SOUTH KOREA: Han-Won't Stand For Presidency If PPP Doesn't Agree To Unity Ticket
Former PM and acting President Han Duck-soo has said that if he and the candidate for the conservative People Power Party (PPP) cannot agree to team up ahead of the 3 June presidential election, then he will not run for the presidency. Han has talked up the idea of running on a joint ticket with former labour minister Kim Moon-soo/ In recent days Han has attempted to distance himself from the presidency of the now-impeached Yoon Suk-yeol, arguing that "I was always against martial law," but criticising the 30+ impeachments against gov't ministers and officials brought by the opposition liberal Democratic Party of Korea (DPK).
- Opinion polling shows that if Han and the PPP cannot agree on some form of unity agreement, the DPK candidate Lee Jae-myung is the strong favourite to win the election. If the PPP sides with the pro-business, North Korea hardliner Moon over the long-serving technocrat Han, polls show Moon losing to Lee in a two-way contest. Unless there is a notable change in polling, the only scenario in which Lee faces a stern challenge is if the PPP swings behind Han as the conservative camp's nominee.
- Separately, Seoul's High Court has shifted its re-ruling and sentencing of Lee on charges of violating election law to 18 June. This means Lee will be eligible to run in the 3 June contest. It remains to be seen whether the re-ruling continues should Lee win the election.
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EURIBOR OPTIONS: LARGE Call spread seller
0RK5 98.00/98.125 cs, sold at 9 in 52k.
EGBS: 10-year BTP/Bund Spread On Track For Largst 1-day Rise Since SVB Collapse
The 10-year BTP/Bund spread is just off intraday widest levels as European equities find a short-term base, but remains almost 11bps wider today at ~130bps. Heavy risk-off price action following the US administration’s tough weekend tariff rhetoric has favoured the safe-haven of Bunds, with heightened uncertainty around the near-term outlook also disincentivising carry vehicles such as BTPs.
- A close at current levels for BTP/Bund would be the highest since the US election result in early November, with the spread on track for the largest 1-day increase since March 2023 (around the time of the SVB collapse).
- GGBs also widen ~11bps on the session to ~95bps, narrowing the gap to the psychological 100bp handle.
- Over the weekend, Politico reported that the Spanish and Italian economy ministers are pushing for a negotiation-centred EU response to US tariffs, but France and Germany continue to favour for a more forceful retaliation.
- A reminder that Spain announced a E14bln fiscal package to mitigate the impact of US tariffs last week. The 10-year SPGB/Bund spread is 7bps wider at 76bps at typing.
BUNDS: German 10yr Yield is testing the 2.45% level
- A very volatile session for Bund in very heavy Volumes. Just tested a new intraday high, with next Technical resistance noted at 132.04.
- Looking at the 10yr Yield it is testing the 2.45% level right here, printed a 2.446%.
Today, reference 131.75:
- 2.40% = 132.27.
