NATO: Rutte Praises Trump Role In Pushing Up Euro Defence Spending
On a joint panel: https://www.weforum.org/meetings/world-economic-forum-annual-meeting-2026/sessi on...
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US TSY FUTURES: TY Sold
A ~2.5K sale of TYH6 futures at 112-12+/12 (DV01 ~$168K) pushes the contact back towards session lows, with the recovery rally in Bunds also stalling in recent trade.
ITALY DATA: Energy Base Effects See First Negative PPI Y/Y Of The Year
Italy domestic PPI saw a strong monthly increase in November, mostly driven by energy, although it didn't match an even stronger increase in Nov 2024 so the year-on-year rate fell into negative territory for the first time in a year due energy base effects.
- Domestic PPI grew 1.3% M/M (vs -0.4% Oct), the largest monthly rise since June. This more than unwound October's drop although was softer than the 1.8% M/M in Nov 2024.
- Istat notes that, excluding energy, prices recorded more moderate growth (0.3% M/M, though this includes foreign markets).
- The Y/Y rate fell into negative territory (-0.3% Y/Y, vs 0.2% Oct) for the first time since November 2024, a somewhat volatile rate but one that has been on a downward trend through most of 2025.
- Again, this was energy-driven, Istat writes "Even the slight year-on-year decline is largely due to the dynamics of energy prices, the decline in which is amplified by the [base effect from] November 2024, when more significant price increases in this sector were recorded."
- "On the domestic market, the year-on-year decline in electricity and gas supply prices extended (-3.8%, from -1.0% in October)."
- In domestic manufacturing sectors, the largest Y/Y increases were seen in "repair and installation of machinery and equipment" (3.1%), "pharmaceutical products and preparations" (2.8%), and "manufacture of metal products, excl machinery" (2.5%).
- Istat also notes strong yearly price increases on the foreign market for transport equipment (6.4%).
SOFR: Futures Flat To A Little Lower, Several Rounds Of Flow In London Trade
SOFR futures are flat to -1.5, with pressure from core global FI markets (albeit with Bunds bouncing off the lows before 10-Year yields could test year-to-date highs) and typically hawkish Fedspeak from Hammack noted over the weekend.
- Several rounds of flow worth highlighting in early London trade:
- SFRZ6 ~6.5K given at 96.900.
- SFRH7/H9 ~3.3K given at 40.5.
- SFRH6 96.56/96.43/96.37/96.18 broken put condor 4K given at 5, desks point to closing out of an existing position.
