24 Mar 2015
NBH cuts 15bp and likely initiates a short easing cycle - TDS
FXStreet (Barcelona) - With NBH cutting rates by 15bp, Cristian Maggio, Head of Emerging Markets Strategy at TD Securities, feels that this is just the beginning of a short easing cycle, further predicting 30bps cuts in upcoming meetings.
Key Quotes
“In line with the nearly unanimous consensus expectations, the National Bank of Hungary (NBH) cut the base rate today. However, differently from the median of expectations and our forecast, both looking for a 20bp cut, the Bank announced a cut of 15bp, which we think is preparatory to further easing down the line.”
“The EURHUF dropped by 0.3% seconds after the announcement as the market was positioned for a cut today, while 1yr IRS remained nearly unchanged at around 1.79%. The pair is currently trading at 302.”
“We expect another 30bp of easing in total at the two upcoming meetings. The market seems to be priced for an easing cycle of 50bp by August, which suggests a very slow pace. But this also suggests that a moderately dovish message should be fully priced in.”
Key Quotes
“In line with the nearly unanimous consensus expectations, the National Bank of Hungary (NBH) cut the base rate today. However, differently from the median of expectations and our forecast, both looking for a 20bp cut, the Bank announced a cut of 15bp, which we think is preparatory to further easing down the line.”
“The EURHUF dropped by 0.3% seconds after the announcement as the market was positioned for a cut today, while 1yr IRS remained nearly unchanged at around 1.79%. The pair is currently trading at 302.”
“We expect another 30bp of easing in total at the two upcoming meetings. The market seems to be priced for an easing cycle of 50bp by August, which suggests a very slow pace. But this also suggests that a moderately dovish message should be fully priced in.”