STIR: Dovish Repricing In EUR Rates On Latest US Tariff Developments

• Since Bitcoin has now broken through $89,329.20, the January low, it is now trading at its lowest level since November.
• Next support comes at $88,027.58, the 50% retracement of the US presidential Result (Trump Win), printed a 88,239.23 low, and back up to 89,000 now.

Germany's final Q4'24 GDP growth figures came in in line with the flash release at -0.2% Q/Q (+0.1% Q3).

• Inventories stand out, contributing +0.8% percentage points to the Q/Q print (the same contribution as in Q3). That means excl. inventories, Q/Q GDP growth would have been -1.0% (and -0.7%Q/Q in Q3).
• Other underlying drivers were also released, showing a rise in government expenditure, little moves in private consumption and declining exports. The bigger picture remains that the German economy continues to stall.
• Private consumption +0.1% Q/Q vs +0.4% cons, +0.2% Q3 (revised from +0.3%): A "consumption-driven recovery" was the big hope for the German economy about a year ago - these expectations appear to not really have materialized.
• Government spending +0.4% Q/Q vs +1.5% Q3 (revised from +0.4%, no cons): Talks to allow more military spending in the context of the constitutional debt brake (which currently limits cycle-adjusted net issuance to 0.35% of GDP) are underway - an agreement here would put on upside pressure going forward.
• Capital investment excl. inventories +0.4% Q/Q vs -0.5% cons, -0.5% Q3 (revised from -0.1%): Stronger than expected, driven upward by construction, and the first increase since Q1 2024. This was the most worrying part of the expenditure split in recent quarters - the uptick is good news in theory, but doesn't move the needle massively especially considering machinery / equipment investment was negative again.
• Exports -2.2% Q/Q vs -1.9% Q3 (no cons). This shows a continued absence of robust demand for German goods. Looking forward, there also appears to be little sign of an imminent rebound, as sentiment suggests.

• As noted in the Bund comment there's very little change intially across multi assets going into the European session.
• The early push lower is Equities, is supporting Core Govies, as Trump look for tougher Chips control over China, Dutch ASML is falling pre Open.
• The Dollar was flat overnight against all G10s, the EUR was the small winner, albeit by just 0.09%, and the NOK was down 0.04%, in a sense, a flat Dollar.
• Since the early Risk Off tone, JPY is now just up 0.11%, and the NOK is still down 0.06%, but the push higher in Bond futures and in turn a dip in Yield is putting pressure on the USDJPY, next support is seen a little further out, down to 148.85 Low Feb 24.
• The Yen is now seeing broader bid on the Risk Off tone.