EU ENERGY SECTOR: Elliott To Push For Further Changes At BP
Mar-21 11:30
BPLN
Nothing much new; management are facing pressure from both sides of the BP debate ahead of the 17 April AGM. They have argued that the bulk of shareholders are happy with the revised plans and the equity has performed broadly in line with peers since the Elliott story broke and since the CMD.
- Two BP shareholders have told Reuters that Elliott have met several large shareholders.
- The two shareholders, and Elliott, are pushing for additional changes.
- Mentioned measures include management changes, spending <$13bn (vs. $13-15bn under new plans) and more asset sales including petrol stations and a complete renewable exit.
- Follows headlines yesterday that a small ESG investor, Follow This (<1% stake), is also pushing for management changes (specifically Chairman Helge Lund) on the pivot back towards O&G.
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STIR: Fed Rates Fade Hawkish Shifts In ECB and BoE Pricing
Feb-19 11:30
- Fed Funds implied rates are little changed overnight as they consolidate yesterday’s climb.
- There is little sign of reaction to Trump’s latest tariffs threats (focused on autos, pharmaceuticals and semiconductors, more details due Apr 2) or hawkish shifts in BoE (CPI) and ECB (Schnabel) pricing.
- Cumulative cuts from 4.33% effective: 0.5bp Mar, 3.5bp May, 13bp Jun, 17.5bp Jul, 26bp Sep and 36bp Dec.
- It’s another quieter US macro calendar, with the FOMC minutes eyed at 1400ET. They will be scrutinized primarily for three things: why the Fed shifted its statement language on inflation; was there any discussion of a rate hike scenario; and was there any further discussion over the potential impact of government policy shifts?
- MNI FOMC Minutes Preview.
- Vice Chair Jefferson also talks on the household balance sheet at 1700ET with both text and Q&A. He last spoke Feb 4, talking on the need for caution along with many of FOMC members: “As long as the economy and labor market remain strong, I see it as appropriate for the Committee to be cautious in making further adjustments… Over the medium term, I continue to see a gradual reduction in the level of monetary policy restraint placed on the economy as we move toward a more neutral stance as the most likely outcome…that said, I do not think we need to be in a hurry to change our stance.”
EGBS: Bund ration Put Spread
Feb-19 11:18
RXM5 130.50/129.00ps 1x2, bought the 1 for -19 (receive) in 2k.
STIR: Year-end ECB Implied Rates Rise 4bps On Schnabel Comments
Feb-19 11:18
Hawkish repricing in ECB-dated OIS following Executive Board member Schnabel’s interview with the FT. OIS price 72bps of easing through year-end (vs 76bps before the interview was released).
- Schnabel’s comments were hawkish leaning, but not overly surprising given her traditional stance on monetary policy. In particular she said “we are getting closer to the point where we may have to pause or halt our rate cuts”
- There are 54bps of cuts priced through the June decision (i.e. more than fully pricing 2x25bp cuts across the next three meetings).
- March pricing is unsurprisingly stickier (23.5bps of cuts priced vs 24bps prior), with a 25bp cut comfortably baked into consensus already. Schnabel said the bank will have a discussion on dropping the reference to policy restrictiveness in March, but did not provide any further signals for the decision.
- Euribor futures now -1.5 to -4.5 ticks through the blues.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.431 | -23.5 |
| Apr-25 | 2.290 | -37.7 |
| Jun-25 | 2.127 | -53.9 |
| Jul-25 | 2.073 | -59.3 |
| Sep-25 | 1.998 | -66.8 |
| Oct-25 | 1.977 | -68.9 |
| Dec-25 | 1.945 | -72.2 |
| Feb-26 | 1.941 | -72.5 |
| Source: MNI/Bloomberg. | ||
