HUNGARY: MNI NBH Preview – December 2025

An extension lower in crude oil markets, a move away from highs in European equity index benchmarks and comments from the French Finance Minister, suggesting that he is “fairly confident” parliament will approve the French Budget all factor into the uptick in EGBs seen in recent trade. 

• Note that OATs have extended their outperformance vs. Bunds since Finance Minister Lescure spoke (10-Year OAT/Bund spread now 3bp tighter on the day), suggesting that has been more of a meaningful driver for EGBs than the pullback from highs in equities (this idea gains further credence as peripheral spreads have also tightened a little since the headlines crossed, as opposed to widening on the equity downtick).

• The Swiss franc is extending earlier upside pressure following optimism on a looming trade deal with the US. Details of the deal remain sparse for now, with a "technical agreement" seemingly achieved according to NZZ, with a 15% headline tariff being floated by earlier source reports but signoff from US President Trump outstanding. Official announcements from the Swiss side would only be expected after Trump approval.
• Uncertainty would remain even after a potential official announcement, as the deal will only be a joint declaration of intent according to NZZ, not a binding contract. This was also the case with the US - EU deal earlier this year - which prompted renewed discussions on exact terms soon after. Additional questions are around any concessions the Swiss government would have made to the US administration.
• EURCHF (-0.35%) continues to edge lower to 0.9238, keeping the extremely significant support cluster between 0.9206-22 in high focus for those looking for a break to the lowest levels since the peg removal in 2015. CHFJPY meanwhile has gained 2.4% over the last four sessions, seeing fresh all-time highs at 194.04.

• Sterling weakness continues to standout on Wednesday, exacerbated on an intraday basis by the earlier internal criticism of the current leadership from a senior Labour party member. GBPUSD has slipped 0.35% on the day to the 1.3100 mark in recent trade, with the modest bid for the greenback adding weight to the price action.
• It is worth highlighting the earlier noted option expiries today, with 1.88 billion rolling off at 1.31 for the NY cut. These may have had a magnetic effect and could halt the downside momentum over the next hour.
• More notable is price action for the cross, with EURGBP rising a further 0.28% to fresh cycle highs of 0.8833, the strongest level since May 2023. Spot is currently testing an old high, located at 0.8835.
• Once again, dips have remained very well supported around the prior breakout level at 0.8769, highlighting the dominant uptrend. The next topside target remains at 0.8875, the April 2023 high.