RANsquawk's  Instablog

1. Spanish PM Rajoy outlines new budget to save EUR 65bln over the next two-and-a-half years.

1. EU Commission states that senior bondholders and depositors would not be involved in Spanish banking haircuts.

1. Light Calendar and little newsflow keeps price action relatively muted in the European session, market focus now turns to the FOMC minutes release.

1. RANsquawk European Morning Briefing Video: http://youtu.be/E19rSDuMces

Market Re-Cap

European equities are seen firmer at the North American crossover, however, a light calendar and little newsflow has kept market price action muted.

Spanish PM Rajoy has presented new budget measures to the Spanish parliament, planning to save a total of EUR 65bln over the course of 30 months, through a series of indirect taxation adjustments and spending cuts in the public sector. The PM has further warned that Spain is not out of the woods yet, with the economic slump set to continue well into 2013.

The Bundesbank held a solid Bund auction this morning, with a higher bid/cover and, once again, a record low yield on their 10yr debt. The results show the continued preference amongst investors for the German paper, however the 10yr government bond yield spread between the periphery and the German counterpart is seen tighter on the day, with talk of domestic accounts buying Spanish and Italian paper taking pressure off yields. Elsewhere, the EU Commission have stated that senior bondholders and depositors would not be involved in the Spanish bank haircuts, further easing concerns.

UK Gilt futures have been observed outperforming with today's 41K- equivalent supply from Germany weighing on the Bund, with the effect being exacerbated by the BoE looking to purchase in the belly of the curve at today's QE operation.

Looking ahead in the session, market focus now turns to the US, where the FOMC are set to release the minutes of their June rate-setting meeting, due at 1900BST/1300CDT.

Asian Headlines

Japanese Domestic CGPI (Jun) M/M -0.6% vs. Exp. -0.4% (Prev. -0.4%, Rev. -0.5%)
Japanese Domestic CGPI (Jun) Y/Y -1.3% vs. Exp. -1.0% (Prev. -0.5%, Rev. -0.7%) (Newswires)

Chinese Premier Wen has said stabilizing growth is a top priority of the country, adding that current policies and measures include tools for boosting consumption, diversifying exports and promoting investment. (Xinhua)

S&P have said China's banking profitability will likely be hit in 2013. (Newswires) S&P highlight that China's recent interest rate cuts will not have too much of an effect on banking profits this year, but bottom lines will likely weaken in 2013. S&P estimate that the PBOC's actions will weaken the banking sector's return on assets in 2013 by 10bps.

US Headlines

Fitch affirmed the US at 'AAA'; outlook remains negative. (Newswires) Fitch noted that the US rating is underpinned by its highly productive, diversified and wealthy economy , as well as it's monetary and exchange rate flexibility. Fitch sees the US federal debt held by public reaching 79% of GDP by 2014, noting that risks to US forecasts are mostly to the downside in light of uncertainty regarding US fiscal policy and European debt crisis. Fitch doesn't see resolving US negative outlook until late 2013, absent material adverse shocks.

The City Council of San Bernardino, CA has voted to file for bankruptcy, marking the third Californian city in recent weeks to seek protection from creditors. (Newswires) The decision was made after a report compiled by city staff showed the city facing an imminent financial crisis, wherein the city's projected spending would exceed revenue by USD 45mln in the current fiscal year, with all reserves exhausted.

