GERMANY: Constitutional Court Rejects Solidarity Surcharge Appeal
Matching media reports headline on the German constitutional court rejecting the solidarity surcharge appeal, which could have seen a potential E65bln levy payback to taxpayers in a worst-case scenario if it had gone through.
The rulings will be seen as a boost for the incoming Chancellor, but are broadly as-expected. The rulings effectively mean that the federal authorities can keep raising the solidarity surcharge, and no fiscal gap is to be created, as would have been feared if the appeal would have gone through.
- No tangible reaction in Bunds/ASWs given the lack of feedthrough for issuance.
- Note that the worst-case fiscal outcome for the government i.e. the one that would have generated the most meaningful increase in issuance from an adverse ruling, was viewed as a low likelihood outcome, explaining the lack of a Bund rally in the wake of the announcement.
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BOE: A number of speakers at BOE's BEAR Conference
BOE's Lombardelli has just finished speaking, giving the intro to the BOE's research conference (BEAR) with the focus this year on the balance sheet.
- This morning sees a session on QT (chaired by Andrea Rosen due to start imminently) with a keynote on "Balance Sheet Policy" from Annette Vissing-Jorgensen (Federal Reserve Board) with Pill chairing this (11:15GMT).
- This afternoon Ramsden will chair a panel (13:15GMT) with BOE's ED of Markets Vikcy Saporta participating.
- Tomorrow's highlights will be remarks and a Q&A from Dallas Fed Chair Logan (9:15GMT) ahead of a keynote speech from ECB's Schnabel (13:00GMT) and then closing remarks by Pill (14:00GMT).
MNI: GERMANY FEB IFO BUSINESS CLIMATE INDEX 85.2
- MNI: GERMANY FEB IFO BUSINESS CLIMATE INDEX 85.2
SWITZERLAND DATA: Labour Market Softens On Demand Side But Remains Solid
Swiss employment (excl. agriculture) rose +0.9% Y/Y and +0.1% Q/Q in Q4 2024. The slight sequential increase was based on employment rising both in the tertiary sector, as well as in industry and construction, by 0.1%.
- While the data suggests some labour market softening on the demand side, the figures overall underpin the narrative that the Swiss economy remains on a solid enough footing, meaning little requirement for the SNB to move policy into accommodative territory from a business cycle perspective.
- "Enterprises reported 17.1% fewer vacancies than a year earlier. Difficulties recruiting personnel have declined slightly. In addition, the employment outlook remained positive despite enterprises' cautious estimates", the Swiss statistics agency adds.
- Considering Q4's season- and sports event-adjusted real GDP growth of 0.4%, the sequential employment figures suggest rising productivity last quarter in Switzerland.
