Hungary to find out this week how close it is to adopting euro

May 22, 2018, 8:50 am  english version Hungarian version  
The National Bank of Hungary (MNB) has a policy meeting scheduled for this short week, while the European Central Bank (ECB) is set to release its Convergence Report that will show how close Hungary is to meeting euro area membership criteria. The U.S. Federal Reserve and the ECB are both going to publish the minutes of their latest respective policy meetings, and preliminary PMI data are also in the pipeline.

This is yet another short week due to Whit Monday when markets in the greater part of the world were closed. The start of the week will be dull globally, but not so much in Hungary where the MNB will hold its monthly policy meeting. We should not expect interest rate conditions to be altered, but we would not be surprised if the Monetary Council decided to comment on recent volatility of money markets in its official post-meeting statement.

On Wednesday morning, the Central Statistical Office (KSH) is set to release its wage statistics for March, and the ECB is going to publish its Convergence Report on the same day. The document is released biannually and puts the spotlight on countries that have not yet joined the euro area to see how close they are to meeting the criteria necessary to adopt the single European currency. Hungary does not stand too badly in this respect, it is rather the political will that has been missing for the last few years. Germany’s statistical office will release revised GDP data for the first quarter and preliminary manufacturing PMI figures are in the pipeline not only in Europe but also overseas. At 8 P.M. Hungarian time, the minutes of the latest Fed policy meeting is scheduled for release. It could serve as guidance for the Fed’s future rate moves.

On Thursday, Hungary’s KSH is to publish revised retail sales data and the biweekly bond auction by the Government Debt Management Agency (ÁKK) might also be interesting after the sharp yield increases of the last few weeks. If tensions about emerging markets do not abate, yields at the auctions could also rise as a response. The ECB is going to release the minutes of its latest policy meeting also on Thursday, but it is unlikely to stir waves on markets.

Despite the short week, important releases/events are left also for Friday: Germany’s IFO sentiment index, GDP data for the UK, and comments by Fed President Jerome Powell in the early afternoon.

Front page photo by AFP Photo/ Faget Dominique

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