STIR: BLOCK: Dec'25 SOFR Put Spread

Portugal HICP decelerated to 1.9% Y/Y in March, clearly below February's 2.5% and back at December 2023's 1.9%. The national CPI measure also saw some deceleration this month, for both headline (1.87% vs 2.39% Feb) and core (1.90% vs 2.45% Feb) with core defined as all items excl. unprocessed food and energy.

• Within the details, CPI excl. housing decelerated from 1.71% to 2.24% Y/Y (-0.53pps), a broadly similar moderation to that of headline, indicating that rental inflation saw a similar decrease as the wider index.
• Energy CPI played a large role in this moderation, easing from 1.50% to 0.04% Y/Y, with the deceleration driven by a sequential drop of -1.36% M/M. That's in line with Eurozone-wide sequential expectations for lower fuel prices in March. Unprocessed food CPI on the other hand accelerated to 2.76% Y/Y (2.40% Feb).
• For reference, Portugal contributes 2.6% to the overall Eurozone HICP 2025 basket.

After being found guilty of embezzlement, far-right Rassemblement National (National Rally, RN) figurehead Marine Le Pen has been declared immediately ineligible to run for public office. The ban is for five years, upending the 2027 presidential election in which she was the early frontrunner. Le Pen left the courtroom before her full sentence was read out (she was also fined EUR100k and sentenced to four years in prison (two suspended) that can be served with an ankle monitor). There will undoubtedly be an appeal, but following a constitutional court ruling earlier in the month, Le Pen will remain barred from running for office during the appeal. As such, unless her appeal is successful and swift, the RN will have to find another candidate to run in the 2027 presidential election. 

• The verdict marks a major point in French politics. Le Pen has run for the presidency three times, reaching the run-off in 2017 and 2022 and increasing her vote share each time. Recent scenario opinion polling, putting her up against various leftist, centrist, and conservative figures showed Le Pen either winning the run off or level-pegging. Given Le Pen's high profile, it remains to be seen whether her ban results in the RN failing to capitalise on widespread public anger at the Macron administration, or if choosing a less divisive figure could in fact boost the RN's chances of winning the presidency.
• The initial favourite to take on the RN's presidential mantle would appear to be party leader Jordan Bardella. However, by 2027, he will be just 31 years of age, potentially raising concerns about his experience and suitability.