US MBA Mortgage Applications (Jul 6) W/W -2.1% vs. Prev. -6.7% (Newswires)

EU & UK Headlines

The Spanish government is being urged by European authorities to inflict losses running into billions of Euros on small savers by writing off preferred shares and subordinated bonds as a condition of the bailout, according to a draft memorandum. (FT-More)
The Spanish banks that will receive EU funds will have to contribute to their own restructuring process and will have to sell non-strategic, non-core assets and suppress dividend payments or any compensation on hybrid capital instruments. The Spanish government will then liquidate any entities that are seen as unviable. (El Pais)
The largest Spanish banks will be forced to undergo a series of stress tests as a condition of the aid, and should they have capital shortfalls, the banks will have to raise money on the market, or come to a burden-sharing agreement with investors before being granted access to government funds. (WSJ)

On the topic, the EU Commission have said they are working on the principle that private sector distribution of losses in Spain's banks will be necessary, but it is clear that senior bondholders and depositors would not be involved in this burden sharing. (Newswires)

The Spanish PM Rajoy has presented the country's revised budget to parliament, and sees structural cuts of 2.5% in 2013 and 1.9% in 2014. The new budget sees measures are to total EUR 65bln over the next 2-and-a-half years consisting of a VAT rise and public sector cuts. Rajoy estimates that 2013's contraction will be smaller, closer to 0%. However, Spain remains in the second deepest recession of history. (Newswires)

Germany sells EUR 4.153bln 1.75% Jul'22 Bund, bid/cover 1.50 , Prev. 1.40 (yield 1.31%, Prev. 1.520%, Retention 16.9%, Prev. 19.20%) (Newswires)

Equities

Core European bourses are seen modestly higher at the North American crossover, with the CAC-40 the only index taking losses. Outperformance is noted in the Spanish IBEX-35, as the PM presents a credible budget plan to parliament, as well as the EU Commission highlighting that senior bondholders and depositors of Spain's banks will not be involved in the proposed haircuts. The telecommunications sector is seen as the strongest performer in Europe today, closely following by utilities and financials.

European banking stocks are performing strongly today, with marked outperformance noted in the French banks. The moves were compounded with the EBA saying that European banks increased their capital reserves by EUR 94.4bln in the first half of this year by holding profits, selling shares and converting lower quality capital to common equity. As such, banks such as SocGen, Credit Agricole and BNP Paribas are seen higher by 2% apiece.

In individual equities news, after performing solidly over the past two sessions, EADS are now seen on a downward turn after having reported that their Airbus unit no longer sees their flagship A380 model reaching 30 sales this year. The reports saw an instant move lower of around 0.75% in EADS shares, which are now seen lower by over 4%.

FX

EUR/USD is seen higher at the midpoint of the European session, being assisted higher following unconfirmed market talk of Chinese names liquidating long-USD positions. The gains in the pair have been capped somewhat by semi-official sellers seen at the 1.2290 mark and a slew of option expiries between the 1.2200-1.2300 levels for the 10am (1500BST) NY cut could provide resistance in the pair as we progress through the session.

Touted sell orders in EUR/GBP have provided support in GBP/USD this morning, which is seen firmly higher by around 50pips today. Option expiries for the 10am (1500BST) NY cut seen at 1.5500 and 1.5540 may prove magnetic should the pair see any downside as the session moves forward. EUR/GBP may remain in focus as the session progresses should the cross approach 0.7884, which marks a 44-month low.

Commodities

WTI and Brent crude futures have somewhat rebounded and are seen higher ahead of the NYMEX pit open, as API inventory figures show stockpiles continuing their decline. Participants now look ahead to the weekly DOE numbers due for release at 1530BST/0930CDT.

Oil & Gas News:

1. The EIA have cut their crude oil price projection for 2012 as production has increased and slower economic growth has curbed fuel use. The EIA now expect WTI to average USD 92.83/BBL this year, a 4.1% fall in their forecast. The EIA have also cut their 2012 world oil demand growth forecast by 130,000BPD to 670,000BPD.
2. Morgan Stanley has said lost Iranian supply is unlikely to rebalance the market, as the market remains oversupplied.
3. According to sources, Saudi June oil output 10.1MBPD vs. 9.8MBPD in May
4. LNG exports from Australia are poised to triple in the next five years as demand from China and developing economies climbs, according to the Australian government. The government now expects to export 63MMT of LNG per year by 2017.
5. The US have raised their forecast for natural gas output in 2012 by 0.7% on higher shale production, and have raised their estimate for prices.
6. Oil production in North Dakota rose to a record high of just under 640,000 barrels per day in May, reinforcing the state's position as the second-largest oil producer in United States, behind Texas.
7. Credit Suisse have cut their 2012 WTI price forecast to USD 91/BBL from USD 112/BBL, and their Brent price forecast to USD 104/BBL from USD 125/BBL.

