HUNGARY: MNI NBH Review – May 2025
May-28 09:59
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- The National Bank of Hungary decided to keep the base rate unchanged at 6.50%, maintaining a hawkish tilt to its communication despite the slowdown in headline inflation in April.
- Guidance from Governor Mihaly Varga continues to indicate that rates will likely remain on hold for an “extended period”, as was expected prior to the meeting.
- Among sell-side, views are mixed over whether the NBH will have room to restart rate cuts later in the year.
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OUTLOOK: Price Signal Summary - Corrective Cycle In EUROSTOXX 50 Futures Intact
Apr-28 09:53
- In the equity space, the corrective bull cycle in S&P E-Minis that started on Apr 7, remains in play. The contract traded higher last week and breached a number of important short-term resistance points. Price has cleared the 20-day EMA and pierced 5528.75, the Apr 10 high. The next key resistance is 5622.38, the 50-day EMA. A clear breach of this EMA would strengthen a bull theme. Initial key support lies at 5127.25, the Apr 21 low. A break would be bearish. First support lies at 5355.25, the Apr 24 low.
- EUROSTOXX 50 futures are holding on to their recent gains. The contract has cleared the 20-day EMA and pierced resistance at the 50-day EMA, at 5101.10. A clear break of this average would strengthen the current bull cycle and signal scope for a continuation of the corrective uptrend. This would open 5165.00 next, the Apr 3 high. On the downside, support to watch lies at 4812.00, the Apr 16 low. Clearance of this level would highlight a reversal. First support lies at 4959.00, the Apr 23 low.
NOK: Danske Bank Recommend Paying Sep25-Mar26-Sep26 NOK FRA
Apr-28 09:50
On Friday, Danske Bank recommended paying the Sep25-Mar26-Sep26 NOK FRA butterfly spread, after taking profit on previously held short-term NOK received positions. They entered the trade at an indicative mid of -41bps, with a soft target of -15bps and a hard stop-loss of -54bps.
- “We think the short-end received case has run a little too far, which in isolation also reduces the attractiveness of NOK steepeners…markets are now close to fully pricing a cut by June and an accumulative three cuts by year-end and 105bp by March 2026”.
- “Should the global situation re-escalate NB would stand ready to cut similar to March 2020. However, with the latest Trump administration news flow and the weakening of the NOK FX we no longer like the risk/reward of our received positions”
- “The [butterfly] trade is a direct expression of our view that it is difficult to price in more cumulative NB easing into the March 2026 FRA contract unless the global situation deteriorates further”.
- “The biggest risk for the position is if the global economy keeps up but enters a global recession this autumn”
EGBS: Bunds Soften Amid More Sanguine Risk Backdrop
Apr-28 09:41
Bund futures are -36 ticks at 131.23, with global risk sentiment exhibiting a more sanguine tone this morning ahead of a heavy data schedule later this week. Futures are in consolidation mode and continue to trade just below their recent highs, with the 20-day EMA at 130.64 providing initial support. On the topside, focus remains on 132.03, the April 7 high and the bull trigger.
- The German curve has lightly steepened, with 30-year yields up 5bps and 5s30s +1.7bps at 88.7bps, still some way off the April 9 multi-year high of 96.5bps.
- This morning, the EU held its first ever triple-line EU-bond auction, with E5.056bln of 5/10/15-year EU-bonds sold. Meanwhile, Belgium will sell E2.8-3.2bln of OLOs at 1100BST.
- 10-year EGB spreads to Bunds are up to 1.2bps wider on the session.
- ECB’s Rehn and De Guindos are scheduled to speak at 1400BST today.
- This week’s heavy Eurozone data calendar includes flash inflation prints for April and a first look at Q1 GDP across member states. MNI’s inflation preview will be released this afternoon.
