Key events in EMEA next week

We have a very busy week ahead in Hungary. First of all, the first batch of hard data for July should reinforce our view that the Hungarian economy is not out of the woods yet. We expect both retail sales and industrial production to remain well below last year's levels.

Perhaps the most important data release will come on Friday when the Statistical Office will announce the inflation rate for August. We have made a last-minute change based on big data and anecdotal evidence. We see a significant rise in the month-on-month inflation print as the removal of food price caps may have a bigger pro-inflationary impact than we initially thought. Against this backdrop, food, fuel and services will be responsible for the rise in monthly inflation. However, with a favourable base effect, the year-on-year figure is expected to show continued disinflation. A higher-than-consensus inflation print could trigger a sharp market reaction, especially after the hawkish comments at the central bank's August rate-setting meeting.

We expect the trade balance to remain in surplus in July, while the fiscal situation could improve in August with better revenues thanks to buoyant tourism (partly related to the World Athletics Championships in Budapest).