HUNGARY: Headline Inflation Seen Little Changed in April

Inflation data for April is on the docket tomorrow morning (07:30BST/08:30CET). As per the median estimate of the Bloomberg survey of analysts, the headline CPI will likely edge slightly higher from +3.6% Y/Y in March to +3.7% Y/Y in April.

• Goldman Sachs expect headline CPI to remain broadly stable, easing slightly to +3.5% y/y as weaker inflation momentum in food and energy inflation will offset base effects in food inflation.  They note that exchange rates have stabilised, gas prices are running at less than 1/10 of peak levels, and food commodity prices have weakened. Although they expect headline inflation will increase close to the upper bound of the NBH's +3.0% +/- 1pp target range, Goldman Sachs believe it will subsequently resume its decline and remain close to the mid-point of the target range.
• UniCredit estimate inflation increased by 3.7% y/y in April as the data will have been heavily influenced by service-sector repricing. They expect inflation to increase to 5.7% y/y by year-end, driven by prices for market services and regulated prices. UniCredit add that unless we see a big surprise in the core figure, the NBH could proceed with either a 25 or 50bp cut in May, assigning a slightly higher probability to the latter.