NETHERLANDS: Anti-Gov't Agrarian BBB Set To Surge In Regional Election

Mar-15 16:56

Voters in the Netherlands go to the polls today to vote for regional councils of the country's 12 provinces. The outcome of the provincial elections will have a wider impact on Dutch politics, with the States-Provincial set to elect the 75 members of the Dutch Senate on 30 May.

  • The provincial councils also play a major role in implementing gov't policies. A loss of seats for PM Mark Rutte's People's Party for Freedom and Democracy (VVD) and its coalition allies (CDA, D66, CU) could hinder policy implementation in the years ahead.
  • The anti-gov't agrarian Farmer-Citizen Movement (BBB) has surged in opinion polls since the 2021 legislative election. Given the lower turnout usually recorded in provincial elections, the high level of motivation among BBB supporters could see the party take second or even first place nationally, and become the largest party in up to five rural provinces.
  • The BBB has gained support from both rural and urban voters due to the gov'ts proposed environmental legislation. Rural voters and those reliant on farming oppose gov't plans to buy out farmers and reduce livestock herds to lower emissions.
  • Somewhat unexpectedly, the BBB has also gained support from some young, urban voters, with the gov'ts anti-emission legislation having the potential to halt construction projects due to their contribution of nitrogen to the atmosphere. However, this comes during a nationwide shortage of housing, with many young people unable to afford to get on the housing ladder due to constricted supply.
Chart 1. Netherlands General Election Opinion Polling, Seats and 6-Poll Moving Average

Source: Ipsos, Peil.nl, I&O Research, Kantar, MNI

Historical bullets

US TSYS: Market Roundup: Early Flow-Driven Whipsaw Action, Tue CPI Focus

Feb-13 16:55

Tsys trading mixed, inside range after early whipsaw action, curves flatter (2s10s -3.116 at -82.055) w/ Bonds outperforming (30YY 3.7933 -.0224) ahead midday. Thin early volumes with no data Monday, many sidelined to await Tuesday's CPI release MoM (0.1% rev, 0.5%); YoY 6.5%, 6.2%).

  • Tsys gained ahead the NY open, coinciding with Fed Gov Bowman talk at bank conf. Nothing exceptionally market moving "I'll expect that we will continue to increase the federal funds rate, because we have to, we have to bring inflation back down to our 2% goal," she said in a question and answer session at an American Bankers Association event.

  • Tsys reverse from pre-open highs on rate lock selling vs. several multi-tranche issuers CVS, Pepsi, Philip Morris. Precedent: CVS ranks third overall largest debt issuer w/ $40B over 9 tranches in Sep 2018. Philip Morris issued $6B over 5tranches in Nov 2022 while Pepsi has averaged $2.75B last couple years.
  • Tsys rebounded - see-sawing to new session highs over the next hour on the back of 5s (6.6k) and 10Y (16.9k) Block buys, receding again ahead the noon hour.

CYPRUS: Christodoulides Election Win Limits Prospect Of Unification deal

Feb-13 16:42

Former Foreign Minister Nikos Christodoulides secured a narrow win in the second round run-off for the Cypriot presidency on 12 February, defeating former Cypriot ambassador to the UN Andreas Mavroyiannis by 51.9% to 48.1%. Christodoulides ran as an independent, but received the backing of a number of centrist nationalist parties. Despite his first remarks following the win promising that unification would be a top priority, Christodoulides' hard-line stance on talks with the gov't of the Turkish-occupied north of the country means reaching an agreement looks like an improbable prospect during his tenure.

  • While the result limits the prospect of a deal, Christodoulides' presidency will calm financial markets. He hails from the same conservative DISY party as outgoing president Nikos Anastasiades, and given the still-fragile nature of the Cypriot economy following the banking sector crash of 2012-13 retaining foreign investor confidence could prove crucial for promoting growth.
  • Mavroyiannis had previously led negotiations between the Republic and the gov't of northern Cyprus and was seen as a deal-maker open to concessions to reach agreement. However, his backing from the post-communist AKEL unnerved centrist voters and markets, and ultimately may have cost him the presidency.

STIR: BLOCKS, Recent White Pack, 1Y Bundles

Feb-13 16:38
  • 6,000 Sep'23 1Y bundle (SFRU3-SFRM4) -0.035 at 1129:22ET after
  • 4,000 SOFR Wite packs (SFRH3-SFRZ3) -0.025 from 1120-1121ET