HUF: Forint Reverses Wednesday’s Gains Following Disappointing Activity Data
Feb-06 08:43
The forint has slipped alongside most other EMEA currencies, with a partial recovery in the greenback from Wednesday’s lows providing a headwind. However, disappointing Hungarian retail sales and industrial production data for December is accounting for the forint’s notable underperformance across CEEMEA, with HUF price action this morning resulting in a full reversal of yesterday's gains versus both the euro and the dollar. Despite today's 0.2% advance for EURHUF, initial resistance remains some way off at 409.70, the 50-day EMA.
- The Hungarian statistics agency said the one-year low for retail sales can be partly explained by consumers bringing forward Christmas purchases to November, and also attributed weaker domestic sales on Hungarians spending more abroad at the end of the year.
- As a reminder, data last week showed Hungary’s GDP expanded by 0.5% Q/Q in Q4, tipping the economy out of a recession, but the latest activity indicators will fuel concerns that growth is struggling to gain momentum – year-on-year GDP growth stood at just +0.4% in Q4. As per its December projections, the NBH forecast growth at 2.6-3.6% in 2025.
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MNI: EUROZONE DECEMBER CONSTRUCTION PMI 42.9 (NOV 42.7)
Jan-07 08:30
- MNI: EUROZONE DECEMBER CONSTRUCTION PMI 42.9 (NOV 42.7)
GILTS: Flat Start, Long End Supply Due
Jan-07 08:20
Little net movement in gilts as softer-than-expected French CPI counters earlier selling in Bunds.
- Futures +10 at 92.05,
- Bearish technicals intact in the contract.
- Initial support at the Dec 19 low/bear trigger (91.64), while initial resistance is located at the Jan 2 high (92.88).
- Yields little changed across the curve to start.
- Gilt/Bund 10-Year yield spread flat at 216bp.
- SONIA futures 0.5-1.5bp higher on the day with wider bonds off lows and BoE-dated OIS showing 57bp of cuts through ’25 vs. 56bp early today.
- DMO issuance for calendar ’25 gets underway this morning, via GBP2.25bln of the 4.375% Jul-54 gilt.
BONDS: Bobl/Bund Block trade
Jan-07 08:13
Bobl/Bund block trade suggest a steepener, perfectly weighted.
- RXH5 ~2.35k sold at 132.40.
- OEH5 ~4.95k bought for 117.25.
