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27 Jan 2015
Looser for longer in Hungary? – TDS
FXStreet (Edinburgh) - Analyst Paul Fage at TD Securities assessed the decision by the NBH to leave rates unchanged in today’s meeting.
Key Quotes
“According to the press statement, economic conditions have shifted towards an alternative scenario which would imply looser monetary policy. However, the move is obviously not deemed sufficient to justify a cut in rates”.
“Our central scenario is that the policy rate will remain on hold for the rest of this year, but we see clear risks to the downside”.
“The Hungarian FRA curve is implying cuts of up to about 40 bp by the middle of this year”.
“We feel that, while the curve might be pricing in a higher probability of cuts than we think it should, it is not too unreasonable”.
Key Quotes
“According to the press statement, economic conditions have shifted towards an alternative scenario which would imply looser monetary policy. However, the move is obviously not deemed sufficient to justify a cut in rates”.
“Our central scenario is that the policy rate will remain on hold for the rest of this year, but we see clear risks to the downside”.
“The Hungarian FRA curve is implying cuts of up to about 40 bp by the middle of this year”.
“We feel that, while the curve might be pricing in a higher probability of cuts than we think it should, it is not too unreasonable”.