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20 Apr 2015
NBH expected to cut rates tomorrow – TDS
FXStreet (Edinburgh) - Paul Fage, Strategist at TD Securities, believes the NBH could announce further rate cuts in tomorrow’s meeting.
Key Quotes
“HUF has weakened recently against EUR following the announcement that the European Commission was suspending payment of HUF 700bn of development funds. Yet EURHUF is down 4.9% from the start of the year, and, if anything, the MPC is concerned about it moving even lower given the backdrop of the on-going ECB QE program”.
“So we expect the NBH to continue easing, cutting the base rate by another 15 bps to 1.80%. The consensus also expects a 15 bps cut with just 2 out of the 23 economists surveyed by Bloomberg expecting a cut of only 10 bps”.
“We expect the NBH to keep easing until the base rate reaches 1.50%. Including tomorrow’s meeting, the FRA curve is currently discounting about 40 bps of rate cuts, close to the 45 bps in total that we are expecting”.
Key Quotes
“HUF has weakened recently against EUR following the announcement that the European Commission was suspending payment of HUF 700bn of development funds. Yet EURHUF is down 4.9% from the start of the year, and, if anything, the MPC is concerned about it moving even lower given the backdrop of the on-going ECB QE program”.
“So we expect the NBH to continue easing, cutting the base rate by another 15 bps to 1.80%. The consensus also expects a 15 bps cut with just 2 out of the 23 economists surveyed by Bloomberg expecting a cut of only 10 bps”.
“We expect the NBH to keep easing until the base rate reaches 1.50%. Including tomorrow’s meeting, the FRA curve is currently discounting about 40 bps of rate cuts, close to the 45 bps in total that we are expecting”.