EU: Commission-18 Countries Apply For EUR127bln In Defence Loans Under SAFE
The European Commission has confirmed that an initial 18 member states have applied for a combined EUR127bln in loans to fund military procurement as part of the Security Action for Europe (SAFE) Defence Instrument. Belgium, Bulgaria, Czechia, Estonia, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Hungary, Poland, Portugal, Romania, Slovakia and Finland have all applied under the scheme, with applications running to 30 November.
- Euractiv outlines the process of application, assessment, and disbursal of funds: "Member states now have six months from the entry into force of the Regulation [29 May] to submit their initial national plans, which the Commission will then assess. Following a Commission proposal, the Council is expected to adopt implementing decisions, which will include the size of the loan and any pre-financing. Pre-financing, which can be up to 15% of the loan, will ensure that support can be paid swiftly to cover the most urgent needs, potentially starting in 2025. Member states will need to report on the progress of implementation when they submit their payment requests, which can be done twice a year. The last approval for disbursements can take place until 31 December 2030."
- The SAFE loans are seen as a major component of the 'Readiness 2030' plans (formerly known as 'ReArm Europe', but changed due to political sensitivities in Italy and Spain), alongside allowing the 'national escape clause' of the Stability and Growth Pact to allow for increased defence spending up to an additional 1% of GDP.
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LOOK AHEAD: Monday Data Calendar: MNI Connect Event - Atlanta Fed Bostic Outlook
- US Data/Speaker Calendar (prior, estimate)
- 06/30 0945 MNI Chicago PMI (40.5, 42.9)
- 06/30 1000 Atlanta Fed Bostic economic outlook at MNI event (no text, Q&A)
- 06/30 1030 Dallas Fed Manf. Activity (-15.3, -12.0)
- 06/30 1130 US Tsy $79B 13W & $71B 26W bill auctions
- 06/30 1300 Chicago Fed Goolsbee moderated discussion at Aspen Ideas Festival
- Source: Bloomberg Finance L.P. / MNI
US TSY FUTURES: Net Short Setting Most Prominent On Friday
OI data points to net short setting dominating on Friday, with the most prominent positioning adjustment coming in WN futures (~$3.1mn DV01).
- Modest net long cover was seen in FV & US futures.
| 27-Jun-25 | 26-Jun-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 4,269,109 | 4,253,499 | +15,610 | +603,799 |
FV | 7,116,709 | 7,119,040 | -2,331 | -101,770 |
TY | 5,037,897 | 5,016,950 | +20,947 | +1,399,846 |
UXY | 2,411,409 | 2,404,834 | +6,575 | +580,670 |
US | 1,758,599 | 1,760,182 | -1,583 | -200,474 |
WN | 1,904,272 | 1,887,316 | +16,956 | +3,103,720 |
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| Total | +56,174 | +5,385,792 |
US 10YR FUTURE TECHS: (U5) Holding On To Its Recent Gains
- RES 4: 114-14 High Apr 7 and key resistance
- RES 3: 113-07 76.4% retracement of the Apr 7 - 11 bear leg
- RES 2: 112-23 High May 1 and key resistance
- RES 1: 112-04+ High May 2
- PRICE: 111-31 @ 11:16 BST Jun 30
- SUP 1: 111-11+/110-27 Low Jun 25 / 50-day EMA
- SUP 2: 110-10+/109-28 Low Jun 16 / Low Jun 6 / 11
- SUP 3: 109-12+ Low May 22 and the bear trigger
- SUP 4: 109-09+ Low Apr 11 and key support
Treasury futures traded higher last week and the contract is holding on to its gains. Resistance at 111-14+, the Jun 5 high and 61.8% of the May 1 - 22 downleg, has been cleared. The break strengthens a bullish cycle. Note too that last Thursday’s gains delivered a print above 111-30, 76.4% of the May 1-22 downleg. A clear break of this level would strengthen current conditions. Initial pivot support to watch lies at 110-27, the 50-day EMA.
