AUSTRIA: SPÖ Divisions Over Fin Min Highlight Difficulties In Gov't Formation

Feb-26 15:53

Austria appears no closer to the finalisation of a governing coalition as confusion reigns over who the centre-left Social Democrats (SPÖ) will nominate as finance minister. Earlier today, Die Presse reported that Vienna's finance councillor Peter Hanke would gain the SPÖ's backing to take on the finance ministry. However, Kurier then claimed that party leader Andreas Babler is backing National Council member Michaela Schmidt instead. Local media has put the confustion down to divisions within the SPÖ between the powerful Vienna branch and the federal party. 

  • Kurier reports "there was a verbal altercation between [Mayor and Governor of Vienna Michael] Ludwig and Babler during the meeting on Tuesday evening in the [SPÖ's] parliamentary club, during which comrades repeated Babler's statement that "I certainly won't let the list of ministers be dictated to me"." Hanke, seen as a moderate who could work with the conservative Austrian People's Party (ÖVP) and liberal NEOS, is now reported to have said he will not seek the finance minister's office. Instead, he could serve as infrastructure minister.
  • The party executive and presidium are expected to decide on the identities of the individuals it will put forward as ministers by 28 Feb at the latest, setting the timer running on reaching an agreement.
  • The disagreement does not bode well for the prospects of a long-lasting tripartite federal coalition. If supposedly united parties are unable to agree on cabinet appointments, the likelihood of them agreeing on policies with parties on different wings of the political spectrum may be slim. 

Historical bullets

OPTIONS: Expiries for Jan28 NY cut 1000ET (Source DTCC)

Jan-27 15:38
  • EUR/USD: $1.0400(E1.0bln), $1.0460($697mln), $1.0500(E1.4bln), $1.0520-30(E929mln), $1.0550(E792mln)
  • AUD/USD: $0.6300-10(A$2.0bln)

US TSYS: Post-New Home Sales React

Jan-27 15:24
  • Treasury futures holding near recent session lows, little reaction to better than expected new home sales for December. Still bid, futures have scaled back overnight risk-off support on weaker stocks tied to China's DeepSeek AI startup.
  • Treasury Mar'25 10Y futures currently +16 at 108-31 vs. 109-12 high - just below initial technical resistance of 109-12.5 (50-day EMA).
  • Cross asset comparison, stocks are weaker but well off lows (SPX Eminis -103.0 at 6029.50), Gold weaker (-27.33 at 2743.23), US$ index off lows (BBDXY +.21 at 1295.37), volatility index gaining (VIX +3.61 at 18.46).
  • Focus remains on Wednesday's FOMC policy annc, as well as heavy corporate earning's docket this week. 

JPY: FX Exchange Option

Jan-27 15:22

FX Exchange traded option, looking for further Yen Strength.

  • JPYUSD (7th Mar) 67.5c, bought for 0.23 in 1.3k.

The underlying is at 65.175, spot is slightly lower at 0.006481.