HUF: EURHUF Rally Gathering Steam, Approaching 410
Oct-31 09:08
Weakness in major equity benchmarks following disappointing earnings reports for Microsoft and Meta overnight has prompted weakness across EM currencies. That has contributed to ongoing HUF weakness, which sits 0.4% lower versus the euro at typing and at a fresh cycle low.
- Weaker-than-expected GDP figures – which saw Hungary fall into a technical recession – underpinned HUF underperformance on Wednesday, bolstering bearish momentum which picked up noticeably at the start of the month.
- EURHUF has now traded higher for seven consecutive sessions, gaining over 2% in that time and breaking several resistance levels along the way. 410.00 marks the immediate target next – an uncomfortable level for policymakers who said at the last NBH meeting that they were "paying close attention" to the level of the forint.
- Option markets continue to move in tandem with rising spot, with the EURHUF vol skew having now shifted 0.3ppts in favour of calls over the past three days. HUF FRAs, meanwhile, have almost completely priced out rate cuts through year-end.
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EUROPEAN INFLATION: September EZ HICP Y/Y In Line W/ Revised Consensus
Oct-01 09:08
Eurozone September flash headline, on a rounded basis, came in in line with consensus on the yearly rate at 1.8% Y/Y (vs 1.7% MNI tracking, 1.8% cons; 2.2% prior). Note that consensus was downwardly revised by 0.1pp following soft French and Spanish data.
- This is the first time headline HICP prints below the ECB's 2% target since June 2021.
- On a monthly basis, inflation came in at -0.1% M/M (vs 0.0% cons; 0.1% prior).
- On an unrounded basis, headline HICP was 1.77% Y/Y and -0.07% M/M.
- Core HICP printed in line with consensus, at 2.7% Y/Y (vs 2.8% prior; unrounded: 2.68% Y/Y, 0.08% M/M).
- Looking at the individual categories: services, energy and core goods were all a tenth lower than expected from the median of the previews that we read.
- Services inflation came in 0.1pp below its August rate, at 4.0% Y/Y, but remained between 4.0% to 4.1% since last November (with the exception of April 2024). It was expected to remain at 4.1%Y/Y from the median of the previews that we had read.
- Energy was the biggest downward contributor (broadly as expected), falling 6.0%Y/Y (the median in our preview was a fall of 5.9%Y/Y) vs -3.0% prior.
- Non-energy industrial goods inflation remained unchanged at 0.4%Y/Y. The median in our preview was 0.5%Y/Y - so this was also marginally lower than expected.
- Food, alcohol and tobacco came in at 2.4%Y/Y - a tenth higher than August.
GILT AUCTION RESULTS: 4.75% Oct-43 Gilt
Oct-01 09:07
| 4.75% Oct-43 Gilt | Previous | |
| Amount | GBP2.25bln | GBP2.00bln |
| Avg yield | 4.421% | 4.372% |
| Bid-to-cover | 3.27x | 3.37x |
| Tail | 0.1bp | 0.2bp |
| Avg price | 104.201 | 104.871 |
| Low price | 104.189 | 104.847 |
| Pre-auction mid | 104.096 | 104.745 |
EURIBOR: EURIBOR FIX - 01/10/24
Oct-01 09:03
Source: EMMI/Bloomberg
- EUR001W 3.3280 -0.0550
- EUR001M 3.3300 -0.0230
- EUR003M 3.2520 -0.0270
- EUR006M 3.0920 -0.0130
- EUR012M 2.7490 0.0020
