POLAND: Finance Minister Flags Works On Lowering Selected Taxes
Mar-06 08:19
- Prime Minister Donald Tusk will join other EU leaders and Ukrainian President Volodymyr Zelensky at a summit devoted to regional security and aid for Kyiv. The meeting takes place after recent changes in US strategy, which has involved halting support to Kyiv, with latest reports indicating that the US went a step further and stopped sharing intelligence with Ukraine, in addition to the earlier pause in the delivery of military hardware. A report by Onet noted that the US demanded that its military equipment flown into a logistical hub in Rzeszow, Poland should be transferred to the nearby base housing troops from the 82nd Airborne Division instead of being sent further to Ukraine. At the same time, however, there have been no interruptions to the deliveries of weapons from other countries. Separately, a NYT sources piece suggested that the pause in support could be relatively short-lived if Ukraine bends to US demands.
- Finance Minister Andrzej Domanski told RMF FM that his ministry is not working on any tax increases. On the contrary, his team is looking into the possibility of lowering the so-called copper tax (effectively paid only by the state-owned copper and silver producer KGHM) and the so-called Belka tax (capital gains tax).
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RIKSBANK: January Minutes May Provide Signal On Rate Outlook
Feb-04 08:18
The Riksbank January meeting minutes are due today at 0830GMT/0930CET. This release may provide a clearer signal on the rate outlook than the decision itself, given the non-committal policy statement guidance.
- The January rate decision (25bp cut to 2.25%) was unanimous, though Governor Thedeen suggested in the press conference that the minutes would highlight “nuances” in opinions amongst Board members.
- Key focus will be on whether the three doves from the December meeting minutes (Breman, Jansson and Bunge) still see a case for more cuts in H1 2025, and whether the March decision should be considered live.
- We expect Thedeen and Seim to continue offering a more cautious outlook for policy rates. In the January press conference, Thedeen said that the Riksbank’s “best assessment” was that there would be no more rate cuts (in line with the December MPR rate path). However, this assessment was heavily caveated, with the Governor citing significant uncertainty to the outlook (e.g. from potential trade barriers and economic fragmentation) and the need to assess incoming data in the context of the December projections.
STIR: SFRZ5/Z6 Sold
Feb-04 08:11
SFRZ5/Z6 4K given at -0.5.
GILTS: Weaker On Canadian Tariff Reprieve
Feb-04 08:10
Gilts sell off at the open, adjusting to Canada’s short-term tariff reprieve that has been covered in detail elsewhere.
- Futures as low as 92.67 before a recovery to 92.80.
- The recent corrective bullish cycle in the contract extended yesterday.
- Initial support and resistance located at the 20-day EMA (92.11) and yesterday’s high (93.54), respectively.
- Yields 1.5-3.0bp higher, curve bear steepens.
- GBP STIRs still operate around pre-gilt open levels, ~80bp of BoE cuts priced through year-end.
- The DMO will come to market with GBP4.25bln of the 4.375 Mar-30 gilt this morning.
- Little else of note on the UK calendar, which will leave focus on cross-asset cues and tariff-related headlines.
- Our BoE preview will be published later today.
