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WTI Extends Winning Streak, RSI Flashes Overbought

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  • On Wednesday, economic data showed that Hungary May CPI came in slightly lower than expected at 5.1% (vs. 5.3% exp.), leading to more hawkish tone from NBH policymaker.
  • Deputy Governor Barnabas Virag once again confirmed yesterday that he sees the end of ultra-loose monetary policy due to sustained CPI risks and therefore thinks that the NBH needs to gradually normalise ST rates. Virag expects CPI to be higher than 4% this year (above the NBH upper tolerance band).
  • Governor Gy├Ârgy Matolcsy also mentioned that monetary tightening is necessary following CPI data.
  • In the past few months, we have seen that the spike in inflation has led to an in disagreements between NBH policymakers over the trajectory of rates in the coming months.
  • USDHUF has been moving sideways in the past two weeks, trading between 283 and 287; resistances to watch on the topside stand at 290 and 294 (50D SMA). On the downside, first support below 283 stands at 280.
  • Hungary 10Y yield is down sharply this morning, approaching its 100D SMA at 2.66%; next support stands at 2.60%. On the topside, first resistance stands at 2.82% (50D SMA), followed by 3%.