Hungarian Forint pressured by rising US yields and oil prices

The Hungarian Forint has faced significant volatility due to rising US Treasury yields and increasing global oil prices. In one market movement, the Euro rose above the 369 level against the Forint, while the USD/HUF exchange rate surpassed 328. This pressure coincided with a sharp decline in the Budapest Stock Exchange (BUX), where the index fell by more than 3 percent, including a 6 percent drop in OTP Bank shares.

Global economic factors are driving these shifts. US ten-year Treasury yields reached 5.34 percent, a level not seen in 24 years, as markets anticipate further interest rate hikes by the Federal Reserve to combat inflation. Simultaneously, Brent crude oil prices have fluctuated between 102 and 103 dollars per barrel.

A primary driver for rising energy costs is China's decision to suspend the export of refined fuels for October to prioritize domestic supply security. This move is expected to tighten the already constrained global market for diesel, gasoline, and aviation fuel.