Hungary Rate-Cut Resolve Challenged by Investors as Forint Drops

The Hungarian central bank’s commitment to continue a record-long easing cycle is being challenged by investors retreating from emerging markets.

Bets for three-month interest rates in three months rose as much as 1 percentage point in the past two days, pricing in a 60 basis-point increase in the benchmark rate, forward-rate agreements show. Hungary failed to sell the planned amount of one-year Treasury bills at an auction today as yields jumped. The forint fell to its weakest against the euro in two years.