June 8 (Reuters) – Hungarian government bond yields dropped 3 to 10 basis points on Tuesday morning in very thin trading as markets awaited more policy news from the government and the first bill auction since recent market tremors. The yield on the three-year segment was unchanged from late Monday’s levels at 6.95 percent, five-year paper traded around 7.50 percent, down 3 basis points, and 10-year bond yields were about 7.80 percent, about 10 basis points lower than Monday. The government’s auction of three-month T-bills at 0930 GMT HUISSUE might generate weak demand and higher yields, a trader said, adding that a potential lack of interest should not be construed as markets freezing up.
Another trader said the bills would likely be sold, but at higher yields than at their last auction a week ago.
“Rate cut expectations have been completely priced out now,” he added.
(Reporting by Marton Dunai and Krisztina Than; editing by John Stonestreet)
