POWER: Faria Renewables, Duferco Hellas Enter 10-Year Greek PPA

Talks continue between the far-right Freedom Party (FPÖ) and the conservative Austrian People's Party (ÖVP) as they seek to reach consensus on a programme for gov't. There are reports of disagreement between the parties over the FPÖ's alleged demand for a bank levy, first reported in Kronen Zeitung. The report claims the measure would be "a temporary "special levy" on excess profits, with which up to seven billion euros could be skimmed off from the profits of banks for the duration of the seven-year budget consolidation."

• Der Standard reports the levy "has not been an issue in the negotiations between the FPÖ and the ÖVP, according to the ÖVP. "Perhaps it will come," shrugged an ÖVP negotiator, "we will find out." And then we will just have to talk about it."
• Representatives from each party meet in the tax and finance subgroup tomorrow (29 Jan). For the FPÖ, former State Secretary of Finance Herbert Fuchs will be lead rep. The ÖVP will be represented by Chamber of Commerce President Harald Mahrer and Raiffeisen Secretary General Clemens Niedrist. Niedrist formerly served as cabinet chief for then-Finance Minister Magnus Brunner, and his presence has raised questions about the closeness of the ÖVP to the banking sector.
• Der Standard report claims "Neither the FPÖ nor the ÖVP negotiators can imagine that there will be a government next week," with the party leaders yet to meet during the course of talks. 

Massive for the UK, decent for Europe, and small for the US.
The Bloomberg UK one is a January record.

Bloomberg Bonds projected:

• US Tsys: +0.07yr (small, average).
• EU Govies: +0.10yr (decent).
• UK Govies: +0.23yr (HUGE).

MS Bonds:

• US Tsys: +0.05yr (small).
• EU Govies: +0.07yr (small, average).
• UK Govies: +0.17yr (LARGE).

Citi Bonds:

• EU Govies: +0.10yr (decent).
• UK Govies: +0.19yr (HUGE).

Barclays FX:

• Their rebalancing model indicates a moderate dollar-selling signal against most majors and the signal for Cable is borderline strong.

Bund futures are -10 ticks at 131.53, softening a touch as global equity futures continue to recover from yesterday’s lows. The improved risk backdrop sees BTP and OAT futures outperform Bunds.

• A corrective bull cycle remains in play in Bunds, with initial resistance still the 20-day EMA at 132.10.
• The German cash curve has lightly bear flattened. The new 2.20% Mar-27 Schatz was launched this morning, and digested smoothly.
• The ECB’s Q4 Bank Lending Survey signalled a tightening of credit standards and a lower demand balance amongst firms than seen in Q3.
• Austria is launching a new 10-year RAGB and tapping a 2049 Green RAGB via syndication today.
• Alongside Germany, the Netherlands and Italy also held conventional auctions this morning.
• The OAT/Bund spread is back below 73bps, with fiscal/political headline flow set to become more prominent again in the coming days/weeks.
• The remainder of today’s regional data calendar is light, leaving focus on any US tariff-related headline flow and the upcoming run of DM central banks later this week.