Commerzbank’s Tatha Ghose highlights that Hungary’s election delivered a supermajority for Peter Magyar’s Tisza party, easing transition risks and opening scope for structural reforms. While global war-related volatility may limit immediate gains, the bank notes EUR/HUF has already traded near 365 and signals a downward revision from its previous 380 end-June forecast, implying a stronger Forint profile.

Political shift and FX repricing

"Yesterday, the Hungarian electorate voted overwhelmingly for regime change: Peter Magyar’s opposition Tisza party (is assumed to have) garnered a supermajority in parliament – with roughly 69% of the parliamentary mandate compared with 28% for Orban’s Fidesz – which will allow it to deliver on bold promises to dismantle the erstwhile right-wing “illiberal system”."

"Of course, the supermajority will give him a more credible opportunity to start from a blank slate, and hence, the outcome will likely turn out to be more positive than our base-case in which Tisza would have won a simple majority."

"In our preview, we wrote that EUR/HUF could reach 365 after elections, if the Iran war situation were to permit."

"Hence, the benefit to the forint may or may not fully materialise against a more volatile global backdrop."

"Regardless, we will be revising our EUR/HUF forecast level downward from our forecast 380 for end-June."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)