EM CEEMEA CREDIT: Fin Dept Govt of Sharjah: CNY 2bn 3Y Panda Bond

• Incursion of Russian drones into Polish airspace have dominated headline flow and market sentiment so far Wednesday. Poland's government have triggered NATO's Article 4 in response - meaning NATO consultations are set to get underway to assess the risks and threats after Poland shot down several drones.
• Given this morning's incursion represents the most serious breach of air defences since the beginning of the Ukraine war, risk sentiment dipped through the European open - albeit only briefly. EUR/USD edged through the overnight lows of 1.1690 as the USD rallied - although haven currencies (JPY, CHF) saw only minimal gains. With Article 4 triggered - the path for de-escalation is relatively clear - allowing markets to correct back to neutral levels.
• That said, oil-tied FX are on the front-foot as WTI and Brent crude futures correct higher on geopolitical risk. This is compounding strength in the NOK on the back of the higher-than-expected underlying Norwegian CPI print (3.1% Y/Y vs. Exp. 2.9%). As a result, EUR/NOK trades heavy and clear of the September lows. The cross has shown through 61.8% retracement for the upleg posted off the June low, opening next support into 11.5416.
• PPI data marks the first inflation salvo this week, with markets expecting PPI to slow on a monthly basis, but hold first on a Y/Y, final demand basis. The PPI release may take on greater importance than usual given it comes ahead of tomorrow's CPI - both of which feed directly in to the Fed's PCE inflation gauge and could prove decisive for the September FOMC meeting and the scale of any potential easing. Both the Fed and ECB remain inside their media blackout periods, meaning we're unlikely to get much policy-relevant commentary following the PPI print. 

Fresh sources of geopolitical tension that have become evident over the last 24 hours are perhaps the best explainer for the pullback from highs in U.S. & European equity index futures.

• The S&P 500 e-mini registered a fresh all-time high before trimming games. Note that tech name Oracle is indicated ~30% higher pre-market on the back of the company’s updated outlook, centred on cloud business growth.
• Meanwhile, European pharma name Novo Nordisk slashed its profit forecasts and revealed meaningful job cuts, owing to competition-related pressure when it comes to weigh loss drugs. The name trades ~2.5% higher on the day.
• S&P 500 e-minis are +0.14%, Euro Stoxx 50 futures are -0.04%.

DUZ5 8,113 lots blocked at 107.150, looks like a buyer. DV01 ~EUR170K.