Key events in EMEA next week

After the Hungarian central bank's announcement that a rate hike cycle is about to start in June, we don't expect any change at the rate-setting meeting in May.

Given that the forint now hovers around 350, we don’t see any reason to front-run the announced starting point of the hawkish cycle. Other than the meeting, labour market data could bring some action. We see the three-month moving average of the unemployment rate moving down, while public sector wage growth is likely to remain elevated.

Russian activity numbers for April are likely to be strong, mostly on the back of low base effects, as April - May 2020 were the only two months of strict lockdowns in Russia.

We also expect retail trade, which may show at least 24% YoY growth, to have benefitted from lack of foreign tourism, as well as higher leverage and a splurge of savings, likely to be confirmed by the banking statistics also to be released next week. We expect industrial output to at least rise by 5% YoY on the back off base effects, higher oil exports which have already translated into strong current account numbers in April, and support from positive spending growth.

The central bank is likely to see the activity data as confirmation of its upbeat economic growth expectations for this year, reinforcing the hawkish monetary stance for the upcoming meeting.