Little Net Movement In Dutch Spreads Since Government Formation Announcement

There has been little net movement in 10-Year DSL spreads vs. Bunds, OATs & OLOs in the time since Geert Wilders announced an agreement surrounding the formation of a Dutch government.

• Structural spending looks set to fall, albeit not as far as some economic experts recommended.
• Elsewhere, Rabobank note that the lack of mention of the pension reform topic in the broad outline of the government accord is “notable in its absence, indicating that the coalition plans to make no alterations to the current transition process. Technically the government could still introduce some change, but our pension analyst thinks that this is unlikely.”
• Our political risk team provided more colour on the Dutch political backdrop after news of the agreement crossed.