EM FI/FX Strategy: EEMEA: Three things to watch in the coming week

Research evidence excerpt

EM FI/FX Strategy: EEMEA: Three things to watch in the coming week

Global Research

20 July 2026ab

EM FI/FX Strategy Emerging Markets

Emerging MarketsEEMEA: Three things to watch in the coming

week Nimrod Mevorach

Strategist

nimrod.mevorach@ubs.com

+44-20-7567 0779

Hungary: NBH to cut (Tue); watch guidance for Aug; is EURHUF a fade? Gyorgy Kovacs

UBS expects the NBH to cut the policy rate by 25bps in line with the unanimous Economist

Bloomberg consensus. Headline inflation fell further in June (to 1.7% yoy) -- well below gyorgy.kovacs@ubs.com

+44-20-7568 7563

the 3% target helped by services - leading governor Varga to reiterate its previous

guidance for rate cuts over the summer. Varga's post-meeting guidance is a source of Anna Zadornova

possible HUF and rates vol, after rates markets trimmed expectations for a possible Economist

sequential rate cut at the next meeting in Aug (2x5 and 1x4 FRAs gap narrowed to 5bps anna.zadornova@ubs.com

+44-20-7567 4212

vs 15bps a week before) as a result of higher oil prices and the rally in EURHUF. What

about the forint? NBH data show that foreigns long-HUF forward positioning was at a

multi-year high in late-June (about EUR1bn more than at the time of the Apr elections).

We think that recent HUF underperformance is largely driven by unwinds of such

positions amid carry erosion and as investors don't expect major announcements on the

fiscal/eurozone path before 4Q26. We stick to PLNHUF shorts with a target of 81 and see

value in tactically selling EURHUF on possible spikes to post-elections highs of 368.

Turkey: Will the CBT cut or wait (Thu)? Moody's review (Fri); stay long TRY

The Bloomberg consensus expects the CBT to keep the one-week repo at 37% this

week.