Hungary to auction HUF 75 billion of 2010 local debt
Published March 29th, 2007
Hungary’s Government Debt Management Agency (ÁKK) is set to hold an auction of HUF 75 billion of 2010 local debt. Despite still overweight positions in local debt Dresdner Kleinwort expects to see relatively strong demand provided there is no more serious deterioration of risk appetite.
“The foreign holdings of local debt show that there has been a scaling back of exposure in recent weeks from the peak in mid-March, although the overall level remains relatively elevated,” FX strategist Jon Harrison said on Thursday.
Nevertheless, he noted that the duration of foreign holdings has been reduced, consistent with a reduction of risk.
“We maintain our view that the longer dated local debt is most attractive given that likely rate cuts are already priced into the shorter end of the curve,” Harrison added.
The HUF FRA curve is pricing 3-month rates at 7.11% by the end of the year, compared with 8.00% policy rates.
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