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Hungary-Germany Yield Spread Swells on Boosted '24 Issuance

HUNGARY
  • EUR/HUF trading at new daily lows, returning to the week's lowest levels and trading within range of the Friday lows at 393.12.
  • Local currency strength comes despite the uptick in the 2024 issuance plan - with headline issuance now totalling HUF 11.6trl, a rise of 13% from initial estimates as the finance ministry's forecast for the budget deficit this year was lifted after a poorer outlook in January/February.
  • The headlines have weighed on the local currency bond market, boosting yields across the curve, but the move is most concentrated in the belly of the curve, with 5y yields higher by over 8bps on the day. This presses the 5yr German-Hungary yield spread clear of 450bps for the first time this year.

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