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10Y Yield Lower And HUF Stronger Ahead of NBH Meeting

HUNGARY
  • The NBH is expected to keep its benchmark rate steady at its policy meeting today (1300 London time); all eyes on the next two inflation prints.
  • However, the recent comments from deputy governor Virag increased the probability of an early move from NBH, with some sell side firms expecting a 10/15bps hike as early as June/July.
  • As a result, the volatility eased in the bond market with the 10Y yield retracing significantly lower by over 20bps towards the 3-percent level; next supports to watch on the downside stand at 2.84%, followed by 2.77% (50d SMA).
  • Momentum on the HUF has also been strong against all the major crosses, with the currency trading at multi-year highs; for instance, HUF is trading at its highest level since June 2019 against the USD and the JPY.

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