HUNGARY: Orban Comments on Opposition Tax Proposals During Radio Interview

• ECB-dated OIS price 18bps of easing through June 2026, around 0.5bps more dovish than yesterday’s close. Pricing over the next few meetings is little changed though (~1.5bps of cuts priced through September, 4.5bps through October and 11.5bps through December).
• Following some volatility around the European open, Euribor futures have settled flat to +1.0 ticks through the blues.
• Eurozone final July HICP is due at 1000BST, with focus on the sub-component details and the ECB’s underlying inflation metrics. A reminder that core HICP was in line with the consensus at 2.29% Y/Y (vs 2.3% cons, 2.31% prior), with slightly softer services inflation offset by stronger core goods.
• ECB President Lagarde is scheduled to speak on a panel at 0830BST (has been pushed back from 0810BST initial). Remarks will be available on the ECB website.
• The main development since the ECB’s July decision has been the EU-US trade agreement, which includes a 15% baseline levy on European exports. While this has reduced near-term trade policy uncertainty, the level of tariffs is more onerous than assumed in the ECB’s baseline scenario.
• Otherwise, regional focus remains on tomorrow’s August flash PMIs.

Wide calls for Gilts given the divergence between Bund and Tnotes, also note that the Roll will now also start to distort the Calls, and these DO NOT take the UK CPI into account.

• Range 90.69/90.86, some will favour downside risks.

Estox 50: -0.57%, Dax: -0.70%, CAC: -0.18%, FTSE -0.10%, SMI -0.39%.