Large movements in the CEE’s bond markets
Large movements in the CEE's bond markets
The July US employment report revealed a weaker-than-anticipated performance, signaling a potential recession. This, coupled with Chairman Powell's remarks suggesting a possible rate reduction in September, has shocked the global markets. The swings have been felt not only in international equities but also in CEE bond markets. The most significant response was seen in the 10-year yields of Poland and Hungary, witnessing a decline of 55 and 49 basis points over the past week, respectively. While yields across other regional markets also fell, the decreases were more modest, ranging from 11 to 18 basis points. Despite these movements, current yield levels remain in proximity to those at this year's beginning. The exception is Romania, where the yield still stands approximately 35 basis points higher than January's figures. Expanding our perspective to consider the deviation from peak values of the year, Hungary's yield has contracted by nearly 140 basis points. Similarly, yields in the Czechia and Poland have contracted by 85 and 80 basis points, respectively.