NBH Poised to Continue Easing Amid Stable FX and Global Pressures
ING expects the National Bank of Hungary to deliver a 25bp cut to 5.75%, pressing on with its easing cycle after restarting in June and signalling further moves in July and August. A new forecast is due in September, when the NBH is expected to reassess its next steps. June inflation undershot the central bank’s projection, and the governor described EUR/HUF around 355-360 as stable, pointing to unchanged rhetoric even as FX and rates face global pressure.
Market Reaction, Outlook, and Asset Performance
The sell-off in HUF assets has been described as the largest since the April general elections, though ING attributes the move to positioning rather than weaker fundamentals. Markets are pricing slightly more than 75bp of easing including the latest meeting, with a terminal rate between 4.75% and 5.00%. ING forecasts the policy rate at 5.00% this year and 4.00% in 2028, arguing that a global stabilisation could see the sell-off fade. Hungarian assets have underperformed within CEE and across emerging markets, and the market has already priced out a large share of expected cuts.
