NETHERLANDS: PM Reaches Compromise In Warring Gov't: Abstention On ReArm Europe

Mar-14 15:43

Amid an intra-coalition disagreement over European Commission plans to utilise E150bln in loans for joint procurement of European-made military equipment, PM Dick Schoof has come up with the compromise that until the full details of the ReArm Europe plan are finalised, the Dutch gov't will abstain on any European Council vote related to the programme of loans. 

  • Three of the four governing parties voted in favour of an opposition motion rejecting the scheme (see 'NETHERLANDS: PM Convenes Emergency Gov't Meeting Amid Splits Over ReArm Europe' 1408GMT, 13 March), with proposer Joost Eerdmans arguing there is a "real risk" that wealthier EU nations will end up paying for "weak countries like France, Italy, Spain, and Portugal,".
  • AD reports "According to Schoof, the cabinet will 'partly implement, partly not' that motion. In Brussels, he will argue that the Dutch share in EU loans[...] should only be 'temporary and targeted', with 'guarantees for debt sustainability and financial stability'."
  • There is no single vote set for ReArm Europe at present. European Defence Commissioner Andrius Kubilius and High Representative for Foreign Affairs Kaja Kallas will present a white paper intended to give more detail to the plan to EU leaders on ReArm Europe ahead of the 20-21 March EUCO summit.
  • A Dutch abstention would not derail any vote on its own. Under Article 235 of the Treaty on the Functioning of the European Union, "Abstentions by members present in person or represented shall not prevent the adoption by the European Council of acts which require unanimity."

Historical bullets

US TSY FUTURES: March'25/June'25 Treasury Futures Roll Update

Feb-12 15:43

Details of the latest Tsy quarterly futures from March'25 to June'25 below, FVH5/FVM5 continues to lead volumes while overall percentage complete remains low, appr 2%-3% across the curve ahead the "First Notice" date on February 28. Current roll details:

  • TUH5/TUM5 appr 19,400 from -5.62 to -4.62, -4.75 last
  • FVH5/FVM5 appr 136,600 from -2.5 to -1.0, -1.0 last
  • TYH5/TYM5 appr 33,200 from 0.25 to +1.0, +1.0 last
  • UXYH5/UXYM5 appr 1,300 from 4.5 to 4.75, 4.75 last
  • USH5/USM5 appr 4,200 from 5.5 to 6.75, 6.75 last
  • WNH5/WNM5 less than 100 from 4.0 to 4.25, 4.0 last
  • Reminder, March futures won't expire until next month: 10s, 30s and Ultras on March 20, 2s and 5s on March 31. March Tsy options expire February 21.

GILT AUCTION PREVIEW: On offer next week

Feb-12 15:33

The DMO has announced it will be looking to sell GBP4.25bln of the 4.375% Mar-28 Gilt (ISIN: GB00BSQNRC93) at its auction next Wednesday, February 19.

USD: Greenback Bid Fades Further As Hassett Points To Discussions On Tariffs

Feb-12 15:32

USD unwinds some more of the CPI-driven bid as comments from Trump economic advisor Hassett signal the potential for offramps surrounding reciprocal tariffs (examples of potential outcomes include exemptions for some countries, delays in implementation or at least negotiations surrounding the matter).

  • For completeness, Hassett noted that “reciprocal tariffs are a work in progress, with conversations with other countries starting earlier today.