HYBRIDS: Abertis (ABESM: Perps BB/BB+) Tender Results

Thursday’s high of 131.83 has contained upside in Bund futures so far this morning, shielding the April 7 high and bull trigger at 132.03. The contract is +10 at 131.81, having now fully recovered from the sharp German fiscal announcement-induced selloff in early March, with tariff-related growth risks driving dovish ECB repricing in the weeks since. 

• There wasn’t much reaction to yesterday’s weakness in US Treasuries, which was largely in response to US President Trump’s continued threats against Fed Chair Powell’s position.
• The German curve has bull steepened, with 2-year yields down ~2.5bps despite 5bln of the new 1.70% Jun-27 Schatz on offer at 1030BST.
• No tangible outperformance in 10-year GGBs to S&P’s rating upgrade (to BBB; Outlook Stable) on Friday after hours (spread unch today at ~87.5bps), with Greece’s improving fiscal trajectory already well documented.
• ECB’s Rehn re-iterated that US tariffs may have a negative impact on Eurozone inflation in the short-term, albeit with conflicting impacts in the medium term.
• The ECB’s Q2 Survey of Professional Forecasters was conducted between April 1-4th, so is already quite stale given the latest US tariff developments.
• Flash April consumer confidence is due at 1500BST today, with ECB President Lagarde also set to speak with CNBC at that time. We don't expect much deviation from Lagarde compared to last Thursday's dovish press conference.

As MNI noted earlier (see 'FOREX: AUD Crosses - Tread Water As USD Sold Across The Board'. 0158BST), early and mobile voting are now underway ahead of the 3 May federal election. Opinion polling showa PM Anthony Albanese's centre-left Australian Labor Party (ALP) in an increasingly-strong position, with a growing advantage in the two-party-preferred-vote and ahead of the centre-right Liberal/National coalition in a primary vote poll for the first time since Oct 2023. 

• The third leaders' debate between Albanese and Coalition leader Peter Dutton gets underway on the Nine Network at the bottom of the hour.
• In the 2022 federal election, 36.9% of all ballots cast were done so in the early voting period, while 14.3% were postal ballots, resulting in less than half the total number of votes being cast on election day.  
• There will be some focus on whether early voting can result in a different outcome than expected, as it limits the impact of late policy announcements or political gaffes on behalf of a party or candidate. However, an individual who has long made up their mind over which party they are going to back will be more inclined to vote early, compared to a swing or floating voter who is yet to decide, allowing more time for the campaign to make an impact on their decision.
• Political betting markets now give Albanese an 84% implied probability of winning re-election, up from 51% on 28 March when the election was called, and a recent low of 27% on 24 Jan. 

Chart 1. Political Betting Market, Next Australian Prime Minister?, Implied Probability %

Source: Polymarket