/HUF: Snapping Two-Day Losing Streak

PLN/HUF creeps higher ahead of the key European Commission meeting tomorrow, with the EU's executive arm expected to approve EUR4.1bn in recovery funds for Hungary while backing the suspension of EUR7.5bn in cohesion funds due to rule-of-law concerns. There has been little in the way of fresh updates on the matter over the past couple of hours, albeit Hungary's EU Funds Minister said this morning that the expected twin recommendation is likely to come to fruition, while EU Finance Ministers may decide on the Commission's advice at an additional meeting on December 12.

• Hungary/Poland yield spread has widened today, which has mostly been driven by drops in Polish bond yields, with press reports flagging Warsaw's efforts to tighten fiscal policy and reach agreement with Brussels on suspended EU funds. The yield differential touched cyclical narrows on November 21 before re-widening a tad.
• In terms of relative equity performance, WIG20 trades marginally lower after a failed test of its 200-DMA. Hungary's BUX index has pared the bulk of earlier gains but still sits some 0.3% higher on the session.
• PLN/HUF last deals at HUF87.46, up 70 pips on the day, with bulls eyeing a break above Nov 24 high of HUF88.38 before targeting the all-time high of HUF89.65. Bears see Nov 23 low of HUF85.82 as their initial target.