EU: Euronews-Ukraine Aid Back In Draft EUCO Conclusions
Ahead of the special European Council summit taking place on Thursday 6 March, Jorge Liboreiro at Euronews posts on X: "EUCO latest: The Kaja Kallas plan is back in the draft conclusions, after being removed. “The European Council calls on the Council to advance work swiftly on initiatives, notably that of the High Representative, to coordinate increased EU military support to Ukraine"." Previous reports had suggested that the EUR20B package of emergency aid for Ukraine had been left out of the draft conclusions due to objections from Hungarian PM Viktor Orbán.
- Comes after Rikard Jozwiak at RFE/RL reported on 3 March that "one more line has now been added in the last EU summit draft: - peace must respect Ukraine’s independence, sovereignty and territorial integrity.", adding this morning "at the moment it looks like Hungary might opt out of the Ukraine part of the EU summit (6 March) conclusions".
- It remains to be seen what stance Hungary will take; whether Orbán sides with the rest of the EU or follows the precedent set in late 2023. During that EUCO, Orbán left the room 'for a coffee' at the suggestion of German Chancellor Olaf Scholz, allowing for a unanimous vote within the Council.
- In the wake of US President Donald Trump's pause on military aid to Ukraine, the EU's provision of a EUR20B package is seen as an important signal to Kyiv (and Moscow) of Brussels' intention to maintain its posture vis-a-vis the war.
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MNI: UK FINAL JAN MANUF PMI 48.3 (FLASH: 48.2); DEC 47.0
- MNI: UK FINAL JAN MANUF PMI 48.3 (FLASH: 48.2); DEC 47.0
OPTIONS: Expiry Pipeline Adds to Positive USD/CAD Backdrop
Given the sharp spot swings from the re-opening of trade - a series of sizeable FX expiries set to roll-off both today as well as later in the week are now in close proximity, with markets particularly focusing on larger $1.0325 EUR/USD strikes today (E1.5bln set to roll off here) and Y155.00 strikes in USD/JPY ($650mln).
- The sharper moves for USD/CAD brings >$800mln at C$1.4895 on Wednesday but, more notably, it's the ~$3bln set to roll off between C$1.4740-1.4800 - a sizeable proportion of which is made up of calls, and could keep prices supported across the week and through the dual US/Canadian jobs reports set for Friday.
- Today's pipeline:
• EUR/USD: $1.0200(E507mln), $1.0325(E1.5bln), $1.0350(E710mln), $1.0370-75(E662mln), $1.0400(E1.8bln), $1.0420-25(E1.2bln)
• USD/JPY: Y155.00($646mln)
• USD/CAD: C$1.4400($1.6bln)
EUROPEAN INFLATION: Italy Provisional 2025 Inflation Basket Weights
- Ahead of the 10:00GMT / 11:00CET Italian inflation release, Istat has released the provisional weights for 2025 with upward revisions for services & energy and downward revisions for core goods.
- The main changes to the HICP ECOICOP divisions weights (see table below) are greater weight for housing and utilities ("Housing, water, electricity, gas and other fuels" revised +0.7pps), and less importance for recreation and culture (-1.0pps). See the table below.
- The inflation weights are usually revised alongside the final release on 21 February 2025.
- The 2025 CPI NIC weights for the main special aggregates:
- Services 44.0918% (vs 43.3978% in 2024)
- Inflation ex energy, food, alcohol and tobacco 69.1245% (vs 69.5454% in 2024 i.e. the HICP definition of core)
- Core inflation using the NIC definition (i.e. ex energy and unprocessed food): 82.5648% (vs 82.8803% in 2024)
- NEIG 25.0327% (vs 26.1476% in 2024), Energy 10.7690% (vs 10.3568% in 2024)
- Main products added to the basket to represent the changes in the household spending patterns or to improve the coverage of expenditure aggregates already represented in the basket, are: Speck, Women’s shorts, Ceiling lamp, Mattress topper, Bicycle inner tube, Windshield Wiper Blades, Dog waste bags, Pet bowls, and Ice cream cone.
- COVID-19 antibody serological test and COVID-19 molecular swab test have been removed from the basket.
