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Local Holiday Today, Analysts Expecting 50BP NBH Cut Tuesday

HUNGARY
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  • A holiday in Hungary today, combined with a subdued start to the week for global markets, has kept EURHUF confined to a tight 386.25/387.50 range. The recent breach of support at 388.34 (re-tested Friday), has strengthened the bearish theme and the focus is on 385.00, of which a break would open 382.34, the Feb 1 low.
  • In local news, Foreign Minister Peter Szijjarto told reporters that Hungary considers its alliance with Serbia "an invaluable asset", speaking in a press conference on Friday. The highlight this week on the domestic calendar will be the NBH policy decision, with wages and unemployment rate data also crossing later in the week.
  • Deputy Governor Virag's commentary last week on the NBH’s policy path were typically direct, leaning against any outside expectations that the NBH could slow the pace of their easing path as soon as Tuesday's rate decision.
  • Virag made clear that he expects a further 75-100bps of rate cuts across H1, before a slower pace of easing into year-end. This leaves a 50bps rate cut in May and either a 25 or 50bps rate cut in June as the most probable outcomes. Beyond that, the extent of the expected bounce in inflation through the summer will define the policy path into 2025.
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  • A holiday in Hungary today, combined with a subdued start to the week for global markets, has kept EURHUF confined to a tight 386.25/387.50 range. The recent breach of support at 388.34 (re-tested Friday), has strengthened the bearish theme and the focus is on 385.00, of which a break would open 382.34, the Feb 1 low.
  • In local news, Foreign Minister Peter Szijjarto told reporters that Hungary considers its alliance with Serbia "an invaluable asset", speaking in a press conference on Friday. The highlight this week on the domestic calendar will be the NBH policy decision, with wages and unemployment rate data also crossing later in the week.
  • Deputy Governor Virag's commentary last week on the NBH’s policy path were typically direct, leaning against any outside expectations that the NBH could slow the pace of their easing path as soon as Tuesday's rate decision.
  • Virag made clear that he expects a further 75-100bps of rate cuts across H1, before a slower pace of easing into year-end. This leaves a 50bps rate cut in May and either a 25 or 50bps rate cut in June as the most probable outcomes. Beyond that, the extent of the expected bounce in inflation through the summer will define the policy path into 2025.