OUTLOOK: Price Signal Summary - Bull Cycle In Bunds Extends

DSTA has announced the following on its issuance calendar for Q1: 

• It confirmed to hold DSL auctions on February 11 and March 25, details tba. That means the potential auction dates on February 25 and March 11 will not be exercised.
• It also confirmed it will sell E4.0-6.0bln of the Jul-35 DSL (ISIN tba) via DDA on March 4.

With this week's DeepSeek-induced equity volatility, we anticipate reports from Meta, Microsoft and Tesla will come under greater scrutiny after-market today, through increased focus on Capex and expectations for AI revenues this year. While a direct comment on DeepSeek is highly unlikely, the boards will be cognizant of the risk of sizeable AI spending announcements being received poorly by an already sensitive investor base.

These are the messaging points that could change, or come under focus at today's reports:

• Meta Platforms (Facebook): "Meta plans to grow AI teams "significantly", Llama AI has ~600mln monthly active users and the company sees $1-2bln additional revenues via LLM licensing. Reality Labs (incorporating Meta's AI research Lab) still likely to post sizeable annual loss of ~$20bln. Capex for 2024 was running at $24.4bln YTD as of the Oct30 earnings call.
• Microsoft: Street sees ~$6-9bln generative AI revenue for 2024. OpenAI last valued at $157bln, which generates 70% of their $3.7bln annual sales via ChatGPT subscriptions. Capex at $20bln for Q1'25 (as of Oct30) to support cloud and AI offerings.
• Tesla: "we expect our hardware-related profits to be accompanied by an acceleration of AI, software and fleet-based profits". Capex quarterly run rate at $3.5bln for Q3'24.