"Memory Remains The Epicenter": Micron Tumbles Below $1,000 As Kospi Catches-Down And CXMT Shrinks The DRAM Cell

Micron just delivered the kind of quarter that would have sent the stock into orbit in June. Instead, it is tumbling and about to lose the $1,000 handle.

Barely two weeks after Micron (MU) guided to $60-$63 billion in fiscal Q1 revenue, crushing the $56.8 billion consensus, and a week after Goldman calculated that Micron alone would deliver 19% of the entire S&P 500's Q3 earnings growth...

Source

... the memory giant has slumped below $1000, down almost 5%, the lowest price in over 3 weeks. 

Sandisk was down even more, tumbling 7%, and according to Goldman's TMT desk, both names are now lower in 6 of their last 7 sessions. Micron is about to enter a bear market, down almost 20% from its June record close, and a stock where sentiment was "11/10" back in June is now trading like nobody wants to be the last one holding it.

The reason for the latest selloff is coming from the other side of the Pacific, where three things collided overnight: i) a Korean market reopening after Friday's Hangul Day holiday and catching up to two days of US chip selling, ii) the end of the record Samsung/SK Hynix buyback that we warned last week was the only thing propping up the Kospi, and iii) a weekend announcement out of Shanghai that China's DRAM champion CXMT has made "key progress" on the next-generation memory cell that Samsung and Hynix are still years away from mass producing.

Goldman's EMEA head of one-delta trading Rich Privorotsky summed it up in four words this morning (available to pro subs):

Pretty ugly in Korea. Kospi -3-4%, Samsung/Hynix -4%, Taiwan broadly flat. Memory remains the epicenter. CXMT announced a new 4F² DRAM architecture over the weekend. China already has ~10% DRAM revenue share and is aggressively adding capacity. Adds to concerns around peak memory earnings despite extraordinary near term fundamentals. Also perhaps a bit of travel and arrive post Samsung numbers which failed to massively surpass expectations.

In other words, the fundamentals have never been better, and that is precisely the problem: they are all priced in.

Let's take a closer look at the latest Korean carnage, the CXMT news, and why the bull case (record margins, sold-out 2027) is now running into the one thing markets fear more than a shortage: the end of one.

Korea Catches Down

The Kospi tumbled 3.65% to 6,384.2 in what Goldman's Seoul trading desk called "a one-way move from the open," closing right on top of its 200-day moving average at 6,376 (available to pro subs). The tech-heavy Kosdaq did even worse, sliding 4.8%. Here's how the desk described the session:

KOSPI fell sharply in a one-way move from the open and closed just above its 200DMA support (@ 6376), as escalating geopolitical tensions and US memory weakness weighed on the broader market. Foreigners extended their five day net-selling streak (focus-selling in Tech -$1.3bn), while retail investors net bought with bids concentrated in Tech (+$1.2bn, size of net-buying on a decreasing trend).

The semi index KRXSEMI dropped 5.2%, while SK Hynix (000660 KS) and Samsung (005930 KS) each lost about 4.5% as they played catch-down to "SOX's two-day weakness on reopening." That two-day weakness came on Thursday, when Goldman's US desk saw "a heavy wave of selling in Semis / AI complex around OpenAI revenue headlines that continued through Friday despite the clarification update." Foreigners dumped $782 million of Hynix and $415 million of Samsung, while retail (+$710 million in Samsung) once again caught the falling knives.

Here is how the past week looked in real time, as we posted this morning:

That is an 8% drop in the three sessions since Samsung's buyback program ran out, and the Kospi is now 30% below its June 22 record close. Korea's market, the poster child of the AI trade in the first half, has become the worst performer in the second, and as Bloomberg noted in a piece we ran last night, turnover has collapsed 70% from its late-May peak while foreigners have pulled $131 billion from Korean stocks this year, the most of any major Asian market.

