GERMANY: Scholz-Arsenal 'Exhausted', Unable To Provide Ukraine w/Extra Weapons
Apr-22 08:32
Reuters reporting comments from German Chancellor Olaf Scholz regarding the war in Ukraine.
- Scholz: "Our army's options for supplying Ukraine with further weapons from its arsenal are largely exhausted"
- Scholz: "Avoiding escalation towards NATO is a top priority for me...I do not thing it is justified for Germany and NATO to be come warring parties in Ukraine".
- Scholz's comments are likely to draw a rebuke from Ukraine and disappointment from Russia hawks in the NATO alliance. Following initial enthusiasm from Scholz towards providing major assistance to Ukraine and bolstering its own armed forces (EUR100bn of new investment into German defence announced very shortly after the Russian invasion begain), the chancellor has turned more lukewarm on providing additional assistance to Ukraine.
- This is not only leading to some veiled criticism from officials in other NATO countries, but exposing cracks in the German governing coalition. Scholz's Social Democrats have historically had closer links with Russia than other major German parties. The junior partners in the coalition (environmentalist Greens, liberal Free Democrats) have advocated for more military support for Ukraine, harsher sanctions on Russia.
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STIR FUTURES: SONIA / Euribor futures move a little higher
Mar-23 08:21
STIR futures, particularly in Europe, are now moving off their lows. No immediate headline drivers, possibly just some dip buying or profit taking with the amounts priced in looking increasingly stretched, particularly on the SONIA curve.
- SONIA futures moving higher, particularly Markets are currently pricing through Greens / Blues which are up to 4.5 ticks higher on the day. Markets now pricing in around 35bp for the May MPC meeting (25bp fully priced with around a 40% probability of a 50bp hike) with 91bp priced by the August meeting (so around a 65% probability we get a 50bp hike in one of the next three meetings). The curve then flattens a bit but there is still a further 49bp priced in for the final three meetings of the year (a cumulative 140bp).
- Euribor futures are up to 2.5 ticks higher through Reds and Greens. Markets continue to fully price a 25bp ECB hike in September and there is now 44bp priced by year-end.
- The Eurodollar curve is a couple of ticks off its overnight lows. 45bp is now priced for the May Fed meeting with 147bp priced by September (4 meetings) and 190bp priced by year-end (6 meetings).
EGB OPTIONS: Schatz put condor
Mar-23 08:19
DUK2 111.00/110.90/110.80/110.70 put condor bought for 1.75 in 10k
BOBL: Large Block trade
Mar-23 08:15
OEM2 9.25k at 129.81 (suggest a seller
