HYBRIDS: Alliander: New Green Hybrid Final 4.20%

Leader of the right-wing populist party Reform UK, Nigel Farage, has claimed that financial market turmoil could spark a snap general election. Answering press questions following a high-profile speech outlining Reform's 'Operation Restoring Justice' plans for mass deportations of illegal immigrations, Farage was asked a question that referred to the next election being due in 2029. 

• Responding, Farage said: "Four years to the next election, do you really think so? I think the 30-year bond market is giving us a somewhat different indication. Particularly as we have a chancellor of the exchequer [...] who is clearly desperately out of her depth, and actually I'm not sure there's anybody in the Cabinet who really has a clue how to turn around the economic downward spiral, and possibly even fiscal doom-loop that we're beginning to enter into. So [the gov't] may not last quite as long as you think."
• Data from Smarkets assigns a 33.6% implied probability that PM Sir Keir Starmer leaves office in 2029 or beyond, meaning a cumulative 66.4% implied probability that he leaves No.10 between 2025-28.
• The main threat to Starmer's position is likely to come from an internal challenge within his centre-left Labour Party, rather than a snap general election. Labour holds a large majority in the House of Commons, and with the party trailing Reform UK by an average of 8.5% in August polling, the chances of the gov't triggering an election at this point are minimal.
• Political focus in September will swiftly coalesce around the annual party conference season. Reform UK holds its conference significantly ahead of the other main parties. on 5-6 September. The centrist Liberal Democrats follow on 20-23 Sep, Labour on 27 Sep-1 Oct, and the Conservatives on 5-8 Oct. 

Chart 1. General Election Opinion Polling, % and 6-Poll Moving Average

Source: YouGov, More in Common, Opinium, Techne, Find Out Now, Freshwater Strategy, BMG, Survation, Lord Ashcroft Polling, Focaldata, JL Partners, Whitestone Insight, Deltapoll, Stonehaven, We Think, MNI

• In the FI space, Bund futures are unchanged and remain above their recent lows. A bear threat is present. The contract recently breached 128.84, the Jul 25 low. Note that 129.00 represents the base of a broad range. A clear range breakout would strengthen a bearish theme. This would open 128.40 initially, the Apr 9 low. Strength above the 50-day EMA of 129.80, is required to signal a reversal. Resistance at the 20-day EMA is at 129.51.
• A bear cycle in Gilt futures remains in play. Note that on the continuation chart, moving average studies are in a bear-mode position, highlighting a clear downtrend - for now. First support to watch is 90.31, the Aug 22 low. It has been pierced, a clear break would resume the bear leg and open the 90.00 handle. Initial resistance is at 91.24, the Aug 18 high.

• E3bln WNG (excl. E250mln issuer retention) of the new 7-year Sep-32 RAGB
• Spread set earlier at MS+30 (guidance was MS+33 area)
• Books closed in excess of EUR 19bn, including EUR 1.8bn JLM interest
• Format: Reg S, Bearer, 144A eligible, CAC
• Settlement: 02 September 2025 (T+5)
• Maturity: 20 September 2032 (7Y)
• Coupon: TBD, Fixed, Ann., ACT/ACT (Long 1st to 20 September 2026)
• ISIN: AT0000A3NY15
• Bookrunners: BofA / DB(DM/B&D) / Erste Group / HSBC / JPM / Raiffeisen Bank International
• DB=DM/B&D. HR 103% vs DBR 1.7 08/15/32
• Hedge deadline 13.40CET / 12.40UKT

From market source