This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Emerging-Market Central Bank Preview

Hungary, Tuesday, 13:00 GMT: We agree with the majority of analysts, who expect the MNB to continue tightening by 50 basis points, but the chance of a surprise has increased a lot in recent days.

If it were not for the currency risks, the central banks would be on an easing path. Economic numbers have generally come on the weak side and are expected to worsen substantially this year given the declining confidence in the economy and likely credit contraction by banks.

Positive sentiment toward the forint continues on more supportive comments about Hungary's prospects of getting an agreement with the IMF, but we do not think it is enough to change the central bank's cautious stance.

There is a long road from here until an actual agreement is reached, and sentiment toward HUF could change quickly with just one negative headline.

In the near term, however, we still see EUR/HUF testing the 300 level should risk appetite hold up, and it could be a good level to establish new longs given our skepticism about Hungary.

Thailand, Wednesday 07:30 GMT: The combination of weaker global demand and the protracted economic impacts of the floods are likely drive Thailand's central bank to deliver another cut of 25 basis points, to 3.00%, at Wednesday's meeting.

Recent comments from Governor Prasarn support this view. However, it is possible that the bank will adopt a wait-and-see approach after this meeting.

The bank recently increased its 2012 GDP forecast from 4.1% to 4.8% on the back of expected stimulus from government reconstruction spending.

Moreover, inflation pressures remain relatively high, though lower import prices will help cap the upside.

USD/THB has come sharply lower along with other regional currencies after failing to break the 32.0 level a few weeks ago. The next key level to watch would be the 50-day moving average at 31.32.

With China likely avoiding a hard landing this year, we remain constructive on the stronger regional emerging-market credits such as Thailand.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.30 0.42%
FB $104.24 -1.15%
GOOG $742.60 -1.02%
TSLA $230.26 -0.58%
YHOO $33.81 2.64%


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs