GREECE: PM To Announce Cabinet Reshuffle At Top Of Hour
Greek Prime Minister Kyriakos Mitsotakis is set to announce a cabinet reshuffle at 1100 local (0500ET/0900GMT/1000CET). The reshuffle is being seen as an attempt to refresh the gov't amid mass protests aimed at the Mitsotakis administration over its handling of the deadly Tempi rail crash in 2023. Kathimerini reports that Finance Minister Kostis Hatzidakis will be made vice president of the government and Education Minister Kyriakos Pierrakakis is the favourite to take his position. Ta Nea reports that Minister of Labour Niki Kerameus and Minister of the Environment Theodoros Skylakakis are in the running.
- The article claims that deputy minister for tax policy Christos Dimas could take over as Minister of Transport and Infrastructure. There is speculation that a deputy ministerial position will be created specifically to address Greece's crumbling rail network.
- While the next election is not due until 2027, the latest polling is indicative of rising public awareness of the issue and anger at the gov'ts perceived slow action following the Tempi disaster. The far-left populist, hard eurosceptic Course of Freedom, which has vocally backed the protesters, has surged to second place in polls, scoring a record-high 16.6% in a 10 March Real Polls/Protagon poll. Mitsotakis' centre-right New Democracy still holds a comfortable lead with support just shy of 30% in most polls. Nevertheless, this represents a sizeable drop from the 40.6% of the vote won in the June 2023 election.
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EGBS: /SWAPS: Commerzbank Reiterate Long End Swap Spread Shorts
Commerzbank believe that “converging duration free-float of Bunds with that of U.S. Treasuries and gilts suggests that global ASW-curves will have to align further. We hence reiterate our structural shorts in (ultra-)long Bund-spreads, also vs. Schatz, and in 30y OATs vs. swaps.”
GILTS: Softer Start As Global Supply & Equity Bid Weighs
Supply-related pressure and a bid in European equities weighs on core global FI markets, biasing gilts lower at the open.
- Futures pierce yesterday’s base, printing as low as 92.83.
- First support at the 20-day EMA (91.63), with the short-term bullish cycle still intact but losing some momentum.
- Yields 1-2bp higher across the curve.
- 10-Year spread to Bunds 1bp tighter at ~207bp, sticking within the multi-week 203.8-213.3bp closing range.
- Local media outlets dominated by the latest fiscal warnings, with the NIESR noting that the UK’s fiscal headroom will have been fully eroded when the new OBR forecasts are released next month. This increases the risk of further tax hikes and spending cuts, although isn’t a new line of thought.
- Hawkish drift in GBP STIRs as gilts soften. BoE-dated OIS showing 58bp of cuts through December vs. ~60bp early today. SONIA futures flat to -2.5.
- Looking forwards, comments from BoE MPC member Greene are due later today (15:00 GMT).
- On the supply front the DMO will come to market with GBP1bln of 0.625% Mar-45 I/L supply.
STIR: Euribor Futures Extend Session Lows Alongside Bunds
Euribor futures are once again being dragged lower by core EGBs, amid another day of solid sovereign supply and buoyant European equities.
- Futures are are -1.5 to -3.0 ticks through the blues at typing, extending session lows. ERZ5 has closed last Monday’s tariff-induced gap higher, currently at 98.015.
- ECB-dated OIS price 80.5bps of easing through year-end, down from 83bps at yesterday’s close.
- A 25bp cut remains essentially fully priced through March (24bps of cuts priced), while OIS price a ~70% implied probability of 25bp cuts at each of the April and June decisions.
- Today’s regional data calendar is light, with only Italian IP due. ECB Executive Board member Elderson speaks at an MNI Webcast at 1000GMT on “Climate Change: Impact on Monetary Policy & Bank Supervision”.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.428 | -23.7 |
| Apr-25 | 2.252 | -41.2 |
| Jun-25 | 2.083 | -58.1 |
| Jul-25 | 2.012 | -65.2 |
| Sep-25 | 1.923 | -74.1 |
| Oct-25 | 1.902 | -76.2 |
| Dec-25 | 1.861 | -80.4 |
| Feb-26 | 1.859 | -80.5 |
| Source: MNI/Bloomberg. | ||
