GERMANY: Latest Major Poll Shows 3-Party Coalition May Be Needed (1/2)

Feb-07 11:37

YouGov has published its second major 'multilevel regression and post-stratification' (MRP) poll ahead of the 23 Feb federal election. The poll returned broadly similar support levels to the first MRP, with the conservative Christian Democratic Union (CDU/CSU) in first place, the far-right Alternative for Germany (AfD) in second, and Chancellor Olaf Scholz's centre-left Social Democrats (SPD) third. However, some new developments could have wide-ranging impacts on political stability post-election. 

  • Compared to the previous MRP, all parties record a decline in their 'central' seat projections (i.e. party support coming in the middle rather than the high or low end of expectations). This comes as the far-left progressive Die Linke (The Left) retains seats in the Bundestag as part of the core scenario, having fallen below the threshold in the previous MRP.
  • The poll shows that the most important issue raised by respondents by a significant margin is immigration and asylum. Thirty-five percent chose it as their number one. The economy was next, raised as the most important issue by 16% of respondents.
  • The focus on immigration is also cross-party, with CDU/CSU, SPD, AfD, pro-business liberal Free Democrat (FDP) and far-left nationalist Sahra Wagenknecht Alliance (BSW) supporters each selecting it as the most important issue in the election.
  • The clear prominence of the issue is likely to mean a tougher line on immigration post-election no matter the make-up of the next coalition, potentially setting up disagreements with neighbouring countries and the EU. 

Chart 1. Lower and higher range of estimated national-level results, Seat Projections

2025-02-07 11_17_27-Project Llama Overlay

Source: YouGov. Fieldwork 17 Jan-5 Feb, 9,322 respondents. 

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US: Review Of President-Elect Donald Trump's Mar-a-Lago Press Conference

Jan-08 11:32

US President-elect Donald Trump delivered a wide-ranging press conference at his Mar-a-Lago resort in Florida on January 7, touching on various issues from energy to his foreign policy ambition of carving out a new US sphere of influence from Panama to Greenland.   

  • Please find below a full summary of the presser with analysis of the key comments related to foreign policy, tariffs, energy, and legislation.

Full article: Trump Press Conference Review

GILTS: Long Futures Positioning A Potential Factor In Sell Off

Jan-08 11:26

Elsewhere, a reminder that our latest positioning indicator update (published yesterday) pointed to long positioning in gilt futures. That could be adding further fuel to the sell off.

GILTS: Further Selling

Jan-08 11:24

Further weakness in gilts accompanies pressure for GBP in FX trade, with the market in price discovery mode after finding fresh multi-decade highs in 30-Year yields and registering the highest level seen since ’23 in 10-year yields.

  • Yields now 2.5-5.0bp higher across the curve, while futures trade as low as 90.75.
  • Technicals for 10s & futures outlined in the prior post.
  • No fresh UK headline triggers, but continued erosion of already limited fiscal headroom adds to wider pressure stemming from a reassessment of global term premium, hawkish U.S. data and a heavy start to ’25 IG supply, as well as medium-term structural headwinds for gilts.
  • SONIA futures +0.5 to -9.0. Dec low in SFIZ5 untested. Nov low in SFIZ6 broken.