EU: Trade Commissioner Talks FTAs On ASEAN Visit
European Trade Commissioner Maros Sefcovic has sought to talk up the prospect of agreeing trade deals with a number of Southeast Asian nations as he attends a meeting of economic ministers from the Association of Southeast Asian Nations (ASEAN). Off the back of signing a trade deal with Indonesia on 23 Sep, Sefcovic held talks with Malaysian PM Anwar Ibrahim as the two sides resumed trade talks after a 13-year break due to Kuala Lumpur's objection to the EU's treatment of palm oil in particular.
- After a meeting with Philippine Secretary of Trade and Industry Cristina Aldeguer-Roque, Sefcovic said the two sides "reaffirmed our shared determination to conclude an EU-Philippines trade agreement", adding that teams from the EU and the Philippines would meet again in October.
- As Bloomberg News notes, "The EU only comprises 10% of Asean trade, even though it’s the second-largest foreign investor in the region".
- Sefcovic has also confirmed that he will hold discussions with US Trade Representative Jamieson Greer on the sidelines of the ASEAN meeting, with the hope that talks can resume on lowering steel and aluminium tariffs on EU exports.
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GERMAN DATA: IFO Export Expectations Deteriorate Following US-EU Trade Deal
German IFO export expectations deteriorated in August, falling to -3.6 points from -0.3 points in July. “Disillusionment is spreading in export business [...] Although a tariff rate of 15 percent from the US is less than feared, it will nevertheless weaken export momentum”, IFO adds.
- August's drop following that US-EU trade deal was a little less than half the size of that following the initial April 2 US tariff announcements.
- "Food and beverage manufacturers took a major hit, with the export outlook becoming noticeably gloomier. Companies in metal production and processing also expect a decline in international sales. There is little movement in mechanical engineering. The same applies to data processing equipment manufacturers."
- "In the chemical industry, there is cautious optimism, with companies expecting exports to increase. That also applies to the furniture industry and manufacturers of electrical equipment."
- Recall that in Q2 GDP data, German exports held up reasonably well at -0.1% Q/Q following the strong +2.5% Q1 which was underpinned by US tariff front-running. Net exports fared less favourably last quarter, however.
EGB SYNDICATION: Austria New 7-Year RAGB: Spread Set
- E3bln WNG of the new 7-year Sep-32 RAGB
- Spread set at MS+30 (guidance was MS+33 area)
- Books in excess of €16bn including €2.2bn JLM interest
- Format: Reg S, Bearer, 144A eligible, CAC
- Settlement: 02 September 2025 (T+5)
- Maturity: 20 September 2032 (7Y)
- Size: EUR 3 billion (Will not grow, excluding potential issuer retention)
- Coupon: TBD, Fixed, Ann., ACT/ACT (Long 1st to 20 September 2026)
- ISIN: AT0000A3NY15
- Bookrunners: BofA / DB(DM/B&D) / Erste Group / HSBC / JPM / Raiffeisen Bank International
- Timing: Books to close a 11.15CET / 10.15UKT
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FRANCE: Justice Min Raises Prospect Of Early Election If Bayrou Gov't Falls
France looks set for another period of significant political instability after PM Francois Bayrou effectively called a confidence vote in his own gov't on 25 Aug. Bayrou said that he had requested an extraordinary session of the National Assembly to be convened on Monday, 8 September to "confirm the scale" of spending cuts in the upcoming 2026 state budget, adding that "If you have a majority, the government is confirmed. If you do not have a majority, the government falls".
- The Bayrou gov't has been living on borrowed time for a while now. Formed by the centrist Ensemble bloc and the centre-right Les Republicains (LR), the gov't holds only 210 seats in the 577-member legislature. With the leftist New Popular Front alliance and the far-right Rassemblement National both set to vote against Bayrou, the gov'ts dismissal appears more likely than not.
- With more than a year having passed since that vote, President Emmanuel Macron is at liberty to call another set of legislative elections. Speaking to France 2 TV earlier, Justice Minister Gerald Darmanin said, "Dissolution [of the Assembly] is costly for France, of course, but this hypothesis should not be ruled out."
- Jean-Luc Melenchon, leader of the far-left La France Insoumise (LFI), confirmed in an interview with France Inter that his group will move forward with a motion of impeachment against Macron on 23 September. Melenchon claimed Macron must be removed from office as he is the "cause" of the current political paralysis.
- The collapse of the Bayrou gov't could come at the same time as a major effort by the left to pressure the Macron administration, with the 'bloquons tout' ('black everything') efforts to call a general strike, as well as road blockades and corporate boycotts.
