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NBH Left Rate Unchanged as Expected, HUF Weaker, 10y Yield Lower

HUNGARY

  • As expected, the NBH kept its benchmark rate and its overnight deposit rate steady yesterday at 0.6% and -0.05%, respectively.
  • NBH mentioned in its press release that it now stands ready for monetary policy tightening and react in a 'proactive' manner to counter the inflationary forces that have been building in recent months.
  • The HUF has been depreciating since yesterday's decision, which was largely priced in by the market; EURHUF rose back above the 350 resistance (next level to watch on the topside stands at 355) and USDHUF has also retraced higher above 286, next resistance on the pair stands at 290.
  • The 10Y yield continues to consolidate lower after hitting a high of 3.22% last week and is currently testing the 2.90% level (nearly erasing all the recent move); next support to watch on the downside stands at 2.78% (50D SMA).
  • Earlier this morning, it was announced that Hungary's parliament ratified the 800bn EUR pandemic stimulus package.

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