EUR/HUF: The NBH left rates unchanged, as widely expected

ECONOMIC CALENDAR

EUR/USD: The NBH left rates unchanged, as widely expected

• Hungary's central bank left interest rates unchanged at 2.1% in line with its guidance. Governor Gyorgy Matolcsy said after the July meeting that rates would remain unchanged until the end of next year.

• The National Bank of Hungary released new medium-term macroeconomic forecasts. It raised 2014 GDP growth forecast to 3.3% from 2.9% previously. GDP growth in 2015 is expected at the level of 2.4% (vs. 2.5% previously). The central bank sees average 2014 CPI at 0.1% (0% previously) and average 2015 inflation at 2.5% (unchanged vs. the previous forecast). The bank said inflation could remain in line with target by maintaining current monetary conditions.

• The Monetary Council said that the bank had considered three alternative scenarios for the economic outlook and rate policy. One of these alternative scenarios assumes looser monetary conditions than those in the baseline scenario. The other two alternative scenarios imply a tighter monetary policy stance.

• Hungary posted a current account surplus of EUR 809 mln in the second quarter after a revised EUR 1.067 bn surplus in the first quarter (up from EUR 984 mln).

• We have gone short on the EUR/HUF yesterday at 312.00 with the target of 306.90 and stop-loss at 314.00. The nearest strong support level is 100-dma at 309.51.

Significant technical analysis' levels:

Resistance: 312.42 (high Sep 22), 313.50 (high Sep 18), 315.75 (high Sep 15)

Support: 309.51 (100-dma), 306.75 (low Jul 23), 305.68 (61.8% of 301.50-312.45)

EUR/PLN broke below 4.1800 and testing 200-dma

• Retail sales fell by 1.1% mom and increased by 1.7% yoy in August vs. growth by 2.1% yoy in July and the median forecast assuming an increase of 1.3% yoy. In real terms retail sales rose by 2.8% yoy.

• Poland's registered unemployment rate fell to 11.7% in August from a revised 11.8% in July. Deputy Labour Minister Jacek Mecina said Poland's unemployment rate is likely to fall to 11.5-11.6% in September.

• Poland's central bank governor Marek Belka said on Tuesday that an interest rate cut is very likely, adding that the rate-setting panel will also debate whether a move larger than the standard 25 bps is needed.

• The EUR/PLN broke below the level of 4.1800 and is testing the support level of 4.1737 (200-dma) which is a bearish signal and opens the way to the area of 4.1400/1600. The nearest strong support level is at 4.1665 (100-dma).

Significant technical analysis' levels:

Resistance: 4.2016 (high Sep 19), 4.2160 (high Sep 10), 4.2336 (high Aug 29)

Support: 4.1675 (low Sep 4), 4.1665 (100-dma), 4.1600 (low Aug 5)