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Commerzbank Says Oil Prices Rangebound, US Equity Futures Stable, Euro Stronger

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Oil prices remained rangebound on lack of updates in the Middle East conflict, according to Commerzbank Research in a note. Treasuries moved back and forth late in New York, with the 30-year TIPS auction seeing strong demand, while longer-dated bonds were slightly weaker in Asia.

Treasury Secretary Scott Bessent said the US will announce a stronger focus on reducing the budget deficit by the end of this week or early next week, said the bank. Bessent will hold a press conference on Monday to discuss Iran. Liquidity buybacks could at least double, while any bond-market moves within 24 hours should be seen as "noise."

St Louis Federal Reserve President Alberto Musalem said government funding needs and the rapid expansion of Artificial Intelligence are driving the recent bond selloff. San Francisco Fed President Mary Daly said the bond market is showing confidence in the Fed and sees no need for either early rate cuts or hikes.

Fed Chair Kevin Warsh is set to speak at Jackson Hole next Friday.

US equity futures are stable, according to Commerzbank.

In Asia, China's Vice Finance Minister Liao Min said the country plans to roll out new fiscal support measures soon. Japan's Inflation rose in July, in line with expectations.

The Japanese yen weakened, added the bank.

In Europe, France's General Inspectorate warned that the deficit could increase by at least 0.5% of gross domestic product if the 2027 budget isn't approved before the presidential election. The government is also considering extending the tax on large-company profits.

The British banking industry is urging the government not to raise taxes further, said Commerzbank. GfK consumer confidence rose three points to a three-year high, beating expectations for a decline.

The euro strengthened, according to the bank.

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