HUF: EURHUF at New Session Highs as Focus Remains on Fiscal Risks
EURHUF has risen to a new session high in recent trade, with ongoing weakness across the major equities continuing to weigh on EM currencies. The latest move higher for coincides with a volume surge in Treasuries and USD sales, both of which we don’t see as headline driven.
- Hungarian assets dropped earlier in the week after Orban’s cabinet raised the budget deficit target to accommodate pre-election spending. While the revisions merely put the official forecasts more in line with market expectations, the significance here is mainly in the shift in communication from the government and what this means regarding its commitment to fiscal consolidation and avoiding sovereign rating downgrades.
- We have noted previously that we see rising risks around Hungary's sovereign ratings ahead of upcoming updates from Moody’s (Nov 28) and Fitch (Dec 5).
- Nonetheless, a bearish trend structure for EURHUF remains intact from a technical point of view following the move lower to fresh cycle lows earlier in the week. Sights are on 381.52, the 1.500 projection of the Jan 7 - Mar 21 - Apr 14 price swing, with scope also seen for a test of the 380.00 handle. Initial resistance is at 387.04, the 20-day EMA.
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FRANCE: Le Pen Cannot Stand In Any Snap Election After Court Ruling
The Council of State, France's supreme administrative court, has rejected Marine Le Pen's appeal against her immediate ineligibility to run for political office after she was found guilty of embezzlement in March. The sentence saw the parliamentary leader of the far-right Rassemblement National (National Rally, RN) given four years in prison (two suspended), a EUR500k fine, and, most politically relevant: a five-year ban on running for public office. The Council's ruling that the ban is effective immediately means she cannot run in any snap legislative or presidential election. Le Pen's full appeal hearing takes place from 13 Jan-12 Feb 2026.
- This ruling may have less of an immediate electoral impact, given the prospect of a snap election has receded after PM Sebastien Lecornu delivered concessions to the centre-left Socialist Party in his 14 Oct general policy speech.
- Before her sentencing, Le Pen had been almost a certainty to make the second-round run off, and hypothetical polling showed her performing well against some of the most likely candidates from the centre/left.
- With Le Pen's absence confirmed for now, RN President Jordan Bardella (who will be 31 at the time of the next election due by April 2027) is next in line. It may be too early to try and determine Bardella's prospects in a hypothetical second round. Former PM and centre-right Horizons party leader Edouard Philippe, who has stated his intention to run in 2027, could prove his toughest opponent.
