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Virag Sees Room for Short-End Yields to Rise “Several Hundred Basis Points”

HUNGARY
  • Markets re-open Wednesday after closures on Tuesday for All Saints’ Day.
  • In an interview with VG Daily, deputy governor Virag said he sees scope for a further tightening of policy outside of interest rates, adding that the NBH does not tolerate processes that threaten price stability.
  • On the recent emergency policy actions, Virag said the bank is already seeing the cooling effects across credit and real estate markets, but sees T-bill and FX swaps as needing to move further to absorb rate hikes. As such, Virag stated “yields have room to rise by several hundred basis points”.
  • Manufacturing PMI came in well ahead of expectations for October, rising to 56.4 vs. Exp. 49.0 (Prev. 49.6). Meanwhile, trade balance data showed a wider deficit of EUR 1.58bln (Prev. EUR 1.3bln).

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