Hungary's policymakers have suggested that there is no requirement for further rate cuts, as unconventional easing is unlikely to bring major benefits when it comes to supporting growth. The central bank estimates 1.7% average inflation in 2016 (based on a US$48/bbl oil price assumption).

Poland's 2H15 inflation print failed to impress the markets as Brent and food prices declined. Despite having a steady domestic demand environment and real wage growth core inflation failed to rise, disappointing market expectations.

Inflation alone is not sufficient to convince policymakers in the regions to take a call on cutting rates. However, further decline in CPI helps these central banks to rationalize their preference for additional easing.

"We think that in March the NBH will consider cutting the base rate as part of the monetary easing mix. Also in March, the NBP's 1.1%oya 2016 inflation forecast (we expect 0.2%oya) ..........This should provide the rationale for the new (and likely more dovish) MPC to cut rates" - JP Morgan