IRAN: IRGC-Linked Outlet: US Actions Are "A Repetitive Show"

• Bund goes bid on the ISM data miss, but the price action is far more limited than what is seen in the US Treasuries, with the US 10yr Yield dipping to a 4.4081% low.
• The 4.40% level equates to 109.29 today, the immediate resistance, printed a 109.27 high so far.

The January ISM Services Index missed expectations at 52.8 (54.0 expected, 54.0 prior), with pullbacks prevalent in some key categories. That said, with the 7th consecutive monthly reading that is solidly above 50.0, the index continues to suggest robust services sector activity going into 2025.

• Prices paid at 60.4 (65.1 expected) was the main standout as it saw its biggest pullback since March 2024, though this was reversing December's outsized 5.9 point rise. The January level was still higher than any other reading in the 10 months between Feb-Nov 2024 (though the erratic prices movements at the turn of the year seem to persist in ISM services).
• New orders fell 3.1 points to 51.3, a 7-month low.
• But there were brighter spots elsewhere, the most notable being employment reaching a 16-month high, up 1 point at 52.3. New export orders meanwhile rose 1.9 points to 52.0 (4-month high).
• And the ISM report notes that weather and government policy uncertainty may have been a factor in this report, potentially clouding the signal: "Poor weather conditions were highlighted by many respondents as impacting business levels and production. Like last month, many panelists also mentioned preparations or concerns related to potential U.S. government tariff actions; however, there was little mention of current business impacts as a result."

The National Assembly has started debate on two censure motions against the gov't of PM Francois Bayrou. Once speakers from the groups in parliament and the gov't have taken place votes will be held. These votes carry no threat to the gov't given that the centre-left Socialist Party (PS) and the far-right Rassemblement National (National Rally, RN) will not back the motions, denying them a majority. 

• The motions were advanced by the far-left La France Insoumise (LFI) following Bayrou's use of Art. 49.3 of the constitution to push the budget through the National Assembly without a vote. LFI figurehead Jean-Luc Melenchon said the leftist 'New Popular Front' alliance that won the most seats in the 2024 election had "one party less" after the PS confirmed its intention not to vote to remove Bayrou.
• In the opening speech, LFI lawmaker Aurélie Trouvé calls the budget 'the most austere of the 21st century'. PS deputy Emmanuel Grégoire says the budget can be a "budget of less suffering than that of Michel Barnier." Barnier was ousted in Dec 2024 with the PS voting for the censure of his gov't after he used Art 49.3.
• Grégoire says that the lack of censure does not indicate support for the budget, and that the PS will remain in opposition.
• Earlier today, gov't spox Sophie Primas said following a meeting of the Council of Ministers that if today's censure motions fail, "we should have a budget adopted by mid-February."