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HUF Strength Keeps Supporting Equities

HUNGARY
  • Yesterday, economic data showed that Hungarian PPI rose 14.8% YoY in August, up from 11.6% the previous month, the fastest pace since January 1998.
  • This morning, July retail sales came in lower than expected at 3.0% YoY (vs. 3.5% exp.), down from 5.8% the previous month.
  • Momentum on HUF remains firm again major crosses amid hawkish NBH; traders keep chasing the monetary policy divergence.
  • Hence, HUF strength has been supporting Hungarian equities, with BUX index currently trading close its all-time high slightly below the 52,000 level.
  • EURHUF has been trading within a tight 3-figure range in the past week, oscillating between 347 and 350; resistance to watch above 350 stands at 354 (50D and 100DMA). On the downside, first support to watch below 347 stands at 345.
  • Hungary 10Y yield has been consolidating slightly lower in the past two days after reaching a local high at 3.03% on Wednesday; key resistance on the topside remains at 3.22%. On the downside, first support stands at 2.92%, followed by 2.84% (50D and 100DMA).

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