COMMODITIES: Bearish Trend Condition in WTI Futures Remains Intact

Treasury/Bund widening has reasserted itself since the middle of last week, with the 10-Year spread ~20bp wider over that horizon:

• Headline drivers of the widening move are the ECB decision and the impact of U.S. President Trump’s tariff choices:

1. The latest ECB decision suggested neutral rate discussions are still premature whilst policy is deemed “restrictive". Note that an ECB study on neutral rates is due to be released Friday.
2. Tariff readthrough: generally inflationary for the U.S. and growth-negative for much of the rest of the world. President Trump continues to point to the potential for tariffs on the EU.

• Citi eye further spread widening, noting that “that 10-Year Tsy/Bunds looks tight relative to front-end OIS differentials. The last few sessions have seen sharp re-widening, but the move may have legs, with the spread still around 50bp below the peak seen during Trump 1.0.”
• Slowing of EGB supply may also start to factor in after the usual frontloading was seen in January.

"The Kingdom of Norway, rated Aaa/AAA/AAA (all Stable) by Moody's/S&P/Fitch, has mandated Danske Bank, DNB Markets, Nordea and SEB to lead manage its forthcoming long 10-year (due 12 June 2035), fixed rate, NOK-denominated, RegS/144a format, syndicated benchmark Norwegian Government Bond (NGB) transaction. The transaction will be launched in the near future, subject to market conditions; FCA/ICMA Stabilisation" (Source: BBG)

• Norges Bank's 2025 borrowing plan noted that a new 10-year bond would be launched via syndication in February. From the plan: "The aim is an issuance volume of between NOK 20bn and NOK 25bn. In addition, NOK 4bn will be issued to the government’s own stock. The new bond will be reopened at auction."