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Positive Inflation Surprise Could Push NBH To Act Via 1W Depo Facility

HUNGARY
  • This morning, economic data showed that CPI inflation accelerated to 9.5% in April (vs. 8.9% exp.), its highest level since June 2001, up from 8.5% the previous month.
  • We have seen recently that a strong ‘positive’ surprise in inflation combined with a ‘weak’ HUF could push the NBH to act via its 1W depo rate facility in the short term.
  • Even though a few analysts expect the NBH to keep its 1W depo rate steady at 6.45% on Thursday, expectations could change to the upside.
  • EURHUF is down slightly following the CPI release, currently trading back below the 380 level. ST support to watch on the downside stands at 376.20 (50DMA). On the topside, resistance to watch above 380 stands at 384.70.
  • Yesterday, EU Von Der Leyen travelled to Hungary to discuss the planned sanctions on Russian oil with PM Orban. VdL described this meeting as ‘helpful to clarify issues related to sanctions and energy security’. However, further work will be needed.

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