ENERGY: Canada Week: Oil Slump Has Stronger-Than-Usual Disinflationary Impact

As we head into Thursday's ECB decision, European bond futures' structural positioning has generally become more long-leaning as of the April 15 close compared with our last full biweekly update on April 7 (PDF here - we will publish a full update mid-next week after the long weekend).

• in Germany, Schatz is now very long (vs "long" on Apr 7), with Bobl now long (was "flat"), while Bund and Buxl have each moved out of "short" territory and are now flat.
• Elsewhere, BTP and Gilt are each now long (were "flat" in our last update).
• OAT is the exception across the space, remaining in short territory.
• The last week of trade has seen a mix of short covering, long-setting, and (in the case of Gilt) long reduction.

The second leaders' debate ahead of the 3 May general election has concluded, with neither PM Anthony Albanese or Leader of the Opposition Peter Dutton landing a knockout blow. As MNI noted yesterday (see 'AUSTRALIA: ALP Bolsters Lead In 2PPV Polling Ahead Of 16 April Leaders' Debate', 1700BST), Albanese's centre-left Australian Labor Party (ALP) has recorded an increase in support in recent weeks that puts it in pole position to win a second three-year term in office, with Dutton's centre-right Liberal/National party coalition falling behind in the two-party-preferred-vote polls (crucial given Australia's electoral system). 

• Political betting markets have shifted in line with opinion polling. On 28 March, when the election was officially called, data from Polymarket showed bettors giving Albanese a 51% implied probability of being the next PM, essentially a dead heat with Dutton. This has now shifted to a 79%-21% advantage in Albanese's favour.
• A significant portion of the debate focused on foreign policy, with both leaders asked about whether they trust US President Donald Trump and Chinese President Xi Jinping respectively. To both questions Albanese said he had "no reason not to", while Dutton demurred, saying he had not met them personally.
• Dutton was forced into a U-turn, acknowledging he had "made a mistake" in claiming that Indonesian President Prabowo Subianto had announced Russia would be given access to an airbase in the eastern province of Papua. Defence journal Janes had reported that Indonesia had received a request, but no statement from Prabowo was forthcoming. Albanese argued Dutton's initial accusations were “extraordinary” and said they showed he had “no understanding of the need for diplomacy”

Chart 1. Political Betting Market, Implied Probability of Next Australian PM, %

Source: Polymarket

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