inflation expectations

Inflation Drops Sharply, but Stability Remains Elusive

Inflation in Hungary decreased in November, but this was mainly due to base effects and government measures. We might be starting on the downward part of the rollercoaster right now – but that means the ride may be set to shoot upwards next

Ukraine Peace Deal Hopes Weigh on EUR Inflation Swaps as Real Rates Hit New Highs

Intuitively, a deal with Russia would help euro rates higher, but falling gas futures are already pushing down the curve through lower inflation expectations. Tensions with Russia are likely to stay, which means risk sentiment should remain fragile 

Stubborn UK Inflation Keeps BoE Split, but December Rate Cut Still in Play

UK inflation has peaked, but the latest data is a tad hawkish for the Bank of England. Food inflation was strong, which is red meat for the hawks. Services inflation rose, once volatile items are stripped out. However, we still expect the Bank to cut rates in December

Hungary’s Inflation Stagnates for the Fourth Consecutive Month Despite Persistent Price Pressures

Inflation in Hungary showed signs of stagnation in October, yet this is still not a success story. With price pressures still above the central bank’s target, it is highly unlikely that we will see any interest rate cuts until autumn next year

EUR Steady as France Eyes Corporate Tax Hike; Softer UK Food Inflation Supports BoE Cut Bets

EUR/USD has nudged through resistance at 1.1650 in quiet markets. The softer dollar has been the driver, although we wonder whether some compromise on the French budget is helping too. 

Eurozone Growth Prospects and US Rates: Diverging Paths Amid Fiscal Adjustments

A revision of the eurozone's long-term growth outlook would have a significant upward impact on euro swap rates. This is unlikely to happen overnight, but in our view should build gradually over time. In the US, it's a steady state along the coupon curve. But there’s lots going on in the pipes of the money markets as repo tightness persists

Euro Rates Hold Steady Amid Political Uncertainty, but Long-Term Pressures Point Higher

We doubt markets expect the French prime minister to find a solution by Macron's imposed deadline. With little else to work with, supply pressures might be leading on Wednesday. Overall, euro rates seem well-positioned for now, but over the long term, we see the 10Y swap rate settling at a higher level 

Czech Republic: Softer Inflation Driven by Food Prices, but Services Keep Pressure High

Unprocessed food was mainly responsible for Czech headline inflation ticking lower. Meanwhile, pricing in services remains robust, and may affect inflation expectations. One softer-than-expected inflation print is unlikely to alter the central bank's hawkish stance. We'd need to see more relaxed core inflation and disinflation in services first

Markets Eye Fed Reshaping, European Sector Rotations, and Key Global Catalysts Ahead

MKT INTEL VIEWS: NVDA delivered a solid print (rev +56%y/y) but the stock is down as this was the smallest % increase in 2 years and results were a bit light of expectations (see our spec sales take here). The stock market reaction across Asia Tech seems to suggest the AI trade remains intact, although reports that China chipmakers are aiming to triple AI chip output next year also helped (within SHCOMP, Tech is the only sector in the green this morning as 85% of stocks are lower).

Markets Digest Nvidia Miss, Bond Volatility Suppression, and Shifting Consumer Momentum

NVDA was a touch disappointing, mostly on China, while other components were largely in line. Japan AI proxies are trading higher (GSXAJPAI +1.4%), though NVDA price action will come down to positioning setup. 

Global Markets React to Fed Turmoil, French Political Jitters, and Oil Volatility

The Asian session saw a shaky start as US President Donald Trump posted on his Truth Social account that Federal Reserve Governor Lisa Cook will be removed effective immediately.

The immediate reaction saw a gauge of the US dollar retreat as much as 0.3% and gold rose as much as 0.6% to around $3385/oz.