Geopolitical News:

1. China have told Japan to respect its sovereignty over the disputed chain of islands in the East China Sea. Japan has summoned China's ambassador to protest against the appearance of Chinese patrol boats near the islands. Three Chinese fishery patrol boats entered the area early on Wednesday and have since left, reports say.The Japanese and Chinese foreign ministers are due to hold talks on the sidelines of the Asian forum in Cambodia over the islands.

Last price taken at 1234BST

**Note:

Brent Crude August options expiry (1930BST/1330CDT)

You can now follow real-time news headlines on the move with the new RANsquawk app available to download for free at ransquawk.com/mobile_app for Apple iPhone, Blackberry and Android users.

1. Unconfirmed market talk that the PBOC may cut their banks' RRR offsets weak Chinese trade data.

1. UK Manufacturing and Industrial Production data firmly beats expectations.

1. Italian and Spanish 10-yr government bond yields move back below their 'unsustainable' psychological levels of 6% and 7% respectively.

1. RANsquawk European Morning Briefing Video: http://youtu.be/udzVdydTsd8

Market Re-Cap

European equities are seen firmly in the green at the North-American crossover, with outperformance noted in the peripheral bourses. Overnight news from the Eurogroup has confirmed that the EFSF/ESM rescue funds will be given the powers to intervene in the secondary bond markets, easing sentiment towards the European laggard economies. Gains are being led by a particularly strong technology sector, with the riskier financials and basic materials also making solid progress. Asset classes across the board in Europe are benefiting from risk appetite, with the Bund seen lower and both the Spanish and Italian 10-yr yields coming below their key levels of 7% and 6% respectively. The moves follow a spurt of activity in Europe with a number of factors assisting the way higher.

The UK posted expectation-beating manufacturing and industrial production numbers alongside a narrower-than-forecast trade deficit, easing pressure on the UK's troubles. This was followed by market talk of the PBOC cutting their banks' RRR either tonight or tomorrow, however this remains unconfirmed. The market chatter concerning China has somewhat counteracted the disappointing Chinese import numbers, which were seen weighing on sentiment in the overnight session.

The moves in the equity markets have been reflected in currency space, with EUR/USD benefiting from the declines in Spanish and Italian borrowing costs, as well as short-covering helping the pair through the Asian high, to print 1.2335 in the rally. German banking names are also noted buying in the pair, offsetting touted corporate sellers.

Looking ahead in the session, the US calendar remains light, as such, price action could be muted, but IBD/TIPPs optimism and JOLTs job openings will be watched.

Asian Headlines

Japanese Consumer Confidence (Jun) M/M 40.4 vs. Exp. 40.7 (Prev. 40.7) (Newswires)

The Japanese government hopes the BoJ will maintain powerful montary easing until deflation is overcome, according to a draft government growth strategy, adding that Japan will act appropriately as needed against excessive forex volatility. (Newswires)

Chinese Trade Balance (USD) (Jun) M/M 31.72bln vs. Exp. 24.00bln (Prev. 18.70bln)
Chinese Exports (Jun) Y/Y 11.3% vs. Exp. 10.6% (Prev. 15.3%)
Chinese Imports (Jun) Y/Y 6.3% vs. Exp. 11.0% (Prev. 12.7%) (Newswires)

Chinese CPI may be below 2% in July, according to a government economist at the State Council's Development Research Center. (People's Daily)

Market talk that the PBOC may cut banks' RRR either tonight or tomorrow - Unconfirmed. (RANsquawk)

