​Forint Firms Despite Deepening Recession

EURHUF sits 0.50% lower headed through the European Open, despite this morning’s data showing that the Hungarian economy contracted for the fourth consecutive quarter. The cross has pared roughly half of yesterday’s gains, though still sits ~0.9% higher on the week.

• The recent uptick in equity futures and slightly lower US Tsy yields are likely providing a tailwind to HUF performance, which has largely been a function of global risk sentiment in recent weeks. Today, the Forint sits at the top of the EMEA FX pile (PLNHUF: -0.15%; CZKHUF: -0.40%).
• Technically, EURHUF remains bullish with last week’s losses considered corrective. The bear trigger and key resistance lies at 394.67, the Aug 3 high – a break of which would resume the uptrend. On the downside, a sustained break of the 20- and 50-DMAs would reverse recent conditions.
• Yields on HGBs are little changed on the day, while the Budapest Stock Index sits 0.80% lower – slightly underperforming the counterparts of its CE3 peers.