analysis

Good Morning Treasury! - April 19, 2024

Markets, economy

Yesterday remained tough, as the conflict in the Middle East continues. The Nasdaq was down 0.5%, the S&P 500 was down 0.2%, but the Dow closed up slightly higher (+0.1). The Eurostoxx 600 index was up 0.2%, but opens in a bad mood this morning, down around 0.8% just before 10am. The BUX index closed yesterday slightly in the red and continues this morning, down around 0.2%.

EURUSD

On Thursday, important data on the economic outlook overseas were released, leading companies to be very optimistic about the prospects for economic activity. This foreshadows a tighter labour market, inflationary pressures, and a higher interest rate environment, which allowed the dollar to strengthen against the euro yesterday. Earlier today, Israel launched a missile strike against Iran, which worsened investor sentiment and the EUR/USD exchange rate fell to 1.0600. Since then, the exchange rate has bounced and is currently trading around 1.0640.

EURHUF, USDHUF

The EUR/HUF exchange rate is currently hovering around 394.50, having risen to 396 in the early hours of the morning after the conflict in the Middle East escalated into renewed bombing. For now, however, it is encouraging to see forint buyers starting to appear near the 400 level and have pushed the exchange rate back below 395 each time so far. With the current geopolitical tensions, next week's MNB rate decision meeting will be critical. The forint is trading around 370 against the dollar.

Commoditites

Oil prices jumped today after yesterday's minor movement as news of Israel's attack on Iran rattled markets and raised concerns that oil supplies to the Middle East could be disrupted. Brent is currently trading at $88.0 a barrel and WTI at $83.8 a barrel.

Macro calendar

No important macro data is expected today.