KBC Market Research Desk
KBC Bank
Headlines
NBH predictably keeps rates unchanged
New data and central bankers´ comments support PLN
As expected, the Hungarian central bank kept its key interest rate unchanged at the all-time low of 2.1% yesterday. Nor the accompanying statement brought a surprise. In the statement, the NBH reiterated its view that the current base rate was consistent with the medium-term goal of price stability and provided adequate support to the real economy. This view is in line with our outlook of stable rates till the end of this year at least. Next year, however, the situation may change. First, the debt-to-GDP ratio will not have to be controlled as strictly as it was the case this year. Secondly, ahead of conversion of FX denominated mortgages at pre-set conversion rates, a weaker forint might be desirable. So far, the Hungarian forint has been little affected by yesterday´s NBH meeting and has hovered within a narrow range close to its previous level.
In contrast, the Polish zloty firmed by 0.4 % yesterday, after central banker Jerzy Hausner cooled expectation of further rate cuts. Mr. Hausner, who is considered a swing voter in the MPC, said yesterday that Polish interest rates were at the adequate level and may be lowered further (only) if economic growth weakened. Also Elzbieta Choja-Duch, one of the most dovish members of the NBP leadership, has recently spoken against additional rate cuts. The two statements, though, contrast with Marek Belka’s comments of Monday, when the Governor expressed his worries about business hampering effect of a stronger zloty. In any case, yesterday’s better than expected data (retail sales rising by 2.3 % and unemployment falling to its 5-year low of 11.3 %) support stable interest rates.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.