Figures published on Tuesday showed Romania's budget deficit remained well below the targeted 2.8 percent of economic output, at 0.73 percent of GDP. With no government formed, the country does not yet have a 2017 budget or debt issuance plans. The Social Democrat Party promised higher wages and pensions during the election campaign, which if implemented could see the deficit surge next year and keep inflation anaemic. The leu hit a new 6-month low against the euro. It traded at 4.5396 at 0911 GMT.
The prospects of low inflation in the near term keep short-dated Romanian debt yields below better-rated Poland's levels, but Romania has the steepest yield curve in the region. Its 10-year bond yield was bid at 3.68 percent, up 2 basis points, while Poland's corresponding yield dropped 2 basis points to 3.42 percent.
Hungarian government bonds were motionless, with no trading ahead of a news conference of the debt management agency AKK, scheduled for 1000 GMT, about issuance plans next year. Hungary's yields are lower than levels in Poland and Romania but are high relative to euro zone peers. The country's 10-year yield was fixed at 3.19 percent on Tuesday.