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CPI & HUF Risks Reinforce NBH Cautious Stance; EUR/HUF in Overbought Territory

HUNGARY
  • EUR/HUF trading lower at the open in line with a weaker greenback and more positive EM risk sentiment.
  • CPI printed marginally above expectations at 3.1% y/y, reinforcing the NBH's cautious stance.
  • Headline CPI is expected to reach a cyclical peak in April/May on base effects, an excise tax increase on tobacco products and higher oil prices, necessitating the maintenance of the bank's cautious stance and +15bp key rate-1 week deposit margin.
  • HUF volatility & passthrough risks also part of the cautious bias, that have been accentuated by rising UST yields in recent weeks.
  • Similar to EUR/PLN the cross is now close to emerging from overbought territory on the RSI, having made a new YTD high.
  • With the March-20 high (369.54) in sight, scope for more upside is becoming more constrained and may see the cross consolidate at these levels.
  • Intraday Sup1: 366.62, Sup2: 365.44, Res1: 368.87, Res2: 369.54
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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