Negative sentiment hit the forint as well as the Hungarian bonds on Friday

The sell-off of high yielding assets stopped short Thursday’s recovery on both markets. Negative sentiment pushed the forint from 257 EUR/HUF to two-year low (to nearly 260 EUR/HUF) on Friday. In the afternoon the forint shortly firmed but due to strong U.S. payrolls lost again. Negative regional sentiment together with long-term macroeconomic imbalances and April’s election act against the forint and bonds. The forint as well bonds remains vulnerable and highly sensitive on core markets trends in the short term.

Today we expect the EUR/HUF may stay below 260 because higher yields and weak forint may attract some investors.

(CSOB - Investment research)