CZECHIA: Pavel Warns Allegations Against Turek Could Sink His Ministerial Bid
Oct-15 07:31
- President Petr Pavel weighed in on allegations surrounding Filip Turek of the Motorists, the leading candidate for the Minister of Foreign Affairs in a potential coalition government led by ANO. A few days back, Czech reporters circulated screen shots showing racist and misogynistic allegedly published by Turek on his social media, which were subsequently deleted. Pavel said that if the allegations prove to be true, this would disqualify Turek from any ministerial position. The President's ability to reject ministerial nominations is a legal grey area but the dominant interpretation seems to be that they should always appoint a candidate proposed by the Prime Minister unless there are objective legal obstacles to doing so.
- Meanwhile, ANO resumes its negotiations with the SPD and Motorists this morning, focusing on the policy agenda of their potential coalition government. ANO leader Andrej Babiš said yesterday that programmatic negotiations will take some time, possibly as much as 'a month or month and a half'. His deputy Karel Havlíček said that the Motorists have this time to convince the public that Turek could be a candidate for chief diplomat but also signalled that there was no other option for ANO than a coalition with the SPD and motorists.
- Senate Speaker Miloš Vystrčil has been trying to rally support behind his push to block SPD's Tomio Okamura from becoming the next Chamber of Deputies Speaker. However, Seznam Zprávy reported that there has been little appetite within the Spolu alliance for even a minimal agreement with ANO that would be necessary to make it possible.
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EQUITIES: Option expiries in Notional term
Sep-15 07:30
Looking ahead at Triple Witching Friday, Option expiries in Notional terms:
US:
- SPX: $2.73T.
- NDX: $107.39bn.
- Amazon: $17.57bn.
- Apple: $20.65bn.
EU:
- SX5E: €198.35bn.
- SX7E: €18.69bn.
- DAX: €40.20bn.
- FTSE: £21.25bn.
- Lloyds: £5.38bn.
EQUITIES: ROLL PACE - Triple Witching Friday
Sep-15 07:20
EQUITY ROLL PACE: Some might favour rolling earlier, ahead of the FOMC.
US:
- ESA: 26%.
- NQA: 13% (below pace).
- DOW: 20% (below pace).
EU:
- VGA: 10% (below pace).
- Banks: 7% (below pace).
- Stoxx600: 9% (below pace).
- Dax: 10% (below pace).
- FTSE: 13% (below pace).
EGBS: OATs Lag Iberians As Ratings Convergence Continues
Sep-15 07:16
Friday’s rating actions help drive moves in EGB spreads early today, with Spanish (S&P upgraded Spain to A+; Outlook Stable) & Portuguese (Fitch upgraded Portugal to A; Outlook Stable) 10s flat vs. Bunds, while French paper is ~1.5bp wider (Fitch downgraded France to A+; Outlook Stable).
- Friday’s moves underscored the idea of rating convergence between France & the Iberians, given the political and fiscal risk evident in the former.
- The 10-Year Spain/France/Portugal fly is on track for a fresh cycle closing low, trading through -23bp.
- We highlighted the likelihood of the moves for both France and Portugal last week.
- Commerzbank suggests that the fallout for OATS is “likely to be limited, given that OATs are already trading markedly cheaper than double-A or single-A rated peers. While some investors may start to reduce single-A OAT exposure, others may use average ratings, adjust the rating thresholds in their EGB benchmarks, or utilise more attractive spread levels. We close our tactical OAT-Bund spread tightening view and turn neutral for the time being”.
Fig. 1: 10-Year Spain/France/Portugal Butterfly (bp)
