INDIA: Steel Minister-Gov't Considering Temporary Levy On Chinese Steel
Speaking to Reuters, Steel Minister HD Kumaraswamy says that India is considering the imposition of temporary 15-25% tariffs (a 'safeguard duty') on the import of Chinese steel in the next six months to address what he calls "a serious challenge to Indian manufacturers,". According to the minister, the gov't began an investigation into the prospect of tariffs being imposed in Dec 2024, with the prospect of the duties remaining in place for up to two years.
- Reuters: "India became a net importer of finished steel in the fiscal year ending March 2024, and shipments from China reached a record high between April and December."
- The discussion of tariffs will undoubtedly be viewed in the context of US President Donald Trump's announcement of increased steel and aluminium levies. As an ICRA report outlines two major steel exporters to the US, Japan and South Korea, could be forced to look elsewhere for sales. Given the duty-free access both countries have with India as part of existing FTAs, the report notes "This can exert pressure on domestic steel prices, pulling down the industry’s earnings further in FY2026."
- With Prime Minister Narendra Modi set to meet with Trump at the White House on 13 Feb, there is the prospect of announcements on Indian purchases of US LNG and defence equipment to avoid any targeted punitive action against Indian exports. India being seen to take action on China Will likely be further welcomed by the Trump administration.
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EU-BOND SYNDICATION: New 3-year / 3.375% Oct-54 tap: Mandate
"The EU has mandated Barclays, BNP Paribas, J.P. Morgan, LBBW and NatWest Markets as Joint Lead Managers for its upcoming EUR Fixed Rate RegS Bearer dual tranche transaction comprising a new long 3-year benchmark line due 4th July 2028 and an increase of EU 3.375% benchmark due 5th October 2054 (EU000A3K4EY2). No further group. The transaction will be launched tomorrow, subject to market conditions. "
MNI comments
- The new 3-year maturing 4 July 2028 was one of the three issues highlighted as likely to launch in H1. We pencil in a tranche size of E5-7bln (we have not seen an EU-bond tranche larger than that since March 2022 - but there is a possibility we go a bit higher with the large H1 EU funding plan).
- The 3.375% Oct-54 tap we pencil in between E4-6bln (possibly partly depending upon the size of the new 3-year).
- We look for a combined E9-13bln total transaction size.
US: SOFR FIX - 13/01/25
SOFR - Bloomberg.
- 1mth 4.30624 0.0037
- 3mth 4.30198 0.01497
- 6mth 4.27941 0.03483
- 12mth 4.24478 0.06645
EUROSTOXX50 TECHS: (H5) Retracement Mode
- RES 4: 5097.00 High Oct 14
- RES 3: 5080.00 High Oct 15
- RES 2: 5068.13 0.764 proj of the Nov 21 - Dec 9 - 20 price swing
- RES 1: 5054.00 High Jul 8
- PRICE: 4950.00 @ 10:47 GMT Jan 13
- SUP 1: 4935.71 50-day EMA
- SUP 2: 4829.00 Low Dec 20 and key short-term support
- SUP 3: 4800.87 76.4% retracement of the Nov 21 - Dec 9 bull cycle
- SUP 4: 4775.00 Low Nov 29
A bull cycle in the Eurostoxx 50 futures contract remains intact and for now, the latest pullback appears corrective. Initial support to watch is 4935.71, the 50-day EMA. A clear break of this EMA would undermine a bullish theme and signal scope for a deeper retracement. For bulls, resistance at 5040.00, Dec 9 high, has recently been pierced. A clear break of it would resume the bull cycle that started on Nov 21 and open 5068.13, a Fibonacci projection.
