HYBRIDS: Hybrids: Movers - BPLN (A3/BBB/A-) Muted Response

Societe Generale continue to like 5-/10-Year curve steepeners but look for carry and rolldown friendly positive iterations.

• They note that “as receiving 2-/3-/5-Year flies can serve as a proxy for 5-/10-Year steepeners in the EGB space (dependent on the issuing country), this view is consistent with buying the 3-Year area of RAGBs, RFGBs, OLOs, DSLs, SPGBs and PGBs on the 2-/3-/5-Year flies.”

We have published and e-mailed to subscribers the MNI BoC Preview ahead of Wednesday's decision.

Please find the full report here: https://media.marketnews.com/BOC_Preview_Jan2025_f128d669a0.pdf

President Donald Trump will deliver the keynote address to the House Republican policy retreat in Florida today. Vice President JD Vance, a key conduit between the Senate and White House, will attend the retreat tomorrow. 

• House Speaker Mike Johnson (R-LA) has a long list of priorities for the retreat, including crystalising a “blueprint” for a reconciliation bill to cover the bulk of Trump's agenda; finalising details of a government funding and debt limit package; and balancing competing demands from his conference for deficit reduction, spending cuts, and tax breaks. 
• By week's end, Johnson likely intends to have a robust framework in place for a single reconciliation bill that can resolve a standoff with Senate Republican leaders, who prefer a multi-bill reconciliation process.
• Johnson has indicated he intends to pass a budget resolution by February 24. If this timeline is to hold, Johnson will likely have to release a budget plan within the next two weeks or so.
• Reminder: The Senate and House need to approve the same budget resolution to initiate the reconciliation process. That means broad agreement across a range of issues, including any cuts to entitlement programmes.
• On Tuesday, the House Policy Committee and House Budget Committee will meet to hold independent reconciliation discussions. They will provide reports to the retreat on Wednesday morning.
• Note: Johnson has invited Trump to address a joint session of Congress on March 4. This was erroneously flagged as March 14 in today's MNI US Daily Brief.