Hungary 10-yr bond yields rebound from historic low
Portfolio has voiced concern that anyone can get indebted at negative yields as the bond market is in complete upheaval. A correction was to be expected, and Germany led the way this week as 10-year yields rose 20bp, although still remaining negative at -0.55%, while 30-year yields rose above zero.
This also affected the Hungarian market, and 10-year yields quickly rose to 2.2% from the record low of 1.5% seen just three weeks ago.
On the yield curve, this trend is seen mostly at the longer maturities, 5 and 10 years, as shorter reference yields have barely moved.
As mentioned earlier, the yields are primarily moved international trends, so there has been a comparable rise in yields across the CEE region. It is interesting to note, however, that the amplitudes have been much bigger in Hungary. Just a few weeks ago, we boasted a 10-year yield lower than Poland's, which has now turned around as Poland's 10-year reference yield is at 2.1%, some 10bp lower than Hungary's.
The European Central Bank's decision this afternoon will also have an impact on the bond market. If the ECB announces another asset purchase scheme, it will push yields in the euro area lower, which could make its effect felt in Hungary as well.
Cover photo: MTI/ László Róka
