'Spectacular day' for Hungary's bonds - BNP

History

Hungarian government bonds extended the world’s biggest rally in the past week after Prime Minister Viktor Orbán’s pledge to meet budget targets added to bets the central bank will cut interest rates, reports Bloomberg.

“Hungarian government bonds had a spectacular day yesterday,” BNP analysts led by Bartosz Pawlowski in London said in a research report today. “We think there’s more to go because a strong commitment of the government to deliver on its targets will probably amplify bets on interest rate cuts.”

The yield on government notes maturing in November 2017 fell three basis points, or 0.03 percentage points, to 6.983%. That compared with 7.797% on August 5 and marked the lowest yield since June 15.

“Against this kind of backdrop, the National Bank of Hungary may be unable to lower interest rates, despite slower growth and a reasonably benign inflation environment,” the Morgan Stanley analysts said. “This is because the risk environment remains a key variable.”

The Magyar Nemzeti Bank left borrowing costs at 6% for a sixth month on July 26 as focus shifted from inflation to the impact of Europe’s debt crisis on the economy. Policy makers said they planned to leave borrowing costs unchanged for an “extended period.”

ADVERTISEMENT

Consumer price levels below EU avg in 2020 Analysis

Consumer price levels below EU avg in 2020

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Breast cancer screening at Dr. Rose Private Hospital Interview

Breast cancer screening at Dr. Rose Private Hospital

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.