The Only Buyer Has Left The Building (As Predicted)

Regular readers will recall that on Sept 3 we warned that only record buybacks were preventing a Kospi crash, and last Wednesday that the W55 trillion ($40 billion) Samsung/Hynix repurchase program, the largest in Korean history, was ending weeks ahead of schedule. As we put it at the time:

The only thing that was propping up the Kospi in the past months is ending: the frenzied, record buyback spree by Samsung and SK Hynix is now over, earlier than expected, as it was running far faster than expected: 55 trillion won in stock bought back. Kospi closed at the lows.

— zerohedge (@zerohedge) October 7, 2026

Samsung's program effectively ended on Oct 6, and Hynix's has a handful of sessions left at most at which point the biggest buyer in Korea will be gone. The math since then is not pretty: the Kospi has dropped in every session since, and today's flow data show exactly the hole we flagged. With the corporate bid gone, the only remaining buyer is Korean retail, and even there Goldman notes the "size of net-buying [is] on a decreasing trend." Bloomberg's numbers paint the same picture: margin loans are down from a June peak of 38.6 trillion won to about 33 trillion, and investor deposits have fallen to roughly 100 trillion won from nearly 140 trillion.

Translation: Korea's retail army already got carted out once in July, and it is in no hurry to volunteer for round two.

The ZH chart below shows just how far Korea has decoupled from the US memory complex since the June top. SK Hynix is down 45% from its June 22 close; the Kospi and Samsung are down roughly 30%. Micron and the SOX, which held up on the back of blowout US earnings, are only now starting to catch the Korean cold.

Four Square F: Why CXMT's Weekend News Matters

And then there's China.

On Saturday, ChangXin Memory Technologies (CXMT) president Cao Kanyu told an industry event in Shanghai that the company has made "key progress" on a new DRAM cell structure and plans to roll out a server-memory product based on it by the end of 2026, according to the South China Morning Post.

The technology is the so-called "4F²" (four square F) design, where each memory cell occupies an area of 4F², with F being the minimum line width of the chip. Today's mainstream commercial DRAM uses a 6F² cell. CXMT says the core of its design is a proprietary Vertical Surrounding Gate (VSG) transistor that uses a vertical gate to curb current leakage while shrinking the cell footprint.

Some quick math: shrinking each cell from 6F² to 4F² cuts its area by a third, which means up to ~50% more cells on the same die at the same line width, before any of the real-world overhead that eats into the gain. For a company that is effectively locked out of EUV, a density gain that doesn't require a leading-edge lithography node is precisely the workaround one would expect.

Why does this matter for Samsung and Hynix? Because they are chasing the same thing on a much slower timeline. SK Hynix only unveiled its 4F² roadmap in 2025, and Samsung, according to Korea's The Elec, targets mass production of sub-10nm DRAM based on the design by 2028. If CXMT actually ships a 4F² server product by year-end (a big if, since "key progress" is the kind of phrase that tends to precede more key progress), Beijing's memory champion will have leapfrogged the Korean duo on cell architecture by about two years.

Of course, the CXMT threat is hardly news to our readers. Back in July, we reported that CXMT was testing a production line for next-gen bonded DRAM, closing the gap with Korea "far faster than expected", and three weeks later, as the stock exploded over 450% in its IPO debut, Goldman warned that the "memory industry has a new problem." When Goldman initiated coverage of CXMT a month later, the bank laid out the scale of that problem:

Goldman initiates coverage on shares of CXMT at Buy with a 12M price target of Rmb129 (more than double from here). Goldman expect CXMT DRAM supply to reach 41% / 50% of Samsung / SK Hynix by 2028E from 28% / 35% in 2025

— zerohedge (@zerohedge) August 24, 2026

And for those still counting on export controls to keep China in check, there was this, from early September:

Oops: Chinese "memory-chip makers CXMT and YMTC have both stocked up enough DUVs from ASML to cover their expansion plans over the next three years" - FT Nothing like a little sanctions busting by the Dutch to blow up your investment thesis

— zerohedge (@zerohedge) September 8, 2026

Then, three weeks ago, Acer's CEO Jason Chen went further, telling reporters that "the supply shortage problem has already completely disappeared" as Chinese capacity keeps coming onto the market, and accusing the Big 3 memory makers of using public statements to signal each other that prices will stay high (since antitrust law prevents them from just saying so to each other directly). He expects memory prices to peak around the middle of 2027. Acer, HP and Asus are already putting CXMT chips in their PCs.

