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Hungarian unemployment reached a 13−year high in the July−September period

Fri, Oct 30 2009, 12:29 GMT
by Lars Christensen

Danske Bank A/S

Review 

• Hungarian unemployment reached a 13-year high in the July-September period as three-month rolling unemployment increased to 10.3%. We expect the labour market to continue deteriorating and expect year-end unemployment to rise to over 11%. 

• Also, South African unemployment was published yesterday. In Q3 the official jobless rate rose to 24.5% in Q3, up from 23.6% in Q2.

• While speaking in the South African parliament, president Jacob Zuma said that despite increased borrowing needs, the South African government would ensure that the borrowings would not overburden future generations. President Zuma clearly tried to talk down the negative reaction that followed the medium-term budget policy statement published this week, showing that this year’s budget deficit would swell to a record 7.6% of GDP. 

• Yesterday, the Czech Finance Ministry published its new macroeconomic forecast, which takes into account an approved fiscal saving package, which has influence both growth and inflation. The FM expects 2009 GDP to contract by 5% (previously to contract by 4.3%) and moderate positive GDP growth of 0.3% in 2010. This is pretty much in line with our expectations. (See our macroeconomic forecast on the Czech Republic)

Preview

• Retail sales figures in Estonia and Latvia are due for release today. The trade balance in Turkey and South Africa should be worth looking out for. 

Trading update 

• Yesterday most of EMEA FX markets received some relief after suffering some selling off since Monday. The release of the US Q3 GDP numbers were better than expected and calmed fears over the sustainability of the global recovery, giving some stimulus to EMEA FX markets. 

• The EMEA markets are clearly on a knife-edge – any deterioration of the global financial environment or renewed worries could trigger a new round of sell-offs in the region’s FX and fixed-income markets. Our EMEA FX scorecard is overall still signalling weakness in the region’s currencies. 

• Yesterday we closed our two EMEA FX-trading recommendations. We entered EUR/HUF at 268.75 and closed it at 272 with a 1.2% profit. We entered a long USD/ZAR position at 7.58 and closed it at 7.72 with a profit of 1.8%.

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Published on  Fri, Oct 30 2009, 12:43 GMT