FED: US TSY TO SELL $77.000 BLN 26W BILL DEC 29, SETTLE JAN 02

• EUR/USD: Nov26 $1.1480-00(E2.4bln), $1.1525(E1.0bln), $1.1595-00(E1.7bln); Nov27 $1.1575(E1.3bln)
• USD/JPY: Nov26 Y153.00($1.2bln), Y154.00($2.1bln), Y155.00($1.9bln); Nov28 Y154.00($1.3bln)
• AUD/USD: Nov26 $0.6535(A$1.7bln)
• NZD/USD: Nov26 $0.5670-75(N$1.2bln)
• USD/CAD: Nov26 C$1.3990-00($1.1bln)
• USD/CNY: Nov26 Cny7.00($1.2bln)

The agreement of a federal budget for 2026 within the five-party 'Arizona' coalition gov't significantly reduces political risks in Belgium, at least in the short-to-medium term. Negotiations had dragged on for months between the governing parties, with the Dutch-speaking centre-left Vooruit and French-speaking centre-right Reform Movement (MR) in particular deeply entrenched in their positions. PM Bart De Wever from the Flemish nationalist New Flemish Alliance (N-VA) had threatened to resign if no agreement was forthcoming by year's end. For details on market reaction, see BELGIUM AUCTION PREVIEW: OLOs Outperform After Belgian Government Strikes Budget Deal

• The timing of the announcement will be of particular relief for the gov't, as it pushes three days of strike action taking place 24-26 November off the front pages. For three of the governing parties in particular, Vooruit, the Dutch-speaking centrist Christian Democratic and Flemish (CD&V) and Francophone social liberal Les Engages (LE), the budget agreement could not have been better placed given the pressure that such mass industrial action can put on their lawmakers.
• Dutch-speaking outlet Nieuwsblad reports that the unions have rejected the agreement, with the largest trade union federation, the Confederation of Christian Trade Unions, saying, "This agreement doesn't address our concerns. On the contrary: it gives us more reason to strike."
• While the coalition remains an uneasy alliance, including social democrats, fiscal conservatives, and Flemish nationalists, the budget deal should ensure the gov'ts survival into 2026 at least, avoiding snap elections or a lengthy gov't formation process. 

Italy has announced it will be looking to sell the following at its auction this Thursday, November 27:

• E2.25-2.75bln of the 2.85% Feb-31 BTP (ISIN: IT0005671273)
• E2.25-2.75bln of the 3.45% Feb-36 BTP (ISIN: IT0005676504)
• E3.5-4.0bln of the new 0.80% Apr-35 CCTeu (ISIN tba)