AUSTRIA: FPÖ's Kickl Confirms Accepting Mandate & Inviting ÖVP To Gov't Talks
Delivering a press statement a short time ago, leader of the right-wing populist Freedom Party (FPÖ) Herbert Kickl confirmed that he has accepted the mandate to seek to form a governing coalition, and has invited the conservative Austrian People's Party (ÖVP) to begin talks.
- Kickl said that refusing the mandate and ushering in snap elections would be the "obvious choice", referring to the widening of the FPÖ's lead over other parties in opinion polling since the September 2024 election. However, he claimed "That would have been the approach that puts the 'I' at the centre. But I have decided in favour of political responsibility and the 'we',"
- He does definitively rule out a fresh vote, though, saying during talks he wants "no tricks, no sabotage, but a policy for real change...stability [and] consistent partners". If these cannot be guaranteed then he can imagine snap elections.
- Kickl now proposes negotiations with the ÖVP to the FPÖ praesidium. Once approval is granted, Kickl reaches out to new ÖVP chair Christian Stocker (despite acknowledging the pair's "interesting past" in his statement) to start initial talks intended to lay the groundwork for full coalition negotiations.
- Even if a coalition agreement is eventually possible it is unlikely to arrive swiftly. As such, an interim chancellor to replace Karl Nehammer will be sworn in on 10 Jan. This individual must either be part of the caretaker gov't or be a senior official from the chancellery.
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MNI UST Issuance Deep Dive: Dec 2024 (2/2)
Throughout November’s policy and market volatility, though, Treasury auctions largely impressed, with 5 of 7 nominal coupon sales trading through.
- Auction Results: November’s nominal coupon auctions were generally strong, with five out of seven auctions trading-through, of which four saw a positive reading on MNI’s Relative Strength Indicator (RSI). The remaining two auctions; 3 and 20-year auctions tailed. See page 2.
- Upcoming Supply: Issuance resumes next week with sales of $58B in 3Y Note, $39B in 10Y Note (reopen), and $22B in 30Y Bond (reopen). December is set to see $15B in nominal Treasury coupon sales, in addition to $22B in 5Y TIPS and $28B FRN for a total of $365B – slightly below the Oct and Nov totals of $369B which were joint-highest since Oct 2021.
- MNI's review includes a calendar of upcoming auctions and buyback operations.
US TSYS/SUPPLY: MNI UST Issuance Deep Dive: Dec 2024 (1/2)
MNI's latest US Treasury Issuance Deep Dive has just been published (PDF link here):
November proved a dramatic month for Treasuries. Yields were volatile before and after the Nov 5 election - after ending October at 4.28%, 10Y yields peaked at five-and-a-half-month high just above 4.50% mid-month before closing November just below 4.18%, as markets attempted to price in the implications of a Republican “sweep”.
- Also buffeting rates was speculation over the would-be successor to Treasury Secretary Yellen. President-elect Trump’s selection of hedge fund manager Scott Bessent was greeted with bull flattening in the curve, implying perhaps that he’s seen as more cautious on fiscal deficits than some of the alternatives (he has expressed support for halving the annual budget shortfall to 3% of GDP).
- The first quarterly Refunding process of Bessent’s Treasury is in early February, by which point we may start to have a better sense of the incoming administration’s approach to both fiscal policy and to more issuance-specific considerations such as duration management.
- Bessent for instance has argued that Yellen’s Treasury erred from a risk management perspective by boosting short-duration issuance, and there are suggestions he would be in favor of reversing course, telling Bloomberg in June “When rates are very low, you should extend duration…I think it’s very unfortunate what Secretary Yellen’s doing. She’s financing at the front end, and she’s making a bet on the carry trade, which is not good risk management.”
US LABOR MARKET: MNI US Employment Insight: Soft Enough To Keep Fed Cutting
Our latest Employment Insight has just been published and emailed to subscribers.
