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Goldman Sachs Retain Dovish View on Hungarian Rate Prospects

HUNGARY
  • Goldman Sachs write that today’s CPI release marks the sixth consecutive downside surprise to consensus expectations and the second month for which inflation is within the NBH target range.
  • They expect headline inflation to decline below the mid-point of the NBH’s target range in the coming months – in contrast to both the Bloomberg consensus and the CB themselves. GS maintain a strongly dovish view on Hungarian (and CEE-3) rate prospects but the ‘binding constraint’ on the pace of the NBH’s rate reduction continues to be the HUF.

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