HUNGARY: Orban Speaks in Interview Following Visit to Kyiv
Jul-04 06:50
- In an interview to Swiss daily Weltwoche yesterday, Prime Minister Viktor Orban said that during his visit to Kyiv he had not aimed to convince President Volodymyr Zelensky but "gauge the limits of Kyiv's stance regarding the peace process". During the talks, Orban said he had aimed to leave behind "the not too flourishing ties" of recent times between the two countries and concentrate on the future.
- Bloomberg reported earlier in the week that officials from Marine Le Pen’s movement were in advanced talks with other far-right groups in the European Parliament that could see her party abandon its current political family to join forces with Hungary’s Viktor Orban. Today, parties are set to continue talks.
- There are no major data releases scheduled for today. Looking ahead, industrial production (Est: -2.1% y/y; Prior: -2.4%) and retail sales data (Est: +4.0% y/y; Prior: +3.2%) as well as preliminary trade balance figures for May will cross tomorrow morning.
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STIR: Euribor Futures Off Lows, 61bps Of ECB Cuts Priced Through ‘24
Jun-04 06:45
Euribor futures are -1.5 to +0.5 ticks through the blues, moving away from Asia lows alongside Bunds.
- Following yesterday’s modest dovish repricing, ECB-dated OIS contracts show 61bps of cuts through the end of 2024.
- A cut come the end of this week’s meeting remains ~95% discounted, while the second full 25bp cut is almost fully priced through the October meeting (48bps showing).
- Today’s regional calendar includes unemployment data from Spain and Germany, though broader market focus will be on the US data this afternoon.
- We released our preview of this week’s ECB decision on Monday. See here.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jun-24 | 3.673 | -24.1 |
| Jul-24 | 3.646 | -26.7 |
| Sep-24 | 3.490 | -42.3 |
| Oct-24 | 3.434 | -47.9 |
| Dec-24 | 3.299 | -61.4 |
SWITZERLAND DATA: Core Inflation Softer Than Expected
Jun-04 06:42
Swiss CPI inflation printed in line with consensus at 1.390% Y/Y in May (vs 1.4% cons and prior), and 0.273% M/M (vs 0.3% cons and prior). Core CPI came in lower at 1.155% Y/Y (vs 1.3% cons; 1.2% prior) and 0.214% M/M. The upside risks to the Q2 SNB inflation forecast flagged by President Jordan have not yet materialized.
- For the Y/Y headline rate, this markes a stall after last month's increase. Core inflation was 0.1pp lower than consensus but almost rounded down to 0.2pp lower.
- Re the categories in focus, housing realized its expected uptick, with the housing and energy category coming in at +3.8% Y/Y (vs +3.3% April), driven by an increase in housing rental prices (3.4% vs 2.8% April).
- Imported inflation, however, partly reversed its April increase, coming in at -0.6% Y/Y (vs -0.4% Apr; -1.3% Mar).
- The print might marginally increase the likelihood of an SNB cut in its meeting later this month.
MNI, SECO
CHF: Swissy Reverses Early Gains As Headline CPI Matches Market & SNB Forecasts
Jun-04 06:39
EUR/CHF and USD/CHF are now a little higher on the day after headline Swiss CPI data matches expectations, holding steady in May. Meanwhile, the core Y/Y reading was also steady, despite survey expectations for 0.1ppt uptick.
- The CHF now trades in the middle of the G10 pack after outperforming peers ahead of the data, as participants were wary of the release following recent SNB rhetoric.
- A reminder that SNB President Jordan had flagged small upside risks to the SNB’s +1.4% Q2 CPI forecast. That didn’t emerge in today’s reading, explaining the move in CHF, although June’s data is still to come further down the road.
- Yesterday’s low in EUR/CHF held during the early CHF rally.
