Hungary Bonds Drop First Time in Week as EU Threatens Funds Halt

Hungary’s government bonds dropped for the first time in a week and the forint weakened after the European Commission said the country faces suspension of some its funding and possible sanctions for breaching budget deficit targets and for laws that may contravene European Union rules.

The currency depreciated as much as 0.5 percent against the euro before paring its loss to 0.2 percent at 312.02 by 4:29 p.m. in Budapest. The yield on the government’s 10-year notes rose 3 basis points to 9.591 percent from 9.558 percent yesterday, the lowest since Dec. 27.