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Momentum on HUF Remains Firm In February

HUNGARY
  • Last week, the NBH decided to leave its 1W Depo rate unchanged at 4.3% as expected, after raising it by 30bps the week before.
  • Based on Barnabas Virag latest press conference, the NBH will now proceed with monthly hikes in the 1W depo rate and is likely to hike by another 30bps in February and March, which would levitate the effective policy rate to 4.9% in Q1.
  • Selling pressure on HUF has eased in February, with EURHUF trading back below the 355 level (after reaching a local high at 362.10 in the end of January). ST support to watch on the downside stands at 350.90. On the topside, resistance to watch above 355 stands at 357.30 (200DMA).
  • Hungary 10Y yield has been consolidating lower after finding resistance slightly below the 5% level earlier this month. ST support to watch on the downside stands at 4.5880% (50DMA).

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