Hungary: Wage Growth Surprises to the Upside, but Consumer Confidence Remains Key

Although real wage growth was strong in June, it has not yet returned to the double-digit levels seen in previous years. We expect negative perceptions of household finances to persist. Weak consumer confidence continues to be a problem for the economy

French Political Uncertainty Widens Spreads, but Contagion Remains Contained; US Long-End Pressured by Fed Risks

French politics is injecting uncertainty into eurozone bond markets, but the spread widening remains more confined to French bonds for now. Long-end yields globally have felt supply and fiscal pressures, yet the challenge to central bank independence puts a unique focus on the US curve 

Political Risks, Fed Uncertainty, and Market Strains Weigh on Global Sentiment

This week could have started calmly, with investors digesting Friday's policy shift at the Federal Reserve (Fed), consolidating recent gains and repositioning ahead of the all-important Nvidia earnings due Wednesday. But instead, Donald Trump chose to keep markets on edge by announcing the dismissal of Fed Governor Lisa Cook over alleged mortgage fraud.

South Korea’s Consumer Sentiment Strengthens for Fifth Consecutive Month

South Korea’s latest fiscal stimulus contributed to improved consumer sentiment and greater growth momentum. But these effects may prove temporary. Even so, the Bank of Korea will stand pat later this week, as it focuses more on housing prices. 

Mixed Inflation Data and Durable Goods Orders Shape Market Outlook

The UK CPI was weaker than expected in February at 2.8%yr compared to 3.0%yr in January. Core inflation edged down from 3.7%yr to 3.5%yr, but services inflation held up at 5.0%yr. However, decrease in both was mainly driven by weaker core goods inflation, while services inflation, which the BoE officials follow closely, was unchanged at 5%yr. 

Markets on Edge: Option Expiry Volatility Meets Trade Hopes and Macro Focus

After the very fragile post-FOMC rebound, Friday's session saw American indices (notably techs) extend their recovery, aided by more measured remarks from Donald Trump, who said “there’ll be flexibility” on reciprocal tariffs. 

FX Market Update: Cautious Trading Ahead of Fed Decision; USD Firms, TRY Slides

• USD firmer as markets trade cautiously into Fed decision.
• CAD slips back from probe through upper 1.42s.
• EUR drifts lower after another failure  around 1.0950 yesterday.
• GBP tracks peers, short-term price patterns may be tilting negative.
• JPY drops after BoJ holds policy rate at 0.50%, as expected.
• AUD, NZD lower in line with peers; Aus jobs, NZ GDP data due tonight.
• MXN softer on the day but holds gains back through 20.

Markets Rally on German Fiscal Deal; US Data Disappoints, Inflation Expectations Surge

Friday's session was marked by the announcement that an agreement has been reached with the Greens in Germany, notably on the €500bn infrastructure fund, of which €100bn will be dedicated to the energy transition, but also on exemptions to the debt brake. 

EUR/USD Eyes Fed Caution and German Fiscal Surge Amid Shifting Market Sentiment

It has been a quiet start to the week for the major FX rates ahead of a busy schedule of G10 central bank meetings this week including the BoJ and Fed on Wednesday followed closely by the SNB, Riksbank and BoE on Thursday. Ahead of those policy updates the US dollar is continuing to consolidate at weaker levels against other major currencies with the dollar index trading just below the 104.00-level.

Overvalued Dollar Faces Mounting Pressure Amid US Growth Fears and Policy Uncertainty

At the same time, the US dollar is being negatively affected, especially since its nominal effective exchange rate suggests the currency is overvalued. The US dollar is penalised by concerns over US growth, with an increased risk of stagflation taking hold in the United States. 

Global Markets Weekly Recap: US Dollar Weakness, ECB Policy Outlook, and Equity Market Volatility

American exceptionalism, the main market theme since Trump's election in November, is clearly in a bad way, stoking the idea that American soft power is on the wane. Trump is certainly not solely to blame for this gradual deterioration. Rather, it is the promise of a rebound that seems to be vanishing.

US Consumer Confidence Plummets Amid Trump Policy Concerns; Fed Expected to Cut Rates, Economic Fragility Unveiled