AMERICAS OIL: New Trump Energy, Environment Chiefs Vow to Promote Oil and Gas

Upside call structure volume picked up following dovish Fed Gov Waller opinions on rate cuts and tariffs this morning, underlying futures trading moderately higher (Reds-Greens: SFRZ5-SFRU7 +0.030-0.050).

• +5,000 SFRM5 96.00/96.25 call spds 6.0 ref 95.93
• +4,00 SFRM5 96.00/96.12 call spds 3.5 ref 95.925
• +16,000 SFRU5 95.87 put vs. -8,000 2QU5/3QU5 95.87 put strip, 34.5-35 net
• -3,000 SFRU5/SFRZ5 96.50/97.00 call spd spd 2.75 net
• +10,000 SFRH5 95.81 puts 8.5 ref 95.805
• +5,000 0QM5 95.50/95.62 put spds 3.5 vs. 95.99/0.06%

Updated estimates on the impact of the EU’s NextGenerationEU programme “indicate a smaller impact on potential output over the period 2020 to 2030 than estimated in 2022”, the European Central Bank said in a paper on its Economic Bulletin.

• The estimated impact on eurozone potential output by 2024 is only 0.2% --rather than the expected 0.5%-- and the long-term impact of 1.3% is expected to materialise in 2033 instead of in 2030.
• "The smaller expected impact on potential growth also reflects the fact that the previously anticipated effects of investments hardly materialised in 2022-2023, with 2024 being a transition year. From 2025 onwards, a pick-up in the impact on potential growth is expected as structural reforms start having an effect on potential growth. In the most recent update, however, this impact is also estimated to be slower. Overall, the lower and delayed impact stemming from investments and the lower impact coming from structural reforms leads to a smaller impact on the near-term potential growth profile than in the initial estimates."

• No surprises in seeing a decent start of the Year in Bund and EGB's given the Busy Week on the Data front and heavy supply.
• Risks Events and Trump have also provided further liquidity.
• This Week's volumes in Bund have been the best since the 12th December, and the contract has only seen 4 sessions for the December Expiry with higher volumes, but we still haven't had the US NFP on Friday yet.