Orban’s Defeat Ignites Euro Convergence Trade in Hungary
A supporter holds a Hungarian flag during Peter Magyar’s Tisza party election event across from parliament in Budapest.
Photographer: Akos Stiller/BloombergPrime Minister Viktor Orban’s election defeat is extending a historic rally in Hungary’s bond market as his successor dangles the prospects of the country adopting the euro.
The extra yield investors demand to hold Hungary’s 10-year domestic bonds instead of German bunds — the euro-area benchmark — has dropped to the lowest level in five years in the wake of Sunday’s election. The forint and Budapest-listed stocks have also advanced sharply, while borrowing costs fell to a multi-year low at Thursday’s bond auction.