The 25 bp base rate hike by the US Fed could trigger some weakening of EMEA currencies (including HUF) today as the risk premium of these markets contracts. Additionally, there are local press speculations (mainly by Magyar Nemzet) that 1Q06 budget deficit in Hungary could exceed the Finance Ministry’s target by HUF 100bn, pushing the quarterly budget gap to 51.6% of the annual target, versus the scheduled 45.1%. The Finance Ministry will publish the March budget deficit figure on 5-7 April.