ISRAEL: Axios-US' Witkoff Presents Updated Gaza Ceasefire Plan
Axios reports that US Middle East envoy Steven Witkoff has presented an updated Gaza ceasefire proposal that would see the current temporary ceasefire extended until both the Muslim holy month of Ramadan and the Jewish Passover festival have concluded (31 March and 20 April, respectively). In return, Hamas would release additional hostages while flows of humanitarian aid to Gaza would resume.
- The previous first phase ceasefire deal expired on 1 March, with talks on a phase two deal yet to get underway in earnest.
- Witkoff was in Doha, Qatar on 11 March, where he held meetings with Qatari and Egyptian negotiators and the Israeli delegation.
- The proposal sees the extended ceasefire being used by Israel and Hamas to thrash out a long-term truce in Gaza.
- Axios: "A source with knowledge of the talks said Israel gave Witkoff a positive response. [...] The three sources said the mediators are now waiting for Hamas' response. "Hamas had rejected similar proposals before but they also want to avoid going back to fighting during Ramadan," one of the sources said."
- Witkoff did not speak with Hamas directly, Hostage release envoy Adam Boehler has reportedly been removed from his position following his direct backchannel talks with Hamas seeking the release of American hostages.
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EU-BOND SYNDICATION: 2.50% Dec-31 EU-bond / 3.25% Feb-50 Green:
2.50% Dec-31 EU-bond
- Reoffer: 99.049 to yield 2.654%
- Spread set at MS+37bps (guidance was: MS + 39bps area)
- Size: E6bln WNG (MNI expected E4-6bln)
- Books closed in excess of E76bln (inc E4.5bln JLM interest)
- HR 111% vs 0% Aug-31 Bund. Spot ref: 86.76 + 44.5bps
- ISIN: EU000A3L1DJ0
- Timing: TOE 14:32GMT / 15:32CET. FTT immediately.
3.25% Feb-50 Green EU-bond
- Reoffer: 98.209 to yield 3.357%
- Spread set at MS+108bps (guidance was: MS+110bps area)
- Size: E5bln WNG (MNI expected E4-6bln)
- Books closed in excess of E69bln (inc E5.5bln JLM interest)
- HR 129% vs 0% Aug-50 Green Bund. Spot ref: 51.52 + 72.2bps
- ISIN: EU000A3K4EU0
- Timing: TOE 14:29GMT / 15:29CET. FTT immediately.
For both
- Settlement: 18 February 2025 (T+5)
- JLMs: Citi / DB / HSBC / Morgan Stanley (B&D/DM) / Societe Generale
From market source
STIR: Just Over 60bp Of BoE Cuts Priced Through Year-End
Modest hawkish repricing in GBP STIRs has come alongside weakness in the long end.
- Hawkish caveats from BoE’s Mann (detailed earlier) also helped the direction of travel this morning.
- BoE-dated OIS now showing ~61bp of cuts through year-end vs. ~64bp early today.
- Markets price 5bp of cuts through March (we have previously suggested that the vote split could be much tighter than many expect, if the Bank does remain on hold at the event), with the next cut fully discounted through May (matching our own expectation).
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Cut-Adjusted SONIA Rate (bp) |
Mar-25 | 4.406 | -4.8 |
May-25 | 4.204 | -25.0 |
Jun-25 | 4.122 | -33.2 |
Aug-25 | 3.973 | -48.1 |
Sep-25 | 3.937 | -51.7 |
Nov-25 | 3.863 | -59.1 |
Dec-25 | 3.845 | -60.9 |
SEK: Targeted EU Tariffs The Key Upside Risk To EURSEK
The latest bid in European equity futures helps EURSEK pierce the Sep 27 low at 11.2450, exposing the June 20 low at 11.1824. EURSEK is on course for a seventh consecutive lower close, prompting to cross to screen as most oversold since 2012 on a 14-day RSI basis.
- The combination of tighter EUR vs SEK rate differentials (following the January Riksbank minutes and higher-than-expected Swedish CPI reading) and buoyant European equities have provided a conducive environment for SEK strength this month.
- Targeted US tariff action on the EU presents the most obvious upside risk to the cross. European risk assets have been happy to look through the last night’s steel/aluminium tariff announcement, but focus remains on the outcomes of the April 1 US trade policy report. This report is expected to provide Trump with an economic rationale to impose (further) tariffs on trade partners like China and the EU.
- The 20-day EMA at 11.4161 represents key resistance in EURSEK, with shallower reversals considered to be corrective.
- Riksbank Deputy Governor Seim is scheduled to speak at 1700GMT today, but text will be released at 1500GMT. Seim came across as one of the most cautious Executive Board members in the January Riksbank minutes.
