HYBRIDS: Veolia (VIEFP): Redemption VIEFP 2.25% Perp

The National Assembly has begun its final reading of the draft Social Security Bill (PLFSS), ahead of its expected passage later this evening. The far-left La France Insoumise (LFI, 'France Unbowed) tabled a motion to reject the bill outright at the start of the session, but this was in turn rejected. In the previous vote that sent the PLFSS to the Senate, lawmakers voted by a margin of 247 to 234 in favour of the bill. This was reliant on the support of the centre-left Socialist Party (PS), the eventual abstention of a number of Ecologist deputies, and 18 deputies from the conservative Les Republicains and nine from the centre-right Horizons defying their leaders' calls to abstain and instead vote in favour. 

• The Senate passed its own version of the PLFSS, with the provision to suspend the implementation of the 2023 pension reforms until after the next presidential election stripped out. After a joint committee from both chambers failed to agree on a text, the National Assembly's vote today will be on the last version it passed, with the pension suspension included. As such, it is expected to pass, albeit by another narrow margin.
• The sterner test comes in the days ahead, with a joint committee of both chambers (CMP) meeting on 19 December to seek agreement on a draft State Budget (PLF). The National Assembly failed to pass the PLF, meaning the version passed in the Senate on 15 Dec is the one that will be discussed. 

Data quality was in firm focus with today’s nonfarm payrolls report and response rates indeed saw mixed developments across the main establishment and household surveys. They make it hard to put too much weight on any single area of the jobs report although the continued uptrend in the u/e rate is unlikely to have seen the FOMC majority second-guess last week’s third consecutive 25bp cut. The December report, keeping to its original schedule of Jan 9, will be watched particularly closely. 

• The establishment survey (behind the payrolls figures) saw mixed results for the share of responses of actively reporting sample units.
• The first preliminary rate of 73.8% in November was again high compared to recent years even if it dipped from the 80.2% in the September report that had been particularly delayed by the government shutdown. This initial response rate had averaged 62% in the first eight months of 2025.
• On its own that would imply smaller than usual scope for upcoming two-month revisions but the October rate at least somewhat goes against that at 73.9% if comparing with typical second response rates closer to 90%. That said, the BLS clearly describes this as an initial estimate (and being “higher than usual as a result of the extended collection periods” despite including enough detail that would typically only have been available with the second update. We crudely show as a second response rate in the below charts.  
• The third and final response rate of 89.8% (again, of actively responding units) fell from 93.9% for its lowest since Jun 2024. The overall response rate meanwhile drifted lower still from 43.8% to 42.1% for its lowest since Sep 2023 and one of its lowest on record.
• The household survey collection period was extended to “provide more time for contacting households around the Thanksgiving holiday” having begun a day late due to the government shutdown, yet this longer period didn’t prevent a sharp decline in the response rate.
• The household survey response at 64% in November (there was no October survey) fell from 68.9% in September for a new low having surpassed the 64.9% in Jun 2020 on pandemic disruption.  
• Building on information released by the BLS the day before the release, it has higher-than-usual standard errors due to "multiple reasons: lower survey response, composite weighting changes, and the use of a 2-month period of analysis rather than a 1-month period", which meant that the unemployment rate "required a 0.26 percentage point change to be statistically significant compared with a required change in September of 0.21 percentage point". The BLS on Monday said the survey would have larger standard errors, with the national unemployment rate error being larger than usual by a factor of 1.06 due to the weighting methodology change alone.
• Fed Chair Powell had of course warned last week that "we're going to have to look at it carefully and with a somewhat skeptical eye" given technical issues. 

• Stock indexes reversed early gains to currently lower following this morning's data that did little to shift rate guidance expectations after last week's third consecutive 25bp cut.
• Currently, the DJIA trades down 250.63 points (-0.52%) at 48152.68, S&P E-Mini Futures down 39 points (-0.57%) at 6838.75, Nasdaq down 74.5 points (-0.3%) at 22972.1.
• Energy, Health Care and Utilities sector shares led declines in the first half, oil and gas shares weighing on the former with crude prices falling (WTI currently -1.56 to 55.26, oversupply cited):
  • Halliburton -4.88%, APA Corp -4.65%, Diamondback Energy -4.42%, Marathon Petroleum -4.09%, Phillips 66 -3.66% and EQT Corp -3.63%.
  • Pfizer -5.69%, Centene Corp -3.39%, Humana Inc -3.39%, ResMed -3.28% and Biogen -3.15%.
  • AES Corp -2.02%, Edison International -1.46%, Xcel Energy -1.40% and Sempra -1.31%.
• On the positive side, a mix of Consumer Discretionary/Staples and Technology sector shares outperformed in the first half: Comcast Corp +3.90%, Robinhood Markets +3.63%, United Airlines Holdings +3.55%, Estee Lauder +2.94%, Southwest Airlines +2.68%, Qnity Electronics +2.14%, Johnson Controls +2.09% and Zoetis +2.07%.