US Headlines

US Treasury Secretary Geithner is to meet with Senate Democrats in order to discuss tax cuts; including the proposal to extend the Bush-era's USD 250,000 threshold. (Newswires)

EU & UK Headlines

Eurogroup update:

1. In return for the looser deficit targets for Spain, PM Rajoy will commit to fresh tax increases, likely to be announced this week, to shore up revenues. (FT-More)
2. Eurozone finance ministers are to give final approval to the Spanish banking bailout by the 20th July. (Newswires)
3. EU's Juncker has said the Spanish deal could see a EUR 30bln tranche by the end of the month, adding that maturities on the Spanish loans are to have an average 12-and-a-half year maturity, with some loans having up to 15 year maturities.
4. EFSF's Regling added that the EFSF will provide resources for any secondary market bond-buying and the ECB would act as a fiscal agent and the EFSF/ECB agreement means the ECB can intervene without impacting their balance sheet.
5. The Eurogroup are to reiterate their pledge to enable the bailout funds to buy bonds, according to EU sources.
6. According to a further Eurogroup statement, technical discussions on ESM direct banking recapitalisations is to begin in September. (Newswires)

UK Manufacturing Production (May) M/M 1.2% vs. Exp. -0.1% (Prev. -0.7%, Rev. -0.8%)
UK Manufacturing Production (May) Y/Y -1.7% vs. Exp. -1.9% (Prev. -0.3%, Rev. -1.5%)
UK Industrial Production (May) M/M 1.0% vs. Exp. -0.2% (Prev. 0.0%, Rev. -0.4%)
UK Industrial Production (May) Y/Y -1.6% vs. Exp. -2.1% (Prev. -1.0%, Rev. -2.0%)

UK Visible Trade Balance (GBP) (May) M/M -8.363bln vs. Exp. -9.100bln (Prev. -10.103bln, Rev. -9.709bln)
UK Trade Balance Non EU (GBP) (May) M/M -3.865bln vs. Exp. -4.700bln (Prev. -5.202bln, Rev. -5.125bln)
UK Total Trade Balance (GBP) (May) M/M -2.717bln vs. Exp. -3.500bln (Prev. -4.421bln, Rev. -4.088bln) (Newswires)

Sentiment towards the UK economy has eased somewhat as official figures for industrial and manufacturing production unexpectedly show a strong performance, and with a narrowing in the trade balance, the UK export market now appears firmer than previously thought. Upon the release of the data, GBP saw immediate strength, and Gilt futures saw an spike to the downside in the immediate fast money move, however this was quickly pared.

The Greek finance ministry have said the Troika are to return to Greece on July 24th and it is very unlikely that Greece will get a program extension at this point. The finance ministry added that the country needs an additional EUR 3bln in saving measures before the end of this year. (Newswires)

Equities

European equities are seen firmly in the green ahead of the Wall Street open, being led higher by technology stocks. The riskier sectors are also seeing a boost, with basic materials, industrials and financials also making strong progress. Risk appetite is evident in the equity markets today, with defensive health care stocks seen as the only laggard so far today. US stock futures are also benefiting, indicating a higher open on Wall Street today.

In individual equity news, Italian industrial group Finmeccanica have seen volatility in today's European session, following further news from the Farnborough Airshow, in which a company unit has announced it's plans to manufacture a new long-range civil helicopter, with production to begin in Somerset, UK. Finmeccanica shares have dipped in and out of trade, limit up, throughout the morning, and are currently indicated higher by 5%.

European food caterers Compass Group and Sodexo are seen as the worst performers in Europe today, following Sodexo's sales figures taking a significant hit from the economic downturn, which in turn has weighed upon Compass Group shares in a sector-related move. Compass Group shares are currently seen lower by 2.5%, with Sodexo lower by over 5% today.