Put it all together and you get Privorotsky's "peak memory earnings" concern: nobody is arguing with the next two quarters; the worry is the price of DRAM in 2028, when Chinese supply is projected to be half of Hynix's and new Korean fabs come online at the same time.

"Extraordinary Near Term Fundamentals"... Again

The irony, of course, is that the numbers keep getting better. Case in point: Taiwan's Nanya Technology, which reported Q3 results this morning that Goldman's Taipei desk called "another astonishing quarter":

• Revenue of NT$133.6 billion, up 62% QoQ and 612% YoY
• Gross margin of 85.7% (+6.2pp QoQ) and operating margin of 80%
• Blended ASPs up more than 60% QoQ, with over half of that driven by contract resets on expiring 2025 long-term agreements

And the outlook remains just as tight: management expects double-digit contract price gains and gross margins above 80% to remain "achievable" in 2027, with no bit shipment growth at all in early 2027 due to near-zero channel inventory, with volumes inflecting only after new fab output starts in Q4 2027. Goldman's desk, however, noted the uncomfortable truth in its personal take: there is "not much excitement recently to drive further re-ratings."

That is the memory market in one sentence: record earnings, shrinking multiples. Or as Pictet's Jon Withaar told Bloomberg, the memory names "have become value names, cheap at current earnings," and "retail and fast money hedge funds do not chase value." Growth is what they chase, and they are increasingly worried that it peaks right around when CXMT's 4F² chips hit the market.

Hedge funds certainly aren't waiting around to find out. Goldman's Prime Book shows that last week US Info Tech went from the most net bought sector in 4 of the past 5 weeks to the most net sold, at the fastest pace in seven weeks, with Tech Hardware, Storage & Peripherals and Semis the most sold subsectors. Meanwhile, the Samsung earnings that were supposed to restart the trade (a nearly ninefold surge in operating profit) produced a selloff instead, which is all you need to know about where expectations are.

What To Watch

Goldman's Korea research team flagged six things it will be listening for on Samsung's Oct 29 earnings call, and the first one tells you exactly what the market is worried about: "whether the company calls for a tighter memory supply in 2028 similar to Micron." The others include new LTAs with customers, the HBM4 ramp (and the impact of HBM "despeccing"), updated capex plans, and shareholder returns (good luck with that last one: the market just got a live demonstration of what happens when the buyback ends). SK Hynix reports the last week of October.

Before then, this week brings TSMC on Thursday, ASML on Wednesday (which is reportedly raising spare-part prices for its Korean customers by 10%, with Samsung and Hynix accepting the hike starting January 2027; nice work if you can get it), and SEMICON West, all of which will give the chip complex plenty of opportunities to either restore faith or provide more fodder for the peak-cycle crowd.

Bottom Line

Privorotsky was careful to call this a concern about "peak memory earnings despite extraordinary near term fundamentals," and Nanya's results prove the near term is indeed extraordinary. But markets discount the future, and the future now includes a Chinese competitor that briefly became China's most valuable company in August, ASML tools stockpiled for three years, a 4F² product on the roadmap for this December, and the stated ambition of supplying half as much DRAM as SK Hynix by 2028.

The bulls will say the selloff is overdone and memory is "cheap at current earnings." We think the more likely outcome is that Korea, which led the memory trade on the way up and cracked first on the way down, is once again the leading indicator, just as we suggested back in June when we wrote that Micron won't be where you'll first hear the memory trade is over. Korea is now 30% off its highs and Hynix 45%; Micron is down 17% and about to enter a bear market.

Because nothing says "peak cycle" quite like 86% gross margins.

