NATGAS: Hungary, Turkey & Slovakia Recieve US Waiver Extension for Russian Gas

US Data/Speaker Calendar (prior, estimate). All times ET

• 19-Feb 0700 MBA mortgage apps (2.3%, --)
• 19-Feb 0830 Housing starts (1499k, 1390k)
• 19-Feb 0830 Building permits (1482k, 1460k)
• 19-Feb 0830 NY Fed Services (-5.6, --)
• 19-Feb 1130 US Tsy to sell $60bn 17-week bills
• 19-Feb 1300 US Tsy to sell $16bn 20Y bonds - 912810UJ5
• 19-Feb 1400 FOMC minutes
• 19-Feb 1700 VC Jefferson on household b/s (text + Q&A)

OI data points to a mix of net short setting and long cover in SOFR futures between Friday and Tuesday settlements.

• Net short setting was more dominant in each of the packs through the blues.

• At the Strategic Dialogue on the Future of the European Automotive Industry on January 30, President Von der Leyen announced an action plan to support and protect the auto sector which will be presented March 5th. The president also mentioned that the auto sector accounts for "over 13 million direct and indirect jobs" and contributes "approximately E1 trillion" to EU GDP [around 7% of Europe's GDP]", highlighting the importance of the auto sectors recovery to the economy.
• This will be important in tackling subdued growth. The Eurozone's GDP has remained sluggish with structural weakness still apparent with businesses particularly in the automotive industry struggling to keep up with competitors. The flash estimate for Eurozone GDP was revised up one tenth to 0.1% Q/Q in Q4 (vs 0.0% preliminary estimate), though remains the weakest quarter in 2024. On an annual basis it is estimated at 0.9% Y/Y in Q4, significantly below the 2% averaged in 2017-19 ahead of the pandemic
• Whilst the action plan is promising, members of the automotive industry question its impact given the initial dialogue did not mention concrete steps to help the automotive sector.
• On top of this, US President Trump has announced several tariffs ending exemptions made for allies including the EU previously. This includes a threat of a "in the neighborhood of 25%" tariff on automotives entering the US, which Trump says would come as soon as April 2.
• Trump has consistently called out what he calls the unfair treatment of US automotive exports in foreign markets. The EU for instance, collects a 10% duty on vehicle imports, four times the US passenger car tariff rate of 2.5% (though it collects a 25% tariff on pickup trucks from countries other than Mexico and Canada).
• With the US accounting for a hefty 21% of total Extra-EU vehicle exports (as of November 2024), this poses a potentially significant further challenge for the already struggling automotive industry.
• Though the tariff is likely to have a significant effect, no European-focused tariffs have been implemented in 2025 despite Trump making several threats, so there is also the question around Trump's negotiation tactics.