EMISSIONS: EU Body Recommends Carbon Removals Integration to ETS

DSTA will launch a new 10-year benchmark DSL via Dutch Direct Auction (DDA) on Tuesday March 4, 2025.

• The bond will have a maturity of July 15, 2035.
• The target volume is E4-6bln.
• The coupon will be announced on February 28, 2025, with initial spread guidance announced on March 3, 2025. Reference bond: 2.50% Feb-35 Bund (ISIN: DE000BU2Z049)

• Fed Funds implied rates range from unchanged to 1bp lower overnight, broadly consolidating yesterday’s intraday push higher.
• It leaves a familiar path, with a next 25bp cut seen at one of the June or July meetings along with circa 40bp of cumulative cuts for 2025.
• Today sees another light macro docket and the FOMC of course in media blackout, leaving political headlines likely in the driving seat. Trump yesterday afternoon said his threats to impose 25% tariffs on Mexico and Canada and 10% on China on Feb. 1 have nothing to do with renegotiating the USMCA treaty, but instead it's about the flow of fentanyl into the US. He also said the EU will be in for tariffs.
• Cumulative cuts from 4.33% effective: 0.5bp Jan, 6.5bp Mar, 12.5bp May, 23bp Jun, 26.5bp Jul and 39.5bp Dec. 

ERM5 97.875/98.00cs, bought for 4.5 in 5k.