Hungarian bond yields soar above 10% on cancelled debt auction

Hungarian bond yields soared above 10% yesterday after the government cancelled a bond swap auction, increasing fears the country will be the first in the EU to default on its debt.

The Hungarian government, led by Viktor Orban, has already fallen out with the EU and IMF over a law curbing the independence of the central bank. It has continued to defy euro leaders by calling off the bond auction to swap old debt for new. The Budapest Business Journal reported the auction was called off despite adequate demand, according to the country's debt agency AKK, as the yields "did not make the exchange worthwhile for the state". An auction for short-term debt went ahead this morning but it failed to raise the planned amount of 45bn forint. Only 35bn forint was sold in 12-...