OIL PRODUCTS: India July Diesel and Gasoline Sales Rose Year on Year

ERQ5 98.125/98.25cs 1x2, bought the 1 for 2 in 5k.

• The Bid in the Dollar following the extension higher in US Yields in early trade is lacking momentum but remains near session highs.
• The US Tnotes is so far finding support at the mentioned 111.22 support, this is helping the USDJPY short of the 144.00 handle.
• The EURUSD has so far failed to test 1.1761, this is just Yesterday's low.
• Note that we have some large Option expiries in the EURUSD for the next two sessions, today sees, 4.24bn at 1.1775/1.1800, and Tomorrow a large 7.5bn between 1.1770/1.1800.

The French year-to-date budget deficit widened to E94bln in May, a step up from E69.3bln last month but comfortably below the E113.5bln seen in May 2024 and E107.2bln in May 2023. Although fiscal consolidation appears to be progressing from this perspective, last week the French government said it needs to find an extra E5bln of spending cuts to achieve its 5.4% deficit to GDP target. That's on top of the E40bln in savings required to meet its 4.6% 2026 target, with proposals set to be announced this month before a vote in the autumn. 

• The press release notes that expenditures were E189.6bln in May, down from E197.6bln a year ago. Meanwhile, revenues were E137.8bln, up from E126.1bln a year ago.
• Yesterday, PM Bayrou survived a no-confidence vote following a breakdown in talks over controversial pension reforms pushed through by President Emmanuel Macron in 2023. This was an expected outcome, with the far-right RN party abstaining from the vote.
• With the National Assembly set to go on its summer recess from mid-July until September, the Bayrou gov't is likely safe until the 2026 budget process gets underway.
• Alternatively, from 7 July (one year after the last election) President Emmanuel Macron could look to dissolve the National Assembly and hold a snap election. This would be an even riskier move than in 2024, with his centrist alliance polling poorly and at risk of further seat losses.