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17th May, 2018

Bond yields continue to trek higher

Yields on Hungary’s ten-year bonds surged 50 basis points in the last two weeks and were fixed at 3.02% on Wednesday, the highest level since August, Portfolio reports.

On the secondary market, yields moved up four basis points after a 12-point rise on Tuesday.

The sell-off in Hungarian bonds came in tandem with the decline of the forint, which slid to its weakest level against the euro in two years, at above 317 on Tuesday.

There is a broad-based sell-off in emerging market assets, analysts said, adding that certain factors, such as the dovish policies of the MNB, are also playing a part in the weakness of Hungarian assets.

The Czech and Romanian central banks have already started tightening rates, while the MNB looks firm to keep its base rate unchanged until 2020.

Hungarian bonds outperformed regional bonds for a long time but with the correction now taking place the losses are also steeper, Portfolio writes.

Yields on the ten-year Hungarian bond are lower than on similar Polish bonds, which would have been unimaginable a couple of years ago, the website adds. (portfolio.hu)
17th May, 2018

More work permits for foreigners

Last year 25,000 foreigners from non-EU countries received work permits in Hungary, an increase of 10,000 from the previous year, to ease the dire labour shortage in many industries, Magyar Idok reports, citing data from the Immigration Office.

The actual figures may be higher, as from June 2017 workers in professions with the most acute labour shortage do not need to have work permits.

No survey has been conducted regarding which sectors employ the most non-EU citizens, but industry representatives say most come from Ukraine and work in industry and construction.

Laszlo Parragh, head of the Hungarian Chamber of Commerce and Industry, said Hungary needs 200,000-300,000 guest workers to ease the labour shortage over the long term.

A large number of the foreign workers, some 20% according to estimates, use Hungary as a springboard for moving to Western Europe, but companies are trying to prevent this with clauses in contracts. (magyaridok.hu; napi.hu; portfolio.hu)
17th May, 2018

Diesel prices to top Ft 400 per litre

MOL raised its wholesale fuel and diesel prices by Ft 7 and Ft 8 per litre from Wednesday and said more hikes are to come on Friday.

The average price for a litre of diesel will exceed Ft 400 as prices will go up by Ft 5 per litre.

MOL will raise petrol prices by Ft 4 per litre to Ft 398, on average.

Rising global oil prices and the stronger dollar are behind the increase. (portfolio.hu; napi.hu; hvg.hu)

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