Crucial data to come this week as the government faces the impact of its measures
In recent weeks, investors' fancies have been stirred by developments in the tariff war and the Russian-Ukrainian war. After the initial scare, it seems that Donald Trump's tariff measures will not be so harsh after all, or at least the US President is showing himself willing to compromise.
War tensions between Moscow and Kyiv show no sign of abating, and Trump is slowly abandoning his peace initiative. Until the parties can agree on at least a temporary ceasefire, there is little reason to expect any serious positive developments. And this will continue to put pressure on world stock markets.
The forint has seen little movement for weeks, with the euro stuck in a narrow range of 402-404. The attractive carry trade is the main reason why the Hungarian currency is holding so steady, as there does not seem to be much room for the forint to strengthen, and the weakening is being prevented by our high interest rate differential.
We have a shortened week because of Pentecost Monday, as stock markets around the world are on holiday. Only China released important inflation and trade data at dawn yesterday.
So the week only really gets underway on Tuesday, when the Hungarian Central Statistical Office (KSH) publishes its fresh securities statistics, and in the morning the Ministry of National Economy (NGM) publishes its preliminary May public finance data, which could be exciting. As usual, the full-year deficit target has now been met to a large extent in the first months of the year, so investors will be paying close attention to the latest fiscal data.
Wednesday morning brings the most important data of the week from a Hungarian perspective, as
the KSH publishes the May inflation statistics.
It shows the impact not only of the price freeze on food but also partly on hygiene products, as the government introduced the measure in mid-May. The question is whether the price increase rate will fall further from 4.2% in April after the new price freeze. The second half of the day will also see the arrival of fresh inflation data in the US and the May budget report.
Only a few US data points will be worth watching on Thursday, with the usual weekly jobless claims numbers and producer price developments of interest.
The last working day of the week will not be a dull one either, as the revised industrial production data and the April construction performance data will be released on Friday. In Europe, alongside German and French inflation data, Eurostat will publish statistics similar to Hungary's, while overseas we will see a fresh reading of the Michigan Consumer Confidence Index.
Cover photo (for illustration purposes only): Getty Images
