The Hungarian forint firmed slightly on
Monday as an outcome of the first round of
the parliamentary election opened a way to
the most market-friendly scenario – a
coalition of the currently ruling Socialist and
Free Democrats. This post-election scenario
was also boosted by a split of opposition
parties as the small conservative party, the
Democratic Forum, refused to cooperate
with the main opposition party Fidesz ahead
of the second round of the elections.
Interestingly, the forint shrugged-off very
poor March’s public budget figures, which
were released at the end of the session (for
more see the News section). It seems that
the budget overshooting had been
completely priced in after the local press
reported that a much higher-than-expected
deficit would come.
Regarding trading, although the EUR/HUF
pair opened much lower compared to
Friday’s closing levels, the pair was
surprisingly stable throughout the session.
EUR/HUF was actually moving in the tight
range of 266.25-267.30.
Today, besides comments coming from the
domestic politics the forint will definitely
watch a reaction of the domestic bond
market to the March inflation figures. Since
the released figure came above the market
consensus, the reaction should be neutral or
slightly negative. Hence, no big news for the
forint. .
Forint surprisingly stable after the first
round of the parlimentary elections.
(CSOB - Investment research)