US DATA: Initial Jobless Claims Hold Historically Low Levels
Latest jobless claims data saw the initial claims four-week average push closer to cycle lows. Conti...
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UK FISCAL: OBR GDP Forecasts
Reeves: Average growth over the forecast period is largely unchanged but the profile is different:
| GDP | Old | New |
| 2026 | 1.4 | 1.1 |
| 2027 | 1.5 | 1.6 |
| 2028 | 1.5 | 1.6 |
| 2029 | 1.5 | 1.5 |
| 2030 | 1.5 |
UK FISCAL: Reeves Places Spring Statement In Context Of Geopolitical Uncertainty
Delivering her Spring Forecast Statement, Chancellor of the Exchequer Rachel Reeves looks to place the statement in the context of the wider unstable geopolitical landscape. Reeves: "...a plan that is even more important in a world that in the last few days has become yet more uncertain. It is incumbent on me and on this government to chart a course through that uncertainty… …to secure our economy against shocks".
- Reeves: "I want to reassure this House that I am in contact with my international counterparts, with the Governor of the Bank of England, and with key affected industries… …including our maritime sector. And tomorrow, I will meet with our North Sea industry leaders to discuss the implications they face...and work with them to manage this uncertain period."
- Reeves: "Stability is the single most important precondition for economic growth…that is why we have committed to a single major fiscal event each year…limiting major policy changes to the Budget and giving businesses and households the certainty they need."
SWAPS: EUR 2-Year Zero Coupon Above 2.00% For First Time In Over 12 Months
EUR 2-Year zero coupon swaps have registered the highest level seen since ’24, with the surge in energy prices on the back of the escalation of the conflict in the Middle East driving much of the move.
- Note that Eurozone HICP data was firmer-than-expected but is very much a second order factor at best.
- The pullback from session highs in crude oil benchmarks and TTF gas futures have prevented a challenge of 2.10%, which protects the July (2.110%) & June (2.130) ’24 highs.
- The measure remains relatively well tethered to the ECB’s 2.00% inflation target at this stage, after operating below that level for over one year.
- This probably helps explain the pushback against the idea of any swift ECB action from several Governing Council members, with the bar to a move in either direction remaining relatively high at this stage.
Fig. 1: EUR 2-Year Zero Coupon Swap (%)
Source: MNI - Market News/Bloomberg Finance L.P.