FX

EUR/USD has been assisted through the Asian highs of 1.2322 to print a European session high of 1.2335 on the back of a risk-rally observed across the European asset classes. Much of the moves higher have been attributed to Asian names short-covering in the pair, with further upwards pressure noted from German names countering corporate sellers. A large option expiry for the 10am (1500BST) NY cut at the 1.2300 level may prove definitive in the pair for the next few hours.

GBP/USD saw similar benefits from the flurry of activity, particularly following the UK posting stronger-than-expected manufacturing and industrial production figures, which pushed the pair to test offers at the 1.5500 mark. Further option expiries for tomorrow's NY cut at the 1.5500 and 1.5540 levels could define the range for the pair across today's and tomorrow's sessions.

Commodities

WTI and Brent crude futures are seen lower ahead of the NYMEX pit open as Chinese import data further fuels concerns of a slowdown in the world's second largest economy. Elsewhere, the Norwegian government have intervened to prevent an oil worker strike in the county, easing supply concerns from the European producer.

Oil & Gas News:

1. The Norwegian government have said they have ordered compulsory arbitration to end a two-week oil and gas production strike, according to a labour ministry statement. Following the announcements, Statoil have said they are preparing to restart production at affected installations and they are expected to be back in full output mode by the end of the week.
2. China are to cut their gasoline and diesel prices tomorrow by CNY 420/ton and CNY 400/ton respectively, according to the Chinese NDRC.
3. China's crude oil imports in the first half of this year reached 140MMT, up 11% from a year earlier, according to the Chinese customs office. However, the country's monthly imports of crude fell to their lowest daily rate this year, from a record high in May.
4. Iran's oil production fell to 3.2MBPD in June, its lowest level since 1992, under the impact of Western sanctions, according to oil traders. In other news, Iran have raised their official selling price for August-loading crude to Asia for most of its grades, according to an industry source with knowledge of the matter.
5. Nat Gas slipped into backwardation for the first time since August 29th at yesterday's Nymex floor close.

Geopolitical News:

1. Iran's foreign minister said Iran could close the Strait of Hormuz if denied access to Persian Gulf but does not think such a time will come.
2. A prominent US lawmaker has asked Tuvalu to stop reflagging Iranian oil tankers and has warned the government of the risks of running against US sanctions.

You can now follow real-time news headlines on the move with the new RANsquawk app available to download for free at ransquawk.com/mobile_app for Apple iPhone, Blackberry and Android users.

1. Focus in Europe remains on the periphery, with the Spanish 10-year yield breaching 7% to the upside once more.

1. Apprehension surrounding the Chinese economy heightens as CPI falls to multi-month lows of 2.2%.

1. Market attention now shifts to the Eurogroup meeting, where they are set to discuss Greece, Spain and banking supervision.

1. RANsquawk European Morning Briefing Video: http://youtu.be/XSR5ndLGens

Market Re-Cap

European equities have been grinding lower throughout the European morning, with basic materials seen underperforming following the release of a multi-month low Chinese CPI figure, coming in at 2.2%, below the expected 2.3% reading.

The focus in Europe remains on the Mediterranean periphery, as weekend reports from Spanish press suggest that the heavily weighted Valencia region may be pressed into default unless it receives assistance from the central government. The sentiment is reflected in the Spanish debt market today, with the long-end of the curve showing record high yields, and the 10-yr bond yield remaining elevated above the 7% mark. News from an EU council draft, showing that Spain is to be given extra time to meet its deficit targets did bring the borrowing costs off their session highs, but they do remain stubbornly high at the North American crossover.

The gap between the core European nations and their flagging partners continues to widen, as Germany sell 6-month bills at a record low of -0.0344%. As such, the 10-yr government bond yield spread between the Mediterranean and Germany is seen markedly wider on the day.

Looking ahead in the session, data remains light on both sides of the pond, with participants looking ahead to the Eurogroup meeting arrivals, scheduled for 1300BST/0700CDT and the subsequent press conference at 2000BST/1400CDT.

