, measures of inflation momentum suggest underlying price pressures remain a little persistent.
- This should push back against the need for firmer guidance towards a September cut at Thursday’s Norges Bank decision.
- Brent crude and natural gas futures have inched higher through the morning, potentially providing background support to NOK. The energy complex is being dominated by speculation ahead of Friday's Trump-Putin meeting in Alaska.
- NOKSEK is now up 0.75% on the session, with SEK also pressured by subdued European equity performance. That brings the cross back above prior support at 0.9329 (June 26 low). Initial resistance is the August 7 high at 0.9454.
