EM CEEMEA CREDIT: HUNGARY: Ratings Risks Mount as Hungary Lifts Deficit Targets
[MNI Macro]
Although markets and economists already had a more pessimistic view of Hungary’s fiscal situation compared to the official government forecasts, the formal revision of the deficit targets is notable given that it comes just ahead of key ratings updates from Moody’s (November 28) and Fitch (Dec 5), with the sell-off in the HUF clearly indicative of investor unease.
• The target for 2025 was raised to 5% of GDP from a previous 4.1%, while the target for 2026 was also raised to 5% compared to a forecast of 3.7% included in next year's budget. The National Economy Ministry stated that FX bonds to be issued at the start of 2026 and higher banking taxes would fund the shortfall – and the latter has weighed heavily on local lenders (OTP: -2.5%; Granit Bank: -4%). While off its worst levels of the day, the Hungarian forint is still the worst performing currency across CEEMEA (EURHUF: +0.4%).
• For his part, National Economy Minister Marton Nagy stressed that he does not foresee any further risk to next year's deficit and that credit rating agencies will not change their stance due to new fiscal measures, as they had already anticipated a deficit of around 5% next year. In an interview with MNI last week, a senior government official said Budapest is engaged in “regular and substantive” exchanges with ratings agencies with no significant rating developments expected before April’s election
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US: Trump Oval Office Announcement Underway Shortly
US President Donald Trump is shortly due to deliver an announcement in the White House Oval Office. LIVESTREAM The announcement is expected to relate to drug pricing and could follow a similar template to a recent pledge from Pfizer.
- The announcement will be Trump's first press remarks since a market-moving Truth Social statement earlier today in which Trump suggested calling off a meeting with Chinese President Xi Jinping and raising tariffs on China in response to new export controls from Beijing on rare earths. See earlier bullets here and here.
RATINGS: Moody's Completes Periodic Review Of Belgium, No Rating Action
No ratings actions for Belgium from Moody's, which is quoted in a press release on Bloomberg: "Moody's Ratings (Moody's) has completed a periodic review of the ratings of Belgium and other ratings that are associated with this issuer. The review was conducted through a rating committee held on 2 October 2025 in which we reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), and recent developments. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future."
- There had been some speculation there could be a ratings action - MNI wrote Thursday: "* Moody's on Belgium (Current rating Aa3, Outlook Negative): We expect Moody's to maintain their current stance in the absence of 2026 budget details."
MACRO ANALYSIS: US Macro Week Ahead: No CPI, But Plenty Of Pre-Blackout FedSpeak
Below is the week’s data schedule, with MNI’s annotation of whether or not data will be postponed.
- As we went to press, the Fed announced that next week's Industrial Production data will be postponed (was due to be published next Friday Oct 17) as the data “incorporate a range of data from other government agencies, the publication of which has been delayed as a result of the federal government shutdown.”
- We won’t be getting September CPI as scheduled on Oct 15, but at least the BLS announced it will publish the data on Oct 24.
- As such next week we’ll be looking at some under-covered data points, including the Redbook weekly and Chicago Fed’s CARTS retail sales data (in lieu of the Census Bureau retail sales report), with a little more focus than usual on regional Fed manufacturing indices (NY, Philadelphia).
- Once again, the dearth of tier-one data leaves Fed commentary in focus ahead of the pre-FOMC blackout period: highlights for us are Philadelphia Fed President Paulson making her first comments on monetary policy on Monday since being appointed in the summer, while as always Chair Powell bears watching on Tuesday (we also hear from Bowman, Waller, Collins, Miran, Schmid, and Musalem).
- Additionally we get the latest Beige Book which was already key given the FOMC was already increasingly focused on anecdotal information as it attempts to navigate murky economic waters.
