Hungary’s fiscal path, CBRT inflation, shekel strength

Announcements from Hungary’s new government, which took office last weekend, suggest that we’re unlikely to see the full details of its plans to reduce the budget deficit until Q3. Until then, the government will have to make progress on institutional reforms to sustain the post-election market rally. Elsewhere, the Turkish central bank’s Inflation Report didn’t fully acknowledge the scale of the energy shock, and suggests that the bar for further monetary tightening is high. Elsewhere, the Israeli shekel’s hit a 33-year high against the dollar this week and we now think a bit more appreciation lies in store.