Tyler Durden Mon, 10/12/2026 - 11:05

Starbucks Kills Chipotle Takeover Rumor: "We're Not Buying" The Burrito Chain

Hopes of buying a Starbucks Iced Brown Sugar Oatmilk Shaken Espresso and a Chipotle Chicken Burrito Bowl under one roof through a possible merger of the two quick-service restaurant chains were squashed Monday morning.

"As a matter of policy, we don't comment on rumors and speculation, but we want to be clear we are not buying Chipotle," a Starbucks spokesperson told Barron's. The company said it remains focused on executing its "Back to Starbucks" turnaround strategy.

The rumor mill around the two QSRs' potential marriage began last Thursday, after a Financial Times report said Starbucks had explored acquiring Chipotle.

Analysts have expressed skepticism about the potential deal, which would be one of the biggest takeovers in the restaurant industry.

William Blair restaurant analyst Sharon Zackfia provided her first take on last week's news:

The Financial Times is reporting that Starbucks is exploring a potential takeover of Chipotle (CMG $32.88; Outperform), the restaurant concept that Starbucks CEO Brian Niccol helmed for 6 years prior to moving to Starbucks just over 2 years ago. Clearly, Niccol knows the Chipotle business extraordinarily well, which at a bare minimum is likely reassuring to Chipotle investors since the stock has declined more than 35% since the news of Niccol's departure. But what would a combined company look like, and what possible synergies and efficiencies exist?

There are no obvious revenue synergies between the two brands, although perhaps opportunities exist in shared loyalty ecosystems, cross-brand product placements (i.e., Starbucks Refreshers with your Barbacoa Burrito Bowl), or expanding Chipotle's licensed international business more quickly through Starbucks' existing relationships. Traditional supply chain efficiencies are likely limited given very different supply chains, with Starbucks sourcing green coffee and pre-made food products, while Chipotle works directly with farms for raw ingredients. G&A savings would likely center in corporate G&A and technology, which we very roundly estimate could be in the $300 million range.

With an enterprise value of more than $40 billion, Chipotle would represent the largest-ever restaurant acquisition. We suspect a fair proxy of a likely acquisition price would be closer to $50 billion, similar to the 20% premiums that Inspire Brands paid to purchase Dunkin' and that JAB paid to purchase Panera Bread. As of the end of June, Starbucks had about $9.4 billion in net debt and a debt ratio of just over 2 times. An incremental debt slug of nearly $49 billion to buy Chipotle is tough math, and would be dilutive to a combined company 2027 EPS at any interest rate over 4% (assuming no cost savings/revenue synergies). It would also balloon the combined company's leverage ratio to about 6 times, which would be high in the publicly traded restaurant landscape. An all-shares takeover would be slightly accretive to EPS, with our back-of-the-envelope math suggesting accretion of about 3%. One wild card could be a potential sale of Starbucks Japan, which could help fund a Chipotle acquisition.

Following this morning's Barron's report, Chipotle shares fell 3% in early US trading, while Starbucks gained about 1%.

Starbucks' denial removes any such dream of a near-term tie-up that would've resulted in buying an espresso and burrito under one roof. 

Tyler Durden Mon, 10/12/2026 - 10:50

Zelensky Says He'll Hold Elections If Putin Agrees To 60-Day Ceasefire

Authored by Dave DeCamp via AntiWar.com

Ukrainian President Volodymyr Zelensky said on Sunday that he would hold elections in Ukraine if Russian President Vladimir Putin agreed to a 60-day ceasefire, comments that came after President Trump said Ukraine needed a new president to reach a deal with Russia.

Zelensky’s term expired in May 2024, but he has remained in power because no elections have been held, and he has continued to reject the growing calls within Ukraine to hold a vote.

Zelensky during his nightly address on October 11, 2026 (Office of Ukrainian President)

Trump said on Saturday that he suggested Ukraine "get a new leader who can make a deal because he could have made many deals and for some reason he never does."

Responding to Trump, Zelensky said in an interview with ABC News that Trump should tell Putin to agree to a 60-day ceasefire.

