US EIA implied crude oil demand for week to Aug 28: 21.268 mln b/d, previous 19.987mln b/d.

U.S. Treasury Secretary Bessenter: Artificial intelligence companies have done a terrible job of explaining things to the American public.

According to the Financial Times, investors are reassessing the impact of French political risks on the bond market, with France set to announce its budget in October and hold presidential elections next spring. France's fiscal situation is not a new problem. Since the birth of the euro, French public finances have been precarious almost every year. It has exceeded the EU's deficit limits more than 20 times, and its debt-to-GDP ratio has consistently exceeded the limit since 2003. French bond yields are now similar to those during the 2009-2012 eurozone sovereign debt crisis. However, yields in other countries are roughly similar. A bigger problem lies in interest rate spreads. The yield on French 10-year OAT bonds is about 0.87 percentage points higher than that on German bonds, and about 0.4 percentage points higher than the average since former ECB President Draghi announced in 2012 that he would "do whatever it takes" to save the euro. France came closest to a debt crisis in the 21st century around 2011, when its interest rate spread with Germany reached 1.89 percentage points. France weathered the storm, but less so because it reformed its finances, and more because its problems were overlooked as a middle child while the bond market was busy tending to “weaker” children. The biggest difference then compared to now lies in the implicit support from the ECB. Draghi made it clear then that the monetary union was a political project European leaders were committed to maintaining, regardless of its economic shortcomings. The option of bond purchases lent credibility to that commitment. The recent Transmission Protection Instrument (TPI) further expanded the toolbox, giving the ECB a means closer to a financial stability tool, even if it's disguised as monetary policy. Neither the Outright Bond Purchase Program (OMT) nor the TPI has ever been actually used, and France will be an awkward test case. The OMT was designed for countries undergoing debt restructuring. While the TPI has removed some conditions, its use in core Eurozone countries carries significant political risk. We may witness its true usability if French interest rate spreads continue to widen. This doesn't mean France is safe. One source of its vulnerability is its investor base. More than 60% of French debt is held by foreign investors, compared to about one-third in Italy. These investors are more likely to "vote with their feet." Larissa de Barros Fritz of ABN AMRO estimates that about 35% of French bondholders are price-sensitive, meaning that pressure on French bonds does not require a large-scale sell-off; even a slight decrease in marginal buyer demand could put upward pressure on yields.