Hungarian automotive sector: New dawn or just mirage?

Erste Bank Research Team Erste Bank

On the radar

Today, Poland will publish core inflation in the afternoon.
Otherwise, there are no other releases scheduled.

Economic developments

Today we would like to come back and bring more attention to the Hungary’s Special Report published last week “Automotive sector: New dawn or just mirage?”. The report analyses the automotive sector in Hungary as it remains the largest sub-sector in Hungary’s manufacturing industry, accounting for 13.5% of all manufacturing jobs and employing over 104,000 people. Hungary has been attracting top EV players from the Far East to launch production, being a part of the government’s strategy - the so-called Eastern Opening. As a result, Hungary became one of the most important EV powerhouses in Europe. However, battery production has acted more as a substitute than a complement to traditional automotive, reinforcing Hungary’s dependence on German industry.

Market movements

The Czech koruna and the Polish zloty have strengthened against the euro more visibly over the last week. The EURHUF has been holding close to 384 ahead of the central bank meeting scheduled for this week. We do not expect any change in the key policy rate and expect hawkish tone. Hungarian Prime Minister Orban signed decree on raised windfall tax on lenders. In particular, banks must pay 10% of pre-tax profit for share under HUF20b (up from initial 8% plan), and 30% for share above HUF20b (up from 20% seen earlier). Hungary’s long-term yields increased last week due to adjustments in the budget plans for 2025 and 2026.

Download The Full CEE Macro Daily

Author

Erste Bank Research Team

Erste Bank

At Erste Group we greatly value transparency. Our Investor Relations team strives to provide comprehensive information with frequent updates to ensure that the details on these pages are always current.

EUR/USD looks sidelined around 1.1850

EUR/USD remains on the back foot, extending its bearish tone and sliding towards the 1.1850 area to print fresh daily lows on Monday. The move lower comes as the US Dollar gathers modest traction, with thin liquidity and subdued volatility amplifying price swings amid the US market holiday.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold loses momentum, eases below $5,000

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.