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22 Jun 2015
CBR and NBH looking at opposite directions – TDS
FXStreet (Edinburgh) - Strategists at TD Securities expect different monetary policy outcomes at this week’s central banks’ meetings.
Key Quotes
“In line with the almost unanimous consensus, we expect the NBH to cut its policy rate by another 15bps to 1.50%”.
“May CPI inflation surprised to the upside at 0.5% Y/Y and was running about 0.5% above the forecast in the March Inflation Report. With the June Inflation Report to hand, it is possible that the MPC changes the language in the accompanying press statement, suggesting either that the easing cycle has ended or, more probably, that additional rate cuts will be more moderate and/or data dependent”.
“In Turkey, we expect the CBRT to keep all its key rates on hold”.
“Although headline and core inflation have been moving up in recent months, as have inflation expectations, we see the CBRT waiting to see how the political situation develops”.
“We may read a statement that reflects less political interference and, if a stable-looking coalition is formed, then this would likely lead to a rally in the lira, which would ease the near-term pressure for hikes. On the other hand, if no coalition can be formed and new elections have to be held, this would prompt a sharp selloff in the lira, forcing the CBRT to hike”.
Key Quotes
“In line with the almost unanimous consensus, we expect the NBH to cut its policy rate by another 15bps to 1.50%”.
“May CPI inflation surprised to the upside at 0.5% Y/Y and was running about 0.5% above the forecast in the March Inflation Report. With the June Inflation Report to hand, it is possible that the MPC changes the language in the accompanying press statement, suggesting either that the easing cycle has ended or, more probably, that additional rate cuts will be more moderate and/or data dependent”.
“In Turkey, we expect the CBRT to keep all its key rates on hold”.
“Although headline and core inflation have been moving up in recent months, as have inflation expectations, we see the CBRT waiting to see how the political situation develops”.
“We may read a statement that reflects less political interference and, if a stable-looking coalition is formed, then this would likely lead to a rally in the lira, which would ease the near-term pressure for hikes. On the other hand, if no coalition can be formed and new elections have to be held, this would prompt a sharp selloff in the lira, forcing the CBRT to hike”.