POWER: Poland’s Enea Awards EPC Contract for Two 668MW Gas Plants

• +10,500 TUU5 103-19.62, buy through 103-19.38 post time offer at 0906:29ET, DV01 $386,000.
• The 2Y contract trades 103-19.5 last (+.88).

• Treasuries gain slightly after latest round of data: slightly lower Industrial Production w/ prior up-revised, Capacity Utilization and Mfg Production in-line.
• Tsy Sep'25 10Y futures trades +6 at 110-21.5 vs. 111-00 high, below key resistance and its recent high of 111-14+, a Fibonacci retracement and the Jun 5 high. Clearance of this hurdle would be bullish and highlight a stronger reversal. This would open 111-30, a Fibonacci retracement.
• Curves mixed, 2s10s -0.914 at 46.645, 5s30s +.065 at 92.111. 10Y yield at 4.4185% vs. 4.3770% low.
• Cross asset: Stocks remain weaker (SPX eminis -28.75 at 6061.0), Gold mildly higher at 3394.00, Bbg US$ index little changed at 1202.70 +0.11.

Natixis expect “some volatility (though less than last year) in the OAT curve by Q325, which should maintain or even strengthen the underperformance of OATs versus EGB peers”.

• Although they caution that “since H125, there have been several positive factors for the Eurozone, such as the German fiscal package and the gradual shift of non-residents' funds from the U.S. to the euro. All these factors could mitigate the risk of spreads widening”.
• They note that “regarding current idiosyncratic risk, the market needs further confidence that the French debt-to-GDP ratio will be reduced in the medium term. It will certainly take two to three years to remove the current political uncertainty premium in the spread”.
• They expect “the 10-Year OAT/Bund spread to narrow to 70bp by the end of the year, but budget discussions in autumn pose a risk of widening toward 75-80bp”.
• Spread last trades at ~71bp.