GERMANY: US Auto Tariffs Put 0.18% Hit On German Growth, Kiel Institute Says
Auto tariffs of 25% announced by the US administration yesterday would hit German 2025 GDP by 0.18%, newspaper FAZ reports, quoting the Kiel Institute for the World Economy (IfW). "Overall, the export losses are limited, as cars are often produced close to their sales market." The analysis assumes no retaliation.
- EC President von der Leyen commented yesterday that the EU "will continue to seek negotiated solutions" on the US tariff matter - around one week would remain until the tariffs start to be implemented. However, French finance minster Lombard said that the "only possible answer to US tariffs is to raise our own tariffs" - highlighting the direction in which the debate will develop is still open.
- For comparison, MNI's collation of sellside analysts currently sees a median estimate for German GDP growth in 2025 of 0.2% - but at least some of the underlying forecasts might be already assuming a negative impact through US tariffs. The median was unrevised during the last month, and downwardly revised by 0.1pp during the two months prior.
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GILT AUCTION RESULTS: 1.125% Sep-35 linker
| Sep-35 linker | Previous | |
| Amount | GBP1.60bln | GBP1.50bln |
| Avg yield | 1.115% | 1.128% |
| Bid-to-cover | 3.52x | 3.12x |
| Avg price | 100.100 | 99.971 |
| Pre-auction mid | 100.045 | |
| Previous date | 28-Jan-25 |
ITALY AUCTION RESULTS: BTP Short Term and BTPei
| 2.55% Feb-27 BTP Short Term | 1.80% May-36 BTPei | |
| ISIN | IT0005633794 | IT0005588881 |
| Amount | E2.75bln | E1.5bln |
| Previous | E3bln | E1.25bln |
| Avg yield | 2.38% | 1.90% |
| Previous | 2.61% | 1.90% |
| Bid-to-cover | 1.59x | 1.61x |
| Previous | 1.63x | 1.72x |
| Avg Price | 100.36 | 99.08 |
| Pre-auction mid | 100.335 | 99.005 |
| Prev avg price | 99.91 | 99.06 |
| Prev mid-price | 98.966 | |
| Previous date | 28-Jan-25 | 28-Jan-25 |
ECB: Kazaks Backs More Rate Cuts, But Trump Dependent
First comments on monetary policy from Kazaks since he was officially re-appointed as the Latvian CB Governor (all bbg):
- "*ECB'S KAZAKS: I THINK WE HAVE TO CONTINUE CUTTING RATES"
- "*ECB'S KAZAKS: WE'LL TAKE RATE CUTS STEP BY STEP"
- "*ECB'S KAZAKS: RATE PATH TO HINGE ON TRUMP POLICIES"
On 11 Feb, Kazaks spoke on the threat of US tariffs to LTV:
“Tariffs are used not only for economy, but also for political reasons,”….“And if there is any response, then we definitely do not need to escalate. The US is our strategic partner, so this cooperation must be maintained.”…"Negotiations always help to find less painful solutions".
