US: Trump's Deportation Programme Faces Public Opinion Test As It Broadens Scope

Monday's Europe rates/bond options flow included:

• RXN5 133.50c, bought for 14.5 in 4k
• ERM5 97.875/98.00/98.125/98.25 call condor, sold out at 7.25 in 8k (continuing closing out from prior sessions)
• ERU5 98.125/98.1875/98.3125/98.375 condor vs 97.9375/97.8125 put spread, paper sells for 0.25 in 9k (sells the condor)
• ERU5 98.50/98.37/98.25/98.00p condor sold at -1.75 and -2 (receive) in 16.5k
• ERZ5 98.50/98.25ps 1x2 bought the 1 for 1 in 20k
• ERH6 99.12/99.37cs, bought for 1.25 in 10k

• Taylor: Another reason why I felt comfortable with the activism of a 50bp cut [last week]. I think we're a long way from neutral. That view may not be shared, but from my own research, which I did in the past and which is now it's in the public domain. You can download the codes and run them yourselves.
• I think neutral for euro area is close to zero, and neutral for US and UK is close to one. For me, maybe 0.75-1% in the UK [real]. So I see neutral policy rate for us, as I said in the Leeds speech (Jan 15, when he had two of three cases seeing a 0.7% r*), at sort of 2.75-300% for me.
• The market is at the moment expecting a terminal rate which is markedly higher than that.

"The Bundesbank has called on the federal government to overcome the obstacles that are hampering economic growth. Germany must improve its infrastructure, expand its labour supply, digitize and accelerate public services, reduce bureaucracy and strengthen its defence capabilities", Bundesbank President Nagel said in a joint interview with Bank of Spain chief Escrivá with Süddeutsche Zeitung and El Mundo today.

• The demands highlighted by Nagel do resemble the view of the new government, which is scheduled to lay out in further detail their plans to tackle the weak German economic conditions in a declaration on Wednesday. At least parts of the plans have been flagged before following media reports as well as the CDU/CSU/SPD coalition agreement.
• The Bundesbank is mandated to consult the federal government on economic topics next to their primary mandate of ensuring price stability as a part of the Eurosystem.
• "The debt ratio must fall again after an adjustment phase. Germany's obligation to comply with European fiscal rules remains unchanged", Nagel added.