Monthly Securities Market Summary
What happened in the securities markets? – 2026 May
Monthly report on government securities markets
2026. May
Domestic government securities market
In April, annual inflation rose to 2.1% from 1.8% in March, while monthly inflation increased by 0.4%, and core inflation accelerated to 2.23%. Industrial production volume also performed well, registering a 0.9% increase year-on-year.
In May, the Hungarian bond market followed an overall positive trajectory despite ongoing tensions in the Strait of Hormuz region, which caused periodic disruptions in global oil shipments. Although intensive negotiations began by the end of the month, no lasting agreement has yet been reached. At the same time, market sentiment was significantly improved by the new Hungarian government’s shift in economic policy, particularly its efforts to draw down EU funds as soon as possible. The announced reforms regarding the rule of law and anti-corruption, as well as a more predictable economic policy, strengthened investor confidence.
Emphasis was placed on strengthening fiscal discipline, reducing the budget deficit, and improving the transparency of government spending, while the adoption of the euro also emerged as a longer-term goal. The 10-year yield fell from around 6% at the start of the month to 5.3%; an even more significant drop was observed in longer maturities, but yields also moderated on the short end as expectations of interest rate cuts strengthened. Despite falling yield levels, demand remained strong at ÁKK auctions. The forint also strengthened, moving from an exchange rate of 366 to the euro at the start of the month to around 354. The Monetary Council kept the base rate at 6.25%.
US and European government bond markets
In May, global bond markets were primarily driven by the U.S.-Iran conflict and its inflationary implications, particularly
due to the risk of a closure of the Strait of Hormuz. Rising energy prices and supply uncertainties drove yields higher: for
U.S. Treasury bonds, yields on 5- to 30-year maturities rose to 2026 highs, and the 30-year yield once again moved firmly
above 5%. The Fed left its benchmark interest rate unchanged, while new Chairman Kevin Warsh signaled that the tightening
cycle had ended, which somewhat stabilized longer-term expectations.
In the eurozone, the ECB kept interest rates at 2.00%, though its communication has increasingly shifted toward a hawkish
stance. Several policymakers—including Cipollone and Kocher—emphasized the possibility of a rate hike, particularly in light
of persistently high inflation and geopolitical risks. This was also reflected in market pricing, while Villeroy de Galhau
stressed that the central bank continues to make data-driven decisions, avoiding pre-commitment.
In the United Kingdom, the gilt market was exceptionally volatile: long-term yields rose to a nearly three-decade high due to macroeconomic and fiscal risks, followed by a significant correction on news of a potential Middle East agreement. In Japan, the central bank shifted toward a gradual tightening stance while keeping interest rates unchanged, significantly raising its inflation forecast from 1.9% to 2.8%. Foreign exchange market interventions may also have taken place to stabilize the yen, while the market increasingly viewed rising government bond yields as a risk of overheating, rather than merely as normalization.
Monthly report on stock markets
2026. May
Domestic and Central-Eastern European stock markets
Central and Eastern European stock markets continued to rise sharply in May: the CETOP index, which covers the region, climbed 6.2%. The Romanian BET (+7%), the Polish WIG20 (+6.4%), and the Austrian ATX (+6.4%) led the gains, while the Czech PX posted a more modest 2.5% increase due to the banking sector’s relative underperformance. The BUX index traded sideways, rising by a mere 0.6%. At the regional level, bank stocks continued to perform well, while the oil and gas sector saw mixed movements. Polish CD Projekt’s share price fell by more than 15% on news of delayed releases, while copper miner KGHM rose by 15.4%. On the domestic market, Magyar Telekom stood out (+13.8%), while OTP (+2.8%) and Richter (+1.8%) rose moderately, and MOL (-6.8%) fell. On the macroeconomic front, a mixed picture emerged: inflation in both Poland and Hungary came in lower than expected, while central banks maintained an unchanged interest rate environment, and growth prospects remained divergent across the region’s countries.
Global emerging stock markets
Emerging market equities had another strong month in May: they rose 9.7% in dollar terms, which translated to a 6.7% gain in forint terms due to the strengthening of the domestic currency. Performance was driven primarily by AI-themed investments, as concerns regarding monetization eased and the investment outlook for large corporations remained supportive. Regionally, South Korea (+31.6%) and Taiwan (+13.3%) stood out, while IT (+26.1%) led the way sectorally. Markets outside the AI sector, however, performed more modestly: India (-3.1%) weakened due to fears of an “AI gap,” while China (-5.8%) declined due to weak consumption and regulatory measures. Brazil, Indonesia, and Turkey also saw significant declines. The impact of geopolitical events remained limited, though expectations of easing tensions in the Middle East supported market sentiment, even as risks have not yet completely disappeared.
Developed stock markets
In Europe, the economic environment remains weak: growth is subdued, domestic demand and lending are low, while energy prices pose an inflationary risk. The ECB may tighten policy further in the short term, but easing is expected in the medium term, supported by the disinflationary effects of Chinese overcapacity and cheap imports. In contrast, the U.S. economy remains strong, with the S&P 500 reaching new highs, supported by solid earnings growth and an AI-driven investment cycle. Companies are increasingly directing their resources toward investments rather than share buybacks, a move viewed positively by the market; however, the rally remained heavily concentrated in the technology sector. By sector, technology and healthcare stocks performed best, while the energy and utilities sectors were weaker. Among the major indices, the MSCI World and U.S. markets rose, with the Nasdaq performing particularly strongly, while European indices showed more moderate performance.
Monthly report on commodity markets
2026. May
Global commodity markets
In May, commodity markets continued to be shaped primarily by geopolitical news, particularly the conflict in Iran. Oil prices showed volatile movements: at the beginning of the month, expectations regarding the reopening of the Strait of Hormuz and a potential agreement eased supply fears, but then the stalling of negotiations and new incidents once again increased uncertainty. By the end of the month, however, optimism had returned, which moderated prices. Fundamentals dominated the U.S. natural gas market: rising production and rapid storage build-up initially put pressure on prices, while weaker inventory data and more subdued production later pointed to a tighter supply outlook, which supported price increases. For precious metals, inflation and interest rate expectations took center stage, keeping prices under pressure. Industrial metals performed mixed, with copper showing relative strength due to supply constraints and Chinese demand expectations. In grain markets, weather risks and weak demand prospects ultimately pushed prices lower.
We would like to draw the attention of our esteemed readers and interested parties to the fact that this information contains data that was current and available on the date of its preparation, and does not constitute investment advice.
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