"Hungary’s bond yields headed for the biggest jump since January 2012 and the forint plunged as U.S. Federal Reserve said it may phase out the stimulus that has stoked a global debt rally in past months.
Yields on benchmark 10-year government bonds jumped 35 basis points, or 0.35 percentage point, to 6.31 percent at 12:56 p.m. in Budapest, the highest since June 11. Hungary’s currency depreciated 1.6 percent to 299.55 per euro by 12:27 a.m. in Budapest, extending its three-day decline to 3 percent, the second-biggest among the 24 emerging-market currencies tracked by Bloomberg after the Mexican peso.
Emerging-market assets plummeted after Chairman Ben S. Bernanke said the Fed may start reducing bond purchases this year and halt the program around mid-2014 as long as the world’s largest economy performs in line with its projections. Hungary’s Monetary Council, which cut its main rate to a record 4.5 percent by last month, is “ready to act” if the financial market environment was to “fundamentally reverse,” newspaper Napi Gazdasag reported, citing policy maker Janos Cinkotai."
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