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Morning Summary: HUF Strength Is Giving NBH A Breather

HUNGARY
  • Covid cases continue to rise in Hungary, with the 7D SMA of daily new cases up 600 to 5,500 in the past 5 days.
  • Hungary sold 15bn HUF in 322-day bills yesterday, with a bid-to-cover ratio of 2.24, with a yield of 0.68%; it also sold 30bn HUF of 2027 floating bonds (with a bid-cover) ratio of 2.56.
  • As expected, the NBH decided to leave its deposit rate unchanged at 0.75% in its weekly meeting. The sharp consolidation in EURHUF we have seen since mid-March is giving the NBH more room for manoeuvre as some participants were speculating that the NBH was going to be 'forced' to increase its 1W deposit rate if EURHUF broke through its LT resistance at 370 last month.
  • There are no important economic data to watch today.

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