Asian Headlines

Japanese Machine Orders (May) M/M -14.8% vs. Exp. -2.6% (Prev. 5.7%)
Japanese Eco Watchers Survey: Current (Jun) M/M 43.8 vs. Exp. 47.5 (Prev. 47.2)
Japanese Eco Watchers Survey: Outlook (Jun) M/M 45.7 (Prev. 48.1) (Newswires)
The Cabinet Office have said the Japanese economy had been picking up moderately but weak movement had been seen recently, down from its previous view that the pace of the economic recovery had been moderating.

Chinese CPI (Jun) Y/Y 2.2% vs. Exp. 2.3% (Prev. 3.0%)
Chinese PPI (Jun) Y/Y -2.1% vs. Exp. -2.0% (Prev. -1.4%) (Newswires)

Chinese Premier Wen called for more aggressive efforts to preset and fine-tune economic policies, due to China's economy running at a generally stable pace, but there is still huge downward pressure. (Xinhua) In related news, According to a former PBOC adviser, China does not need a new stimulus package like the CNY 4trl package in order to counter an economic slowdown.

US Headlines

Fed's Rosengren has said slow US economic growth will probably continue for quite some time as firms postpone hiring and investment in the face of an uncertain global economy. (Newswires) The Fed speaker added that it is possible to see a new round of quantitative easing. Rosengren has added that he expects growth and inflation to come in below the Fed's forecast. In other news, Fed's Evans has said he supports the use of Fed's balance sheet for further easing, supporting more aggressive action to aid the weak economy.

US President Obama may extend a Bush-era tax cut extension for people earning below USD 250,000, according to US administration officials. (New York Times)

EU & UK Headlines

S&P's France head said their AA+ remains a "very high" rating. He added that the EU summit decisions are a factor of stability and limits possible downgrades. (Newswires)

The ECB's decision to cap the funding banks can have using government-guaranteed bonds as collateral is credit negative for bondholders of banks without other forms of ECB-eligible collateral, according to Moody's. (Newswires)

Greek PM Samaras said the economic programme has gone off track; the fiscal programme has missed its targets, and he does not want to renegotiate Greece's targets. (Newswires) According to sources, the Troika have informed the Greek government that the earliest it can expect to receive its next loan tranche is in mid-September, placing more pressure on the government to stretch its finances. (eKathimerini)

The ECB official added that dropping ESM seniority is in lenders' interests, but it is not possible for the ECB to lend to the ESM to buy government bonds. The ECB might be able to lend the ESM for bridge financing, and the ESM does have the means to intervene. ECB's Asmussen said the European Stability Mechanism shouldn't have a banking license or tap the ECB directly. (La Stampa)

Senior European finance officials are settling on a framework that would create a new agency reporting to the ECB to police the largest banks in the Eurozone, according to sources involved in the discussions. (WSJ) The agency is expected to be up and running in the second half of 2013.

Spain is ready to create a single "bad bank" to house the distressed assets of its teetering financial sector, as it prepares to finalise terms of an EU bailout that is dividing the eurozone and spooking markets. (FT-More)

Spain's Valencia region has warned that it may fall into default unless it receives aid from the Spanish central government. (El Mundo)

Spain is to be given new deficit targets of 6.3% of GDP for 2012, 4.5% in 2013, 2.8% in 2014, according to an EU Council draft. (Newswires) As part of the deal, Spain must take immediate additional fiscal measures to meet their 2012 fiscal target obligations and must provide a detailed multi-annual budget plan 2013-14 by month-end.

Germany sells EUR 3.29bln 6-Month Bubills, bid/cover 1.70, prev. 1.20 (yield -0.0344%, prev. 0.007%), a record low yield (Newswires)

Equities

European bourses are seen lower across the board with the exception of the DAX index, managing to hold on to some minor gains at the North American crossover. Basic materials and consumer goods are seen leading the way lower, however, the telecommunications sector is seen outperforming all others today, seen higher by over 0.6%. The riskier assets have been weighed upon since the open by Chinese inflation data coming in at multi-month lows, adding to the already cautious market sentiment regarding a Chinese slowdown. US stock futures currently indicate a lower open on Wall Street, moving in line with their European counterparts.

