EMEA: Hungary on hold

The NBH is expected to keep policy rate unchanged in its MPC meeting on Tuesday. The NBH is likely to keep rates stable for a while, as it has recently been loosening monetary conditions through additional quantitative easing. 

"Although Q3 growth fell short of consensus and has moderated to 2.3% y/y, from 2.7% y/y in 2Q, we do not think this will change the NBH's stance", says Barclays.

Although more unconventional policy measures by NBH are likely to weigh on the HUF in the near term, an extension of ECB QE would likely be a positive catalyst for the currency, as it could attract foreign inflows to local bonds. Furthermore, prospects of a rating upgrade in 2016 and likely positive comments from ratings agencies would be supportive in the medium term.