OIL PRODUCTS: Fujairah Oil Product Stocks to 13-week High

• The Dollar is still fairly mixed against all G10, but the Greenback is seeing some push lower versus the EUR, JPY, ZAR, SGD, CZK, PLN, GBP, and JPY.
• The Scandies are now the small best performers, the NOK is up 0.28% and the SEK 0.25%, but Currencies are still well within last Week's ranges.
• Main focus for the Stokkie will be the Riksbank rate decision Tomorrow.
• The calls are on a knife edge, of the Estimates provided to Bloomberg, 11 are going for a 25bp cut, and 13 are going for Unchanged.

Modest EGB/Bund spread widening seen alongside a downtick in European equity index futures, although both moves are fairly contained, with Stoxx 50 futures already recovering from session lows.

• EGB/Bund spreads little changed to ~1bp wider, OATs the marginal underperformer after the once-notch sovereign rating downgrade of France from Morningstar DBRS underscored the fiscal & ratings headwinds for OATs. OAT/Bund spread consolidates above 80bp.
• BTPs don’t see much of a lasting tailwind after Italy received the (at least partially expected) one-notch rating upgrade from Fitch, with the rating agency noting “increased confidence in Italy's fiscal trajectory, underpinned by a growing record of fiscal prudence and strong commitment to meeting short- and medium-term fiscal targets under the new EU fiscal framework”. BTP/Bunds trades ~0.5bp wider on the day.
• Weekend comments from Italian Economy Minister Giorgetti were relatively upbeat, as he outlined the potential for the deficit/GDP ratio to print below 3% come the end of the current fiscal year.
• Commerzbank suggest that “the pressure on OATs and simultaneous support for BTPs looks set to continue with the rating changes. While the budget consolidation process in France looks set to become particularly difficult after latest remarks from Bardella ("If Lecornu continues Macron policies, he'll fail"), Budget/supply headwinds thus look set to continue to take their toll on OATs, while it is noteworthy that the 10-Year z-spreads have not yet fully converged. We stick with our view of full BTP/OAT convergence, also in tenors beyond 10-Year”.

Bloomberg Bonds projection:

• US Tsys: +0.06yr (small).
• EU Govies: +0.08yr (average).
• UK Govies: 0.00yr (non event).