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Germany's Bundestag has passed the Digitalization of Financial Markets Act, enabling the full implementation of the EU's MiCAR cryptocurrency regulation before its December 30 deadline. This legislation designates BaFin as the regulator, allowing German firms to operate under MiCAR while establishing a one-year transition period for existing licenses. Meanwhile, varying transition periods across EU countries necessitate that crypto asset service providers secure new authorizations promptly to avoid operational disruptions.
Inflation in Hungary accelerated for the second consecutive month, driven by rising food and service costs alongside a significant decline in the forint, which has reached a two-year low. Consumer prices increased by 3.7% in November, up from 3.2% in October, aligning with economists' forecasts. Month-on-month, prices rose by 0.5%.
Bondholders of Nitrogenmuvek Zrt, a Hungarian fertilizer manufacturer, are preparing for a €200 million bond maturity in May. They have engaged law firm Hogan Lovells for advice on refinancing and have recently evaluated pitches from financial advisers.
Moody's has revised ratings for major Hungarian banks, upgrading Raiffeisen Bank's Baseline Credit Assessment to 'baa3' due to improved financial performance. K&H Bank's rating was affirmed at 'ba1', while the Hungarian Development Bank's rating remains 'Baa2', reflecting state support. However, a negative outlook was assigned to the long-term deposit ratings of Erste, K&H, Raiffeisen, and MFB, citing concerns over Hungary's economic outlook.
Prime Minister Viktor Orban has threatened to veto the European Union's next long-term budget unless Hungary's frozen funds are released, citing concerns over rule-of-law and corruption. The budget, covering 2028, requires unanimous approval from all 27 member states, and Orban has a history of obstructing joint decisions, although other nations are exploring ways to bypass his objections.
Private markets are navigating a challenging fundraising environment, with dry powder at its lowest since 2021, despite a stable macroeconomic backdrop and strong equity markets. Investor sentiment remains subdued, yet the reduced competition for deals presents an opportunity for high-conviction allocations as we approach 2025.
Despite a 10% increase in cultivation area, the EU's soybean harvest fell to just under 2.8 million tons, about 10,000 tons less than last year, primarily due to unfavorable growing conditions, particularly in Romania and Hungary. Italy remains the top producer, yielding 1 million tons, while Ukraine's record harvest of over 6 million tons helped offset EU losses. The EU's self-sufficiency in soy stands at only 8%, with certified Ukrainian soy filling the gap.
Slaughter pig markets in the EU are stable ahead of Christmas, with prices holding steady in Germany at €1.92/kg and Austria at €1.86/kg. Italy sees a decline, with prices dropping to €1.933/kg for freely marketed pigs. Overall, demand is expected to rise, but significant price increases have yet to materialize.
Hungarian Prime Minister Viktor Orban has nominated his finance minister, Mihaly Varga, to lead the National Bank of Hungary starting in March, following the end of Governor Gyorgy Matolcsy’s term. Orban is also expected to consolidate economic policy under a "superministry" by appointing Marton Nagy as finance minister, although this has not been officially confirmed.
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