Review
- Unemployment in Latvia rose to 18.4% in Q3, up from 16.7% in Q2, as the sharp economic downturn has taken its toll on the labour market.
Preview
-
The rate decision in Hungary will take centre stage today. Even though it seems to be a done deal that there will be yet another rate cut today, there is some uncertainty about the size of it. Until recently we had expected that the MNB would finish its easing cycle on Monday with a 25bp rate cut. However, we must acknowledge that recent comments from MNB policy makers make it more likely that they will cut 50bp on Monday. Furthermore, the MNB is likely to keep the door open for even more rate cuts.
-
Besides the rate decision in Hungary, some interesting economic data such as retail trade for September in Hungary and industrial production for October in Lithuania are scheduled for release today.
Trading update
-
To track the performance of our EMEA FX Scorecard we have decided to issue trading recommendations in relative trades between the five currencies in the Scorecard on a weekly basis. We will recommend buying the highest scoring currencies against the lowest scoring currencies on the Scorecard. The Scorecard trade of the week will not take into account any other factors not covered by the Scorecard that could influence the performance of the EMEA currencies. Hence, the trading recommendation will be purely mechanical and will only reflect the signals from the Scorecard.
-
The signals from our Scorecard suggest buying PLN/TRY, as PLN scores the highest (+1.0) and TRY scores the lowest (-0.9) on the Scorecard – see tables with scores in our New Europe Weekly. This morning we entered a long position in PLN/TRY spot at 0.5368. We will keep you updated regarding the performance during the week.
