Hungary's MNB likely to hold its rate unchanged

Today's MNB's meeting is unlikely to change its bank rate. The MNB is expected to hold its rates unchanged at 1.35%. The market is eagerly waiting for minutes of MPC meeting that whether it will give any indication of further easing in near future. 

From an FX trading point of view this indicates that maintaining short HUF positions are preferably versus the USD, and this will be a favoured trade. Likewise, from an IRS view point receiving longer end purpose is the obvious trade.

"At present markets do not price in an aggressive easing cycle. 9x12 FRA's currently trade around 1.28%, which hardly discounts any significant easing from MNB, but we remain of the view that ultimately further easing is likely to manifest", says Commerzbank.