COMMODITIES: Crude Rises Ahead Of OPEC Meeting, Precious Metals Rally

Yields reversed an early rise to finish lower Wednesday, with strong bull flattening evident across EGBs and Gilts.

• Gilt futures pierced Tuesday's lows in early trade, with ongoing fiscal concerns continuing to weigh on the space, but eventualy bounced; meanwhile 10Y Bund yields weakened but held the 2.80% level.
• Having found an early footing, bonds rallied through much of the remainder of the session.
• Weak US job openings data added a final up-leg to global core FI in mid-afternoon, with yields closing near their session lows. Long-end Gilts also benefited from DMO cancelling a 30Y auction in the FQ3 quarter.
• In BOE Treasury Select Committee testimony, some highlights included Lombardelli sounding more hawkish that MNI's Markets Team had assumed, while BoE's Bailey noted that the bank's decision on QT in the next few weeks "is an open decision".
• European data wasn't a market-mover, with composite PMIs in the Eurozone and UK respectively revised slightly lower/higher in the final readings.
• The German and UK curves bull flattened, with Gilts outperforming; periphery/semi-core EGB spreads tightened, with BTPs outperforming.
• Thursday's schedule includes Eurozone retail sales and an appearance by ECB's Cipollone, while Swiss and Swedish inflation will garner some attention.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.8bps at 1.966%, 5-Yr is down 3.3bps at 2.28%, 10-Yr is down 4.6bps at 2.74%, and 30-Yr is down 5bps at 3.356%.
• UK: The 2-Yr yield is down 2.2bps at 3.96%, 5-Yr is down 4.1bps at 4.13%, 10-Yr is down 5.2bps at 4.748%, and 30-Yr is down 9bps at 5.603%.
• Italian BTP spread down 1.7bps at 87.3bps / French OAT down 0.2bps at 79.9bps  

• RES 4: 113-06   2.236 proj of the Jul 15 - 22 - 28 price swing
• RES 3: 113-00   Round number resistance  
• RES 2: 112-28+ 2.000 proj of the Jul 15 - 22 - 28 price swing  
• RES 1: 112-19/20+ High Sep 3 / Aug 28 / 29 
• PRICE:‌‌ 112-18 @ 16:58 BST Sep 3
• SUP 1: 111-31+ 20-day EMA
• SUP 2: 111-19   50-day EMA
• SUP 3: 111-13+ Low Aug 18 and a key support  
• SUP 4: 110-25   Low Aug 1 

The trend outlook in Treasury futures is bullish and the latest pullback appears corrective. Recent gains delivered a print above 112-15+, the Aug 5 high and a bull trigger. A breach of this hurdle confirms a resumption of the current bull cycle and signals scope for an extension towards the 113-00 handle. Moving average studies are in a bull-mode position, reinforcing a bull theme. First support to watch is 111-31+, the 20-day EMA. 

The Elysee confirmed that French President Emmanuel Macron, Ukrainian President Volodymyr Zelenskyy and ‘several other heads of state’ will speak with President Donald Trump at 08:00 ET 13:00 BST tomorrow, after a meeting of the ‘Coalition of the Willing’ in Paris.

• Trump said alongside Polish President Karol Nawrocki in the Oval Office that roughly 10,000 US soldiers will remain deployed in Poland, adding that number could be increased "if they want".
• Zelenskyy confirmed a short time ago that he discussed a US backstop to security guarantees w/EU counterparts in Copenhagen today: “We have signals from the US of a possible backstop [and] the role of EU membership in this holistic system of security guarantees...”
• Trump reiterated to reporters yesterday that there will be “consequences” for Putin slow-walking a meeting with Zelenskyy. He added: “I had actually a very good meeting with [Putin] a couple of weeks ago. We'll see if anything comes out of it. If it doesn't, we'll take a different stance.”
• It is unlikely Putin's recent concessions on a meeting will be seen by the White House as sufficient progress. See SECURITY: Putin Offers To Meet Zelenskyy And Trump In Moscow
• Treasury Secretary Scott Bessent told Fox on Monday that “all options are on the table” for further sanctions on Russia, adding “we’ll be examining those very closely this week.”
• Bessent and White House officials said EU countries need to align with the US on halting Russian oil purchases, but have equivocated on pursuing a similar secondary oil tariff on China to the one imposed on India.
• US Ambassador to NATO, Matthew Whitaker, told Bloomberg yesterday that the US has refrained from imposing secondary sanctions on China because of ongoing trade negotiations.