In other equity news, Airline and Aircraft stocks are under particular focus during the ongoing annual Farnborough airshow, wherein a number of related stocks have provided optimistic updates on their order books, business plans and model releases. One stock of note is EADS' Airbus unit, which has revealed its revamped A330M model, showing streamlining and increased payload characteristics. As such, EADS, Deutsche Lufthansa and easyjet are seen among the top gainers in Europe today, and Boeing's share price following the open will also be closely watched.

With further focus on the periphery heading into the Eurogroup meeting, Spanish financials are seen taking heavy losses despite the news that they may be relieved of their troubled assets with the creation of a Spanish bad bank, as sovereign concerns continue to build. As such, Santander, BBVA and Bankia are seen among the top losers at the North American crossover today.

FX

FX markets are reflecting the cautious trade observed across the asset classes and are have been trading within a tight range heading into the North American crossover, as participants eye the Eurogroup meeting as the next risk event.

The uptick in borrowing costs for Spain and Italy has weighed upon the EUR currency throughout the morning, however the downside remains limited as a 1.2300 option expiry for the 10am (1500BST) NY cut proves magnetic throughout the European morning, however large option expiries sub-1.2100 set for later in the week could add pressure to the somewhat directionless trade observed this morning.

The narrow range of trading is also reflected also seen in GBP/USD, however the pair was pushed upwards to session highs of 1.5515 amid unconfirmed market talk of Swiss and Middle-Eastern buying in the pair. A touted option expiry at the 1.5500 for the 10am (1500BST) NY cut may also influence trade at the North American crossover.

Commodities

WTI and Brent crude futures are seen higher ahead of the NYMEX pit open, with an upcoming shutdown of Norwegian production placing upwards pressure on prices, however analysts have noted that the upward momentum may not last with Chinese data this week expected to come in soft, in addition to last week's weak Non-farm payrolls report from the US.

Oil & Gas News:

1. A lockout of workers on Norwegian oil platforms will go ahead as planned at midnight today, shutting down all oil and gas production, unless a solution is found today, according to the Norwegian Oil Industry Association.
2. Goldman Sachs expects the Norwegian government to intervene and settle a dispute between employers and unions in the ongoing pensions strike. Elsewhere, Goldman Sachs have maintained their 3-month Brent crude oil forecast at USD 120/BBL, saying that modest growth in the global economy should support demand.
3. Oil facilities in eastern Libya resumed normal operations after political protests shutdown production, as of Sunday.
4. Gulf OPEC states oppose a group emergency meeting.
5. The recent slide in oil prices is unwarranted and caused by countries pumping excess oil, according to an Iraqi minister.
6. Saudi Aramco are to provide full contracted supplies to Japanese customers in August, according to buyers at two refiners who received notification from the company.
7. Venezuela, overseer of the world's largest oil reserves, is growing more dependent on fuel imports from the US, importing record quantities of gasoline, fuel additives and liquefied petroleum gas in the first four months of this year, according to EIA data.

Geopolitical News:

1. An association of Iranian oil-products exporters will help the government bypass European Union sanctions on Iran's crude and ship as much as 500,000BPD.
2. Iran has plans to close Strait of Hormuz if it is threatened, according to its top military commander.
3. UN's Annan was holding talks in Damascus on Monday with Syrian President al-Assad, who said U.S. political support for "terrorists" was hindering the peace envoy's plan to end 16 months of bloodshed.

You can now follow real-time news headlines on the move with the new RANsquawk app available to download for free at ransquawk.com/mobile_app for Apple iPhone, Blackberry and Android users.