/HUF: Rate Corrects Sell-Off From Earlier This Week, HGB/POLGB Yield Spreads Tighten

PLN/HUF snapped an impulsive three-day losing streak yesterday, catching a breather after pulling back from its new all-time peak printed Monday at HUF89.69. The rate creeps higher for the second day in a row and last operates +3 pips at HUF86.69. While the record peak still provides the initial bullish target, bears look for losses past Nov 10/Oct 21 lows of HUF84.96/84.91.

• Polish gov't bond yields have advanced across the curve, moving in the opposite direction than Hungarian yields. Hungary/Poland 10-year yield spread has now tightened to ~177bp, the narrowest level since Dec 6.
• The two CEE countries have been in the spotlight in the past few weeks, owing to their attempts to unblock suspended EU funds. Member states reduced the amount of suspended money for Hungary, which allowed Budapest to avert a worst-case scenario, although it still needs to address the Commission's rule-of-law concerns. Meanwhile, Poland seemed to be on track to secure access to the funds, but works on crucial legislation agreed with the Commission stalled on opposition from the Polish President.