Hungarian Bonds Lose Steam as Iran War Drives Oil Above $100
Updated
Updated · Financial Times · Jul 28
Hungarian Bonds Lose Steam as Iran War Drives Oil Above $100
1 articles · Updated · Financial Times · Jul 28
Summary
Hungarian government bonds, up about 11% this year, have been hit by the recent global sell-off, pushing 10-year yields back up to about 5.5% from a June low near 5%.
Oil briefly topping $100 a barrel as the Iran war flared again has hurt appetite for both emerging-market risk and fixed income, prompting investors to trim crowded bets in Hungarian debt and the forint.
The trade had surged after Péter Magyar’s April election win fueled expectations of EU convergence and eventual euro adoption, helping drive 10-year yields down from above 7% before the vote.
That optimism now hinges on fiscal repair: Hungary’s budget deficit is expected at 7% of GDP this year, and the government is due within weeks to outline consolidation needed for euro-entry rules.
Some funds still see the pullback as temporary, but investors say further gains depend on credible progress toward Maastricht criteria, with euro adoption more likely in the early 2030s than by 2030.