GERMANY: AfD Classified Proven Right-Wing Extremists By Intel Services; Risk Ban
Germany's domestic intelligence agency, the Federal Office for the Protection of the Constitution (BfV), earlier today classified the main opposition Alternative for Germany (AfD) as a “proven right-wing extremist organization,” in a declaration that will allow for greater surveillance of the party. Previously, the BfV had classified the AfD as "suspected right-wing extremist", with only individual state-level AfD organisations placed in the formal 'proven extremist' bracket.
- The classification is likely to see an uptick in demands from critics demanding that the party be banned nationwide. With around one-fifth of the seats in the Bundestag and set to form the official opposition once the incoming 'grand coalition' led by Friedrich Merz is sworn in, such a move would be hugely controversial.
- Recent opinion polling has shown the AfD either leading nationwide or level with Merz's centre-right Christian Democratic Union (see chart below). There have been calls from some on the right of the CDU arguing eventually working with the AfD will be required to keep the left out. The BfV's ruling may quieten these voices (at least for now).
- The AfD leadership has called the classification "a severe blow to German democracy", claiming the party is "now being publicly discredited and criminalised shortly before [a] change of gov't". Says the "targeted interference in the democratic decision-making process is therefore clearly politically motivated." Indeed, the report and any campaign to ban the AfD is likely to reinforce views held by large numbers of the party's support that the system is 'rigged' against them, resulting in a doubling-down on backing for the AfD.
Chart 1. Federal Election Opinion Polling, % and 3-Poll Moving Average
Source: Forsa, INSA, YouGov, Verian, FGW, Allensbach, Infratest dimap, MNI. N.b. First data point indicates vote share in 23 Feb federal election.
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US TSY FUTURES: Long Setting Most Prominent On Tuesday
OI data points to net long setting across most contracts daring Tuesday’s rally, with modest net short cover in TY providing the only exception to the wider theme.
- Net long setting in US & WN provided the most meaningful DV01 equivalent positioning swings
| 01-Apr-25 | 31-Mar-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 3,919,492 | 3,914,677 | +4,815 | +185,170 |
FV | 6,520,775 | 6,486,976 | +33,799 | +1,475,981 |
TY | 4,890,597 | 4,899,400 | -8,803 | -569,479 |
UXY | 2,323,239 | 2,318,865 | +4,374 | +393,612 |
US | 1,844,360 | 1,824,491 | +19,869 | +2,633,213 |
WN | 1,814,377 | 1,804,151 | +10,226 | +2,003,337 |
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| Total | +64,280 | +6,121,834 |
STIR: Than Three Cuts Priced For 2025 Ahead Of Tariff Announcement
- Fed Funds implied rates have slipped 1-1.5bp on recent headlines that China is to restrict companies from investing in the US.
- The implied rate path sits towards the middle of the week’s already reasonably wide range ahead of today’s “Liberation Day” tariff announcements due 1600ET, but are still dovish by post Trump inauguration standards.
- Cumulative cuts from 4.33% effective: 5bp May, 21.5bp Jun, 37.5bp Jul and 78bp Dec.
- The 77.5bp of cuts for the year compares with Monday’s 72.5-81.5bp range.
- The SOFR implied terminal yield meanwhile, at 3.37% in the U6 contract, is just 0.5bp higher than yesterday’s fresh lowest close since Oct 2024 (i.e. prior to the Nov presidential election).
- Today’s data provides near-term focus with ADP employment and final durable goods but with attention firmly on the tariffs announcement at 1600ET.
- The latter are likely to overshadow Fed Gov. Kugler (permanent voter) speaking on inflation expectations and policy making at 1630ET (text + Q&A). She last spoke Mar 25 when we interestingly honed in on core goods inflation, saying recent prints have been unhelpful and affect expectations. She was watching the pick-up in inflation and inflation expectations and reiterated that the Fed can hold rates steady for “some time”.
LOOK AHEAD: Wednesday Data Calendar: ADP Private Employment, Tariff Announcement
- US Data/Speaker Calendar (prior, estimate)
- 02-Apr 0700 MBA Mortgage Applications (-2.0%, --)
- 02-Apr 0815 ADP Employment Change (77k, 120k)
- 02-Apr 1000 Factory Orders (1.7%, 0.5%)
- 02-Apr 1000 Durable Goods Orders (0.9%, 0.9%)
- 02-Apr 1000 Cap Goods Orders Nondef Ex Air (-0.3%, --)
- 02-Apr 1000 Cap Goods Ship Nondef Ex Air (0.9%, --)
- 02-Apr 1130 US Tsy $60B 17W bill auction
- 02-Apr 1500 WH reciprocal tariff annc from Rose Garden
- 02-Apr 1630 Fed Gov Kugler on inflation expectations (text, Q&A)
