Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- The NBH decided to raise its policy rate by 100bps to 10.75%, its highest level since November 2008.
- Even though the magnitude of the hike was higher than what markets have been pricing in recently (50bps to 75bps), the forint continues to be driven by external factors such as geopolitical uncertainty.
- The NBH added that it sees need to raise its 1W depo rate by 100bps on Thursday.
Link to full review:
Yesterday, the NBH decided to raise its policy rate by 100bps to 10.75%, its highest level since November 2008. Even though the magnitude of the hikes was higher than what markets have been pricing in recently (50bps to 75bps), the forint continues to be driven by external factors such as geopolitical uncertainty. Rising risk aversion and USD strength have been associated with HUF weakness, therefore the 'hawkish' move from the NBH has not generated any significant impact on the EURHUF pair, which continues to trade above the 400 level. Figure 1 (right frame) shows the strong 'co-movement' between the DXY index, which could be seen as a measure of risk-aversion (elevated when USD rises), and EURHUF spot rate.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.