POLITICAL RISK: US Allies Hold Fire On Trump Re: Gaza Amid Tariff, NATO Concerns

Feb-05 13:02

Several US allies have distanced themselves from President Donald Trump's comments regarding the future of the Gaza Strip without directly criticising the president. US allies in Europe and elsewhere are facing the prospect of US tariffs on their exports and potential reductions in the US' NATO presence. As such, while advocating respect for international law and Palestinian rights, no US-aligned gov't so far has directly called out Trump for seemingly turning away from the US' long-standing support of a two-state solution. 

  • UK PM Sir Keir Starmer, the French Foreign Ministry, German Foreign Minister Annalena Baerbock, and Australian PM Anthony Albanese, have all commented on Trump's plan for the US to 'take control' of Gaza. However, these comments have largely focused on encouraging respect for international law, protecting the rights of Palestinians, and avoiding pressure on Western allies in the region such as Egypt and Jordan. Western leaders have refrained from any direct criticism of the US president for outlining his plan in the first place.
  • These cautious responses would seemingly confirm that the threat of US tariffs on exports, the prospect of a major reduction in the US' NATO presence (putting the onus on other members to massively increase defence spending), or both will limit the direct political pushback Trump will receive from allies, at least at the start of his second term. 

Historical bullets

MNI: GERMANY DEC CPI +2.6% Y/Y

Jan-06 13:02
  • MNI: GERMANY DEC CPI +2.6% Y/Y

MNI: GERMANY DEC FLASH HICP 0.7% M/M (0.5% FCST)

Jan-06 13:01
  • MNI: GERMANY DEC FLASH HICP 0.7% M/M (0.5% FCST)
  • GERMANY DEC FLASH HICP 2.9% Y/Y (2.6% FCST)

EGB FUNDING UPDATE: Netherlands 2025 Borrowing Requirement Update

Jan-06 12:41

DSTA notes the borrowing requirement for 2025 is now estimated at 106.4 billion (€1.4 billion higher than the previous estimate). The higher overall borrowing will be funded in full by an increase in money market issuance.

  • "The call on the capital market remains unaltered at € 40 billion."
  • The borrowing "estimate is surrounded by uncertainty due to several factors in the government finances. Historically, this has led to a lower funding realization at the end of the year compared with the announcement in the beginning of the year."