Secondary fixed income yields continued  to  decline on Monday as the Monetary Council of central bank MNB lived  up  to  market  forecasts  of  a  25  basis  point  rate cut.
Benchmarks  rates in maturities of up to three years were down 3-8 basis points,  while  yields  in  longer  maturities  declined  13-14  bp, the Government Debt Management Agency (AKK) reported.
     The  fall  in yields must have come as a surprise to some analysts, who had  expected  yields  to  correct  upward  by  10-15  bp  after the decision, given that a cut of over 50 bp had been priced in by the yield curve prior  to  the decision. While MNB head Zsigmond Jarai did not say with absolute  certainty  that  the rate cut cycle will continue at this pace, Raiffeisen Securities cites market opinions that foresee rate cuts
totaling up to 150 bp within the next 12 months.
     According   to   DZ  Bank  analysts,  prospects  for  further  rate reductions  should  keep  rate  cut hopes alive, preserving value in the short and  intermediate  segments  of  the  curve  up  to  the five-year maturity over the next six months.