Chart of the Day:

Chart Of The Day

Hungarian Economic Sentiment: The GKI-Erste index turned positive for the first time in 16 years last month. The index displays a balance of positive and negative answers to questions about the outlook for the economy.


Analysts’ Views:

HU Rates: The Debt Management Agency managed to sell HUF 80 bn in 3M T-bills yesterday, 20 bn more than planned, amid an investor demand of HUF 142 bn. The average yield came in at 2.65%, while accepted yields ranged between 2.60-2.66%. Despite the negative news flow with regard to the Russian-Ukrainian conflict, Hungarian markets remained calm. This is also visible by looking at exchange rate movements as the forint appreciated too (in parallel with the Turkish lira and the South African rand). The forint was, therefore, a positive outlier yesterday, after lagging behind regional peers on Easter Monday. The robust current account position, the goverment's commitment to keep the budget deficit in check and risks of further ECB action should allow another 10 bp reduction of the policy rate next week in Hungary, to 2.5%. Nonetheless, for the time being, we expect the rate cutting cycle to halt at this level, as inflation is expected to increase slowly in the remainder of this year from the current, record-low levels. We continue to see the EURHUF at 302-303 by year-end.


Traders’ Comments:

CEE Fixed Income: Economic sentiment rose to the highest level since 1998 in Hungary last month and consumer confidence increased to a rate last seen in 2006. The positive sentiment was also broadly based with optimistic companies outnumbering pessimists in all areas except construction. Lest we get too carried away by this, Asian equities opened higher in the wake of another buoyant session in the US, but pared gains after the latest sign of a continuation of the slowdown in China as HSBC’s preliminary PMI rose only slightly to 48.3, signalling that activity contracted for a fourth consecutive month in April. CEE fixed income has been slow to come out of the blocks after the Easter break but yields are drifting lower in the absence of any major catalyst, indicating that investor sentiment is also generally positive but is more likely driven by the prospect of low rates for longer, or even QE in the Eurozone, rather than optimistic growth prospects.

This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD stabilizes near 1.0800 as trading action turns subdued

EUR/USD stabilizes near 1.0800 as trading action turns subdued

EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.

EUR/USD News

GBP/USD extends sideways grind above 1.2600

GBP/USD extends sideways grind above 1.2600

GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.

GBP/USD News

Gold pulls away from daily highs, holds above $2,200

Gold pulls away from daily highs, holds above $2,200

Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.

Gold News

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase. 

Read more

Portfolio rebalancing and reflation trades emerge into Q2

Portfolio rebalancing and reflation trades emerge into Q2

Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.

Read more

Majors

Cryptocurrencies

Signatures