EGBS: Spread Widening Vs. Bunds Continues
Apr-04 11:12
The extension of the risk-off price action, detailed elsewhere, coupled with widening of EUR CDS ben...
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SECURITY: German Gov't Spox-EU Proposals On Defence 'Go In Right Direction'
Mar-05 11:11
A spokesperson for the German gov't has said that the European Commission's proposals with regard to defence spending "go in the right direction". This comes after two significant announcements from Brussels and Berlin on 4 March with regard to defence and security spending objectives, and how it can be paid for.
- European Commission President Ursula von der Leyen presented the 'ReArm Europe' plan, which includes the used of the national escape clause from the Stability and Growth Pact to enable member states to boost defence spending without risking entering the excessive deficit procedure, EUR150B in EU loans to go towards military expenditure, and allowing the use of cohesion funding for defence spending.
- In Germany, the leaders of the centre-right Christian Democratic Union (CDU, Friedrich Merz) and Christian Social Union (CSU, Markus Söder) and the co-leaders of the centre-left Social Democratic Party (SPD, Lars Klingbeil and Saskia Esken) announced in an evening press conference that rules around defence spending would be loosened to exempt expenditure above 1% of GDP from the limits of the constitutional debt brake.
US: SOFR FIX - 05/03/25
Mar-05 11:10
SOFR FIX - Source BBG/CME
- 1M 4.31397 -0.00009
- 3M 4.28586 -0.01433
- 6M 4.17565 -0.04099
- 12M 3.97399 -0.08382
EUROZONE DATA: Germany Service PMI Solid Before Defence Spillover, France Dire
Mar-05 11:10
- The final Eurozone services PMI was revised down a tenth to 50.6 (flash 50.7) in February from 51.3, for its lowest since Nov and before that Feb.
- We have been noting how ex Germany and France countries have been outperforming for some time, and indeed our calculation for the average at circa 54 increased to its highest since mid-2024.
- The weighted average of Germany and France at a sombre 48.6 in February belies two very different recent trends however, with Germany at 51.1 and France sliding almost 3pts to 45.3 (lowest since Jan 2024) despite today’s 0.8pp upward revision.
- Political uncertainty appears to continue to plague French business confidence but German firms look in a good place considering the survey dates of Feb 10-25 won’t have captured any spillover from latest defence spending and infrastructure investment plans.
