HUF: Russia-Ukraine Peace Talks Provides Asymmetrical Risks for HUF
Nov-27 11:18
Given that markets remain sceptical that Russia and Ukraine will agree to any sort of peace deal (Polymarket odds that a deal will be reached by the end of 2025 stand at just 12%), risks to the forint are asymmetrical – a deal would likely see a bigger boost to CEE FX than any weakening on another collapse.
- The sharp move lower for EURHUF on Tuesday followed reports that Ukraine agreed to the US ceasefire plan, and while the move swiftly reversed as it became apparent that Russia would not agree to those terms, it nonetheless highlighted the sensitivity of the forint to the war given Hungary’s reliance on imported Russian energy. Indeed, lower natural gas prices have been a notable forint tailwind this year amid a confluence of other HUF-positive factors.
- At the same time, growing expectations of a Fed rate cut in December – around 20bps priced in compared to ~15bps at the start of the week – has provided a notable tailwind to high yielding EM currencies on the week.
- This dovish shift in Fed expectations has weighed on the greenback, and further downward pressure on the dollar overnight saw the USD Index briefly extend its pull lower from last week’s highs to around 1%. That has helped to maintain the downward trajectory for EURHUF (albeit the dollar has recovered from its worst levels of the day as markets potentially trim positions ahead of the US Thanksgiving holiday), with sights still on support at the 380.00 handle.
- Meanwhile, sell-side analysts have flagged a bullish preference for the forint. Earlier in the week, Morgan Stanley noted that they maintain their short EURHUF positions moving into December while JP Morgan remain long HUF via EURHUF puts. ING say a low probability of peace suggests that CEE FX has more potential to rally in the event of progress, supporting the bullish case for the HUF.
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OUTLOOK: Price Signal Summary - Gold Still In A Corrective Phase
Oct-28 11:14
- On the commodity front, Gold is trading lower as it extends the bear cycle that started Oct 20. Note that the trend is overbought and a deeper retracement is allowing this condition to unwind. Support at the 20-day EMA, at $4045.9, has been breached, signalling scope for a deeper retracement, towards the 50-day EMA, at $3838.2. Key resistance and the bull trigger has been defined at $4381.5, the Oct 20 high. Initial resistance is at $4161.4, the Oct 22 high.
- The latest recovery in WTI futures that started Oct 20, appears corrective. However, note that price has traded through resistance at the 50-day EMA, at $61.13. The breach of this average signals scope for a stronger recovery, despite this week’s pullback so far. Furthermore, a resistance at $62.34, the Oct 8 high, has been pierced. A clear breach of this level would expose key resistance at $65.77, the Sep 26 high. Key support and the bear trigger has been defined at $55.96, the Low Oct 20. First support to watch lies at $59.64, the Oct 23 low.
US 10YR FUTURE TECHS: (Z5) Trend Structure Remains Bullish
Oct-28 11:03
- RES 4: 115-00+ High Oct 1 ‘24 (cont)
- RES 3: 114-21+ 1.00 proi of the Aug 18 - Sep 11 - 25 price swing
- RES 2: 114-10 High Apr 7 (cont) and a key resistance
- RES 1: 113-24/114-02 High Oct 24 / 17 and the bull trigger
- PRICE: 113-16 @ 10:52 GMT Oct 25
- SUP 1: 113-04 Low Oct 27
- SUP 2: 112-26 50-day EMA
- SUP 3: 112-16+ Low Oct 10
- SUP 4: 112-06 Low Sep 25 and a reversal trigger
A bullish structure in Treasuries is intact and recent weakness appears corrective. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would refocus attention on 114-02, the Oct 24 high and a bull trigger. A breach of this hurdle would confirm a resumption of the medium-term uptrend, and open 114-10, the Apr 7 high (cont). Support to watch is 112-26, the 50-day EMA.
EGB SYNDICATION: New 12-Year SlovGB: Revised Guidance
Oct-28 11:01
- EUR Benchmark (MNI expects E1.5-E2.5bln) of the new 12-year Nov-37 SlovGB
- Revised guidance: MS+100 Area (guidance was MS+105 Area)
- Books in excess of E3.1bln
- Coupon: Annual, act/act ICMA
- Format: Reg S CAT1, bearer
- Settlement: Nov. 4, 2025 (t+5)
- ISIN: SK4000028304
- Bookrunners: Citi, CSOB, DB (B&D), JPM
- Timing: May price today
Per Bloomberg / DJ, with MNI color
