Morgan Stanley Sees 10BPS Hungary Rate Cut Tues

0837 GMT [Dow Jones] Morgan Stanley thinks there would be very good reasons for the Hungarian central bank to sit on its hands at next week's rate-decision meeting, but low inflation and recent dovish comments from several central bankers suggest that a rate cut is more likely, it adds. Therefore, it expects Hungary to lower rates by 10bp, to 2.40% May 27, from the current record low of 2.50%. Economist Pasquale Diana notes that April's negative headline inflation reading of -0.1% on the year surprised Morgan Stanley, financial markets and most likely the National Bank of Hungary as well, to the downside, and will likely prompt the central bank to revise in June its 2014 average CPI forecast downward to around 0.2%-0.3% on the year, from the current 0.7%. (margit.feher@wsj.com @margitfeher)

 
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(END) Dow Jones Newswires

May 23, 2014 04:37 ET (08:37 GMT)