GERMANY: RTRS-Deutsche Bahn To Use Chinese Tech Despite Gov't Security Concerns

Mar-10 11:27

Reuters is reporting that the German state railway company Deutsche Bahn is set to allow the use of tech from Chinese tech giant Huawei in its massive digitalisation programme, despite critics raising security concerns about using Chinese tech in critical infrastructure. The contract, made in Dec 2022, received little reporting at the time but could be seen to go against Chancellor Olaf Scholz's "Zeitenwende" or "end of an era" announced in 2022 following the Russian invasion of Ukraine that sought to emphasise security in critical areas over cheaper supply chains with potentially unreliable partners.

  • The timing of the story is inopportune for the German gov't and the EU, as Commission President Ursula von der Leyen meets with US President Joe Biden in Washington, D.C., (see 1105GMT bullet). The White House is continuing to press the EU and its member states to reduce its economic reliance on China.
  • Reuters: ""If it's true that the company is betting more on Huawei technology, then that raises some serious questions," said Konstantin von Notz, chairman of the parliamentary committee that oversees the intelligence services. The lawmaker from the Greens junior coalition partner said it was up to this government "to rectify as quickly as possible years of ignorance and massive shortcomings in security policy".

Historical bullets

STIR FUTURES: Little Change Post Powell, Three ‘New’ Speakers Ahead

Feb-08 11:23
  • Fed Funds implied hikes little changed from levels before and ultimately after Powell yesterday.
  • 25.5bp for Mar (-0.5bp on the day), cumulative 45bp for May (-0.5bp), 55bps to terminal 5.14% Jul (-1.5bp) and 33bp of cuts to 4.80% Dec (-2.5bp).
  • Fedspeak: Six speakers lined up with first post-FOMC/payrolls appearances from voters Williams, Cook and Waller (latter with text).

OUTLOOK: Price Signal Summary - Bund Futures Clear Support

Feb-08 11:22
  • In the FI space, Bund futures traded lower Tuesday and remain at their recent lows. The contract has breached support at 136.38, the Jan 30 low and this strengthens the current bearish cycle. The focus is on 135.08 next, the Jan 4 low. Moving average studies are in a bear-mode position, reinforcing current conditions. On the upside, resistance to watch is at 137.83, the 50-day EMA.
  • Gilt futures traded lower yesterday to extend the current bear leg. Initial firm support to watch lies at 104.04, the Jan 30 low. The latest pullback is considered corrective, however, a break of 104.04 would highlight a short-term top and expose 103.86 initially, the 50-day EMA and a key support. A resumption of gains would refocus attention on the bull trigger that has been defined at 107.78, the Feb 2 high.

LOOK AHEAD: Wednesday Data Calendar: More Fed Speakers, 10Y Note Auction

Feb-08 11:15
  • US Data/Speaker Calendar (prior, estimate)
  • Feb-8 0700 MBA Mortgage Applications
  • Feb-8 0915 NY Fed Williams WSJ Live event
  • Feb-8 0930 Fed Gov Cook moderated discussion
  • Feb-8 1000 Fed VC Barr, Atl Fed Bostic, moderated disc
  • Feb-8 1000 Wholesale Trade Sales MoM (-0.6%, -0.2%)
  • Feb-8 1000 Wholesale Inventories MoM (0.1%, 0.1%)
  • Feb-8 1130 US Tsy $36B 17W Bill auction
  • Feb-8 1230 MN Fed Kashkari Boston Economic Club event
  • Feb-8 1300 US Tsy $36B 10Y Note auction (91282CGM7)
  • Feb-8 1345 Fed Gov Waller, economic outlook