Hungary: rate cuts are in view

Stubbornly high inflation and concerns about a weaker exchange rate mean that Hungary’s central bank (MNB) will keep its powder dry in the next few months. But we think that inflation will ease over the first half of 2021, which should create scope for policymakers to reduce short-term interest rates.   WEBINAR INVITE: To mark the upcoming launch of The Long Run, our dedicated long-term service, we’re holding a special webinar on 11th February to discuss how we see economies and markets performing out to 2050. Complimentary registration here for either of two sessions.
Bethany Beckett Assistant Economist
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Emerging Europe Economics Focus

Turkey’s “new economic model” to amplify old problems

The “new economic model” adopted by Turkey’s government is likely to mean low real interest rates and a persistently weak lira, but it will come alongside a shift towards capital controls, ever higher inflation and growing fiscal and banking sector risks. Drop-In: Jason will be discussing Turkey's mounting economic risks in a 20-minute online session on Thursday at 09:00 ET/14:00 GMT. Register here.

18 January 2022

Emerging Europe Economics Update

The implications of the Russia-Ukraine crisis

The deadlocked end to talks between Russia, the US and NATO and subsequent hawkish noises from Russian officials have caused a risk premium to emerge on Russian asset prices and will keep the prospect of tighter Western sanctions on the table. The downside risks for the ruble and Russian assets are building, as are the upside risks for European natural gas prices. In view of the wider interest, we are also sending this Emerging Europe Economics Update to clients of our Commodities Overview, Energy, FX Markets and Global Markets services.

14 January 2022

Emerging Europe Economics Weekly

Russia-NATO talks crumble, CBRT’s reserves plunge

A tense week of negotiations between Russia, the US and NATO have ended with what now seems to be a more serious ratcheting up of tensions over Ukraine. It seems like that Russia’s recent belligerent tone may be an increasing sign of things to come, which is met by a rising threat of Western sanctions, weighing on Russian and Ukrainian financial markets. Meanwhile, Turkey's net FX reserves plunged to just $7.8bn last week, providing an even more pitiful backstop in the event that banks and corporates struggle to roll over their large external debts.

14 January 2022

More from Bethany Beckett

Capital Daily

US payrolls and Treasury yields

Although the 10-year Treasury yield hardly moved after today’s release of the US Employment Report for June, we still expect it to resume its rise before long.

2 July 2021

FX Markets Update

Weighing up the prospects for the NOK

We think that the Norwegian krone will continue to strengthen against the euro over next year or so. This is despite our forecast for a pull-back in oil prices and reflects our view of the relative prospects for monetary policy in Norway and the euro-zone.

1 July 2021

Capital Daily

We think that returns from US corporate bonds will underwhelm

US corporate credit spreads have reached post-Global-Financial-Crisis (GFC) lows in recent weeks. So, despite our forecast for a healthy US economy, we expect US corporate bonds to outperform Treasuries only very slightly.

22 June 2021
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