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Market Sees Another 100bps Hike in Policy Rate By Year End

HUNGARY
  • Odds of another 30bps hike at the next meeting (July 27) have been rising significantly following the higher than expected CPI print in June last week (+5.3% YoY vs. 4.9% exp.).
  • FRA 6Mx9M is currently trading nearly 100bps above the Bubor 3M, implying that the market expects a series of 15bps hikes following the 'big hike' on July 27.
  • USDHUF ticks higher this morning and is currently trading slightly below its 305 resistance; a break above that level would open the door for a move up to 310. On the downside, first support stands at 298.70 (200DMA).
  • Hungary 10Y yield has been flat in the past week, oscillating between its 100DMA (2.78%) and 50DMA (2.89%). Key resistance to watch on the topside stands at 3%; on the downside, first support to watch below 2.78% stands at 2.74%.

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