Going uphill

Optimism was reigning in the financial market early autumn. The recession is finally over in the USA. Billions of dollars printed in the last 5 years put the stock exchange index in uphill mode, the processing industry is booming and the index reached a 3.5-year high. The European Central Bank decided to cut interest rates further. Europe’s two biggest economies, France and Germany seem to feel a bit weak. In Hungary the government now wants to settle accounts with banks and the courts are already delivering 1st-instance decisions against banks. The question is: how and when this strategy will fire back? Since the forint got weak against the dollar, import will become much more expensive. In June the level of both export and import augmented. There is a good chance that the government will save indebted households after the local elections. One of the government’s goals is to change the country’s banking system drastically, which may be followed by a considerable weakening of the forint.