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A 30bps Hike (At Least) Very Likely Next Week

HUNGARY
  • The NBH is very likely to accelerate the pace of its tightening cycle at the next meeting (Nov 16) following the positive surprise in inflation yesterday.
  • CPI inflation accelerated to 6.5% in October (vs. 6.2% exp), up from 5.5% the previous month.
  • We have seen recently that CEE central banks (i.e. Poland, Czech Republic) have been very sensitive to the surge in inflation and did not hesitate to surprise the market with aggressive hikes in their latest meetings.
  • The NBH, which slowed down the pace of its tightening cycle in its last two meetings (15bps hikes at each meeting), will likely proceed with a minimum 30bps hike on November 16.
  • HUF is more or less unchanged since yesterday, with USDHUF trading at the high of its 1-week range at 312.50; next resistance to watch on the topside stands at 315.

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