HUF: EURHUF Approaches Initial Support as Russia-Ukraine Ceasefire Odds Diminish
EURHUF has risen 0.4%, with euro weakness weighing on the forint as well as its regional peers. The cross remains just below initial support at 391.90, the 20-day EMA, for now, but a break of this average could signal scope for a stronger reversal higher towards key resistance at 394.67, the 50-day EMA.
- US President Trump shifted his tone on Ukraine yesterday, saying it can reclaim all of its lost ground to Russia. However, the words within the post may in fact indicate Trump's intentions to step back from efforts to support Ukraine and end the war. While appearing boosterish on Kyiv's chances in the war, the post says Ukraine could take back all of its territory "with the support of the European Union," not the US.
- Meanwhile, Foreign Minister Peter Szijjarto said Hungary won’t stop buying Russian oil even if requested to do so by Trump. Historically, the Hungarian forint has shown a higher-beta to the Russia-Ukraine conflict than its CEE peers given its dependence on Russian oil.
- The prospect of EU tariff increases on Russian oil (as noted in the headline above) as well as the diminishing prospects of a Russia-Ukraine ceasefire (Polymarket odds of a ceasefire this year are at 11%, down from ~30% at the end of August) will therefore be providing a two-pronged headwind to the forint today.
Figure 1: Russia/Ukraine ceasefire in 2025? (Source: polymarket.com)
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US TSY FUTURES: September'25-December'25 Roll Update - Massive Volume
Latest Tsy quarterly futures roll volumes from September'25 to December'25 below. Percentage complete jumped to over a third of outstanding Sep'25 open interest after Friday's massive volume. "First Notice" date next week Friday, August 29. Current roll details:
- TUU5/TUZ5 appr 91,400 from -8.75 to -8.5, -8.75 last; 41% complete
- FVU5/FVZ5 appr 69,500 from -5.25 to -5.0, -5.25 last; 39% complete
- TYU5/TYZ5 appr 198,500 from -1.25 to -1.0, -1.25 last; 38% complete
- UXYU5/UXYZ5 app 138,800 from -0.5 to +0.0, -0.5 last; 37% complete
- USU5/USZ5 appr 25,400 from 12.5 to 13.0, 12.75 last; 41% complete
- WNU5/WNZ5 appr 48,000 from 7.5 to 8.0, 7.75 last; 41% complete
- Reminder, Sep futures don't expire until next month: 10s, 30s and Ultras on September 22, 2s and 5s on September 30. Meanwhile, Sep'25 Tsy options will expire LAST Friday, August 22.
US 10YR FUTURE TECHS: (U5) Trend Structure Remains Bullish
- RES 4: 113-23 76.4% retracement of the Sep’24 - Jan’25 sell-off
- RES 3: 113-07 76.4% retracement of the Apr 7 - 11 sell-off
- RES 2: 112-23 High May 1
- RES 1: 112-15+ High Aug 5 and the bull trigger
- PRICE: 112-01+ @ 11:26 BST Aug 25
- SUP 1: 111-13 50-day EMA
- SUP 2: 110-23+/08+ Low Aug 1 / Low Jul 15 & 16
- SUP 3: 110-03 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 4: 109-28 Low Jun 6 and 11
A bullish theme in Treasury futures remains intact and the contract continues to trade above support around the 50-day EMA, at 111-13. A clear break of this average would expose support at 110-23+, the Aug 1 low. For bulls, sights are on 112-15+, the Aug 5 high and the bull trigger. Clearance of this hurdle would resume the uptrend and pave the way for a climb towards 112-23 initially, the May 1 high.
LOOK AHEAD: Monday Data Calendar: Regional Fed Data, Home Sales, Fed Speakers
- US Data/Speaker Calendar (prior, estimate)
- 08/25 0830 Chicago Fed Nat Activity Index (-0.10, -0.11)
- 08/25 1000 New Home Sales (627K, 630K), MoM (0.6%, 0.5%)
- 08/25 1030 Dallas Fed Mfg Activity (0.9, -1.7)
- 08/25 1130 US Tsy $82B 13W & $73B 26W bill auctions
- 08/25 1515 Dallas Fed Logan Bank of Mexico conf (text, Q&A)
- 08/25 1915 NY Fed Williams keynote remarks Bank of Mexico (text, Q&A)
- 08/25 Building Permits (1.354M, --), MoM (-2.8%, --)
- Source: Bloomberg Finance L.P. / MNI
