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Term Structure: Shifted Higher in Hungary, Flatter In Czech R. and Steeper in Poland

EMERGING MARKETS
  • Interest rates in Hungary have risen in both the short-end and long-end of the curve, resulting in an upside shift in the term structure as NBH continues its tightening policy.
  • In Poland, volatility has risen in the long-end of the curve (following the positive surprise in inflation), while short term interest rates remain low amid dovish NBP, resulting in a steepening of the curve.
  • Interestingly, while short term rates have been rising in Czech Republic as CNB has embarked into a tightening cycle, the long end of the curve has remained steady with the 20Y bond yield trading slightly lower. Hence, the Czech yield curve has flattened sharply in the past month (chart below).

Source: Bloomberg/MNI

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