Rates Spark: German Fiscal Plans Likely To Pass The First Hurdle

2025-03-18 05:55:00 ET

Summary

• US markets took some relief from the fact that the US consumer remains resilient in light of the increasingly uncertain outlook. The front end of the curve was seeing the largest impact, with the trough of the SOFR strip moving towards 3.6% and thus also lifting the implicit floor for long-end rates.
• The week began with a notable bull-flattening of EUR curves as Germany's fiscal package heads towards its first vote.
• As the numbers should be there to pass the package, we suspect it was the market taking a more sober look at the wider EU fiscal plans while also refocussing on more immediate risks, i.e., rising trade tensions.

By Benjamin Schroeder

Markets refocus on the more immediate risks as Germany's debt plans see their first vote

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