MNB shifting to cuts, Turkey bracing for election result

The Hungarian central bank (MNB) looks set to take its first steps towards lowering interest rates at its meeting next week by cutting the upper end of its interest rate corridor. Policymakers will probably guide short-term interest rates lower over the second half of this year, but we think there is less scope for interest rate cuts than most expect in 2024. Elsewhere, polls suggest that Turkey’s election race is currently too close to call, but investors appear to be increasingly pricing in a sharp rise in interest rates before long.