BASIC INDUSTRIES: IMCD (IMCDNA Baa3/NR/BBB-): 1Q25 Results

House Speaker Mike Johnson (R-LA) and Senate Majority Leader John Thune (R-SD) yesterday agreed on a framework for legislating President Donald Trump's agenda, reaching a compromise on strategy after months of public disagreement.

• Thune agreed to pursue a single 'big beautiful bill', dropping the Senate's preferred two-bill strategy. Thune confirmed he wants to pass a compromise budget resolution by the Easter recess, giving just over two weeks to hammer out a budget blueprint that can pass both chambers.
• Thune agreed to raise the debt limit in the reconciliation package, a move that will rankle with deficit hawks. Senator Rand Paul (R-KY) said in response: “They’ve lost me.... There will be other conservatives who they will lose..." However, in light of recent votes in the House, the baseline view is that House conservatives will ultimately get behind a Trump-endorsed package, regardless of deficit implications.
• Including the debt limit in reconciliation means the GOP will not need Democratic votes - removing a potential leverage point for Minority Leader Chuck Schumer (D-NY)-, but it will set a hard deadline for passing the package that leaves little room for miscalculation.
• The Bipartisan Policy Center projected on Monday that the X Date, when the federal government hits its borrowing limit without Congressional action, is likely to come between mid-July and early October. BPC noted that uncertainty over tax receipts and disaster relief presents "room for considerable fluctuations", with a narrower projection to be released in April.
• The Congressional Budget Office will publish its X Date projection at 10:00 ET 14:00 GMT today.  

This morning, Italy will hold a BTP Short Term and BTPei auction. On offer will be E2.5-3.0bln of the on-the-run 2.55% Feb-27 BTP Short Term (ISIN: IT0005633794) alongside E1.0-1.5bln of the 1.50% May-29 BTPei (ISIN: IT0005543803).

• The 2.55% Feb-27 BTP Short Term was launched in January, and the February re-opening attracted a 1.59x bid-to-cover ratio for the E2.75bln issued.
• The MNI Policy Team recently report that Europe’s push for increased defence spending is exacerbating tensions within the Italian government, with Prime Minister Giorgia Meloni worried about a Europe-wide rise in borrowing costs and her deputy calculating whether to abandon the coalition if rearmament becomes too politically unpopular.
• Signs of Italian fiscal conservatism relative to Germany should continue to help facilitate demand at BTP auctions, even with the current 2.55% Feb-27 BTP Short Term spread to the 2.20% Mar-27 Schatz close to YTD lows of 27bps.
• The 1.50% May-29 BTPei has attracted an average bid-to-cover ratio of 1.61x for amounts issued of between E1.00-1.25bln across the last five re-openings. The current implied break-even rate for this BTPei is 193.9bps, up from a low of 160.6bps at the start of this year.
• Italy will also hold a 5/10-year BTP and CCTeu auction this Thursday,
• Timing: Results will be available shortly after the bidding deadline closes at 1000GMT.

• EUR/USD: $1.0690(E912mln), $1.0775-90(E766mln), $1.0900-25(E2.3bln)
• USD/JPY: Y148.00-10($932mln), Y151.74($519mln), Y152.00($955mln)
• AUD/USD: $0.6370-80(A$699mln)
• USD/CAD: C$1.4200($556mln), C$1.4240($634mln), C$1.4500($781mln)
• USD/CNY: Cny7.2430($600mln), Cny7.3000($500mln)