Summary:
- Soft indicators from the EU will be released before noon
- Hungarian central bank expected to keep rates unchanged
- US consumer confidence and house price data
10:00 am BST - soft indicators from European Commission: A set of preliminary PMIs we were offered last week did not bring a turnaround in managers’ sentiment. This is especially true when it comes to manufacturing, however, moods in services also deteriorated in May. Today we will have another chance to see how sentiment evolved in May as the European Commission will release its monthly publication. Indices for producers and service providers are expected to fall slightly, while the index for consumes are forecast to have stayed unchanged.
1:30 pm BST - Hungarian rate decision: At the beginning of the year the Hungarian central bank signalled the need for tighter policy, rhetoric that strengthened the forint. However, a lot has changed since then. At the end of March the bank decided to hike its overnight deposit rate by 10 basis points to -0.05% but at the same time it communicated another round of attractive financing for banks (a step toward monetary policy easing). The forint has lost more than 4% against the US dollar since that time, breaking 290 for the first time since April 2017. The consensus ahead of today’s meeting suggests no change in rates.
2:00/3:00/3:30 pm BST - house price data/Conference Board/regional Fed index from Dallas: After a holiday on Monday investors in the US will be offered some interesting macroeconomic readings today. First of all, the house price index is forecast to have increased 0.2% MoM in March. In turn, the Conference Board index reflecting US consumers’ sentiment is expected to have risen in May to 130 from 129.2 in the prior month. Finally, the regional Fed index from Dallas (for May) is forecast to have jumped to 5.8 from 2. It is worth noting that other regional indices in May also saw a significant bounce, however, a trade battle escalation could act to the detriment of entrepreneurs' moods once again.
Central bank speakers:
8:30 am BST - ECB’s Villeroy
1:00 am BST (Wednesday) - RBNZ’s Orr
2:00 am BST (Wednesday) - BoJ’s Kuroda
The USDHUF is trading above 291 in anticipation of the Hungarian central bank rate decision. Source: xStation5
