The National Bank of Hungary meets on Tuesday, August 24 to set activity costs and a 1/3 consecutive 30 groundwork factor hike in the base charge is extensively expected. The Hungarian forint has been performing very properly however as a front-loaded tightening cycle is already priced in, EUR/HUF is set to upward shove to the 355 area, as per ING.
Markets pricing in tightening
“All factors to a 30bp hike in the base charge to 1.50% and in all likelihood language signalling in addition increases. We favour the base fee being added shut to the 2.00% region with the aid of year-end.”
“Given that a lot of the right information appears priced into the HUF, and fragile EMFX in general, we would say the stability of risks in EUR/HUF lie toward the 353, per chance 355 area.”
“One wild card at the assembly is what the NBH does with its QE policy. Any suggestions that it ought to begin a gradual taper ought to hit the pricing of the terminal base charge and should upset a market going into the assembly lengthy the forint.”