SLOVAKIA: Coalition Resorts To Obstruction To Block Repeat No-Confidence Debate
Jan-29 10:46
The opposition is struggling to call an extraordinary session of the National Council and force a debate on a no-confidence motion against the government, despite repeated efforts this morning. Pravda reports that Slovakia's unicameral parliament has just failed to reach a quorum of 76 (50%+1) of all MPs on second attempt, following two unsuccessful attempts on Tuesday.
- The original no-confidence motion was tabled earlier this month, but the opposition withdrew it when Prime Minister Robert Fico requested that the debate was held behind closed doors, arguing that he had to present confidential information obtained from the Slovak intelligence agency. Fico subsequently revealed that coalition MPs would not support another motion to open an extraordinary meeting of the legislature.
- It seems that the ruling coalition has managed to cling onto a tentative razor-thin majority of 76 MPs for the duration of the ordinary February parliamentary session. SME reports that Roman Malatinec (Hlas) and three rebel MPs from SNS will help the government open the meeting and vote on the proposed healthcare and construction laws. Meanwhile, the ruling coalition will likely pull more controversial items from the agenda.
- At the same time, the coalition's control over the legislature remains exceedingly fragile and contingent. The coalition can count on the stable support of just 72 lawmakers, with another seven votes hanging in the air. The opposition would need 76 votes to oust the government and 90 votes to dissolve the legislature and force a snap election.
- The next opportunity to table a no-confidence motion will be during the aforementioned regular session, which is scheduled to begin on February 4. However, the opposition would need active support from some of the rebel MPs, which may be difficult to achieve, given that some of them signalled their intention to vote with the government at this session.
- Amid difficulties with securing stable parliamentary support, Finance Minister Ladislav Kamenicky yesterday said that the bulk of fiscal consolidation measures will be delayed until 2026. However, he noted that his ministry is working on a package that would reduce deficit by at least EUR650mn in 2026, with the intention to boost this figure to EUR800-850mn.
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CROSS ASSET: Bunds Within Range of Lows, Higher Spanish CPI Leaves Little Mark
Dec-30 10:31
- Spanish inflation data came in ahead of expectations, with the headline driven by fuel prices as well as leisure. The release added some pretty to Bund prices, which shed ~20 ticks on release, but swiftly recovered the losses. Nonetheless, Bund futures remain well within range of cycle lows and the bear trigger at 132.71 - printed at the resumption of trade following the weekend.
- Currency markets trade with little conviction. The USD is marginally weaker as AUD, NZD and CAD recover off recent pullback lows, giving trade a consolidatory theme after fierce price action in the weeks leading up to Christmas.
- Stock futures are lower, pointing to another lower open on Wall Street - building on the weakness seen into the Friday close.
- Significant newsflow has been few and far between, with US domestic politics focusing on the internal Republican debate over H-1B visas and the passing of President Carter. We expect US bond and equity markets are to be closed across the Day of Mourning, set for January 9th.
- Focus for the duration of Monday trade will be on the MNI Chicago PMI at 1445GMT, expected to tick up to 43.0 from 40.2 previously. We anticipate volumes and broader liquidity to remain very light over the coming two sessions, particularly with tomorrow's European market closures and early closes elsewhere. EUR futures are posting cumulative volumes ~10% below an already subdued average for this time of day.
STIR: EURIBOR FIX - 30/12/24
Dec-30 10:06
| Tenor | Rate | Change |
| One-week | 2.912 | -0.023 |
| One-month | 2.867 | +0.004 |
| Three-month | 2.678 | -0.005 |
| Six-month | 2.562 | -0.015 |
| One-year | 2.454 | -0.011 |
CANADA: Ministers Leave Florida w/Out Tariff Assurances From Trump's Team
Dec-30 09:25
Canadian Finance Minister, Dominic LeBlanc, and Foreign Affairs Minister, Melanie Joly, met on Saturday with two key members of US President-elect Donald Trump’s incoming cabinet to discuss strategy to avoid a 25% tariff that Trump has threatened to impose unless Canada takes steps to secure the border.
- LeBlanc’s spokesperson described the Florida meeting with Trump's Commerce Secretary nominee, Howard Lutnick, and Interior Secretary/‘Energy Czar’ nominee, Doug Burgum, as “positive” and “productive”, noting the ministers “reiterated the shared commitment to strengthen border security" and "combat the harm caused by fentanyl." The spokesperson added that Lutnick and Burgum "agreed to relay information to President Trump.”
- Bloomberg reports: “It’s the second high-level Canadian mission to Trump’s Mar-a-Lago resort in the past month, after Prime Minister Justin Trudeau met the incoming leader at the end of November,” noting that "Trudeau’s response to Trump’s tariff threat has been complicated by chaos in his government" including the resignation of finance minister Chrystia Freeland, who suggested in her resignation letter that Trudeau wasn't taking the tariff threat seriously.
- The New York Times notes the Canadians outlined a USD$900 million package of border security measures but “returned home without any assurances,” from Trump’s team.
- The Times adds: “…Trump has suggested that his tariff plan may have less to do with border security than with his desire to eliminate the $50 billion trade deficit with Canada. Oil and gas exports from Canada account for most of that trade imbalance. Without them, the U.S. generally has a trade surplus with Canada.”
