380.00 Handle Provides Resistance to EURHUF; HGBs Soften Across the Curve

EURHUF has pared some of its earlier gains with the 380.00 handle noted to have provided upside resistance on the day. The pair last deals 0.20% in the red, which means HUF still underperforms versus the majority of its EM peers. Moves follow a sharp rally on Wednesday which lacked any real fundamental trigger - prompting some on the sell-side to see the moves as flow- and positioning-driven, with price action consistent with shorter-term fast money involvement and potential short-covering.

• HGBs have softened today, with the curve seen bear flattening. Yields on 3Ys are up over 15bps while 10Ys deal 13bps higher. The move extends the bounce in yields off of recent 1-year lows and mirrors price action seen in EU FI.
• The Budapest Stock Index is outperforming its CEE peers, with the index seen rising over 1% on the day (WIG: +0.10%; PX: +0.15%) and at its highest level since February 2022. Bulls will eye gains toward January 2022 highs and 2021 highs further out.