"So please tell Putin, give us two months, 60 days off. Total ceasefire, 60 days, and we will organize elections," he said. "Of course, we will be ready for any choice of our people, exactly Ukrainian people."

Zelensky and other Ukrainian officials have justified not holding an election by pointing to Ukraine’s constitution, which prohibits elections during martial law, first declared after Russia’s invasion and extended since, though Zelensky suggested back in 2023 that he could hold one if the US and other Western countries paid for it.

Zelensky also offered criticism of a deal Trump announced that would involve the US importing Russian diesel, calling it a "birthday gift" to Putin that would allow Russia to "kill us, kill our children."

Trump also lashed out at Zelensky on Saturday over Ukraine’s attacks on Russian oil refineries, as he’s attempting to shift blame for the global energy crisis from the US war with Iran to the Russia-Ukraine war.

Moscow responds by once again saying it is not looking for a temporary truce, but wants a lasting political settlement to the conflict:

Q: Zelensky said he is ready to hold presidential elections in Ukraine if there is a 60-day truce. Kremlin: Russia wants a lasting peace, not a ceasefire. https://t.co/aAiwBQ8Q8c

— Clash Report (@clashreport) October 12, 2026

However, it’s been widely reported that Ukraine's attacks on Russian energy infrastructure are supported by US intelligence.

Tyler Durden Mon, 10/12/2026 - 10:20

"Full-On Truman Show": Former State Dept. Official Exposes USAID's Censorship Machine In Brazil

Former State Department official Mike Benz laid out USAID's sweeping involvement in Brazil's political and institutional landscape, detailing a network of American funding that reached media organizations, universities, activist groups and organizations involved with the country's election system.

Benz, who serves as executive director of the Foundation for Freedom Online, broke down the extent of USAID's footprint during an appearance on "The Benny Show" with host Benny Johnson.

"What's happening in Brazil was a full-on Truman show. You had the media funded by USAID. You had the universities funded by USAID. You had the staffers of the Supreme Court and the TSE (Superior Electoral Court), the election court, USAID. You had all the constitutional law advocates funded by USAID. You had the LGBT activists funded by USAID," Benz explained.

Mike Benz Says Brazil Was A Full On 'Truman Show' Propped Up By USAID: 'It Was All FAKE!'

"You had the media funded by USAID. You had the universities funded by USAID. You had the staffers of the Supreme Court and the TSE, the election court, USAID. You had all the... pic.twitter.com/6fqDjRjSSI

— Benny Johnson (@bennyjohnson) October 5, 2026

"It's full spectrum. If you were to walk down a city block in Sao Paulo or, I don't know, Brasilia, you would have a 360 vision of institutions funded and puppeteered by USAID without ever knowing it," the former State Department official added. "In fact, USAID, knowing what they were doing, and I need to be careful about what I can and can't say here, let's just say, would anyone be surprised, for example, if USAID was going around and telling its grantees in Brazil to remove the USAID logo so that it doesn't get out that grantee's connection to USAID?"

Benz said USAID's influence could continue even after its funding disappeared because institutional and legal changes remained in place.

"They knew what they were doing. They knew how sensitive it was. Would you be surprised, for example, if USAID, which basically set up the censorship state in Brazil, and this is actually something, let me quickly pivot to say, it is true that this is the first Brazilian election since the 2020 municipal elections in Brazil that does not have USAID money slushing around Lula and his allies, but is still an election that is in many ways under the thumb of the ghost of USAID," he said. "There is something I call kind of the clockmaker's dilemma, which is USAID, even when you remove it, the institutional and legal changes that a country goes through can live on even if you cut USAID funding down to zero."

Benz then zeroed in on two of Brazil's most powerful institutions, the Supreme Federal Court (STF) and Superior Electoral Court (TSE): "For example, in Brazil, you have this apparatus through the STF and TSE, the Supreme Court and the basically election court that determines all things around elections, and basically after Bolsonaro won in 2018, the TSE court with Alexandre de Moraes, the famous Voldemort judge, they declared disinformation a threat to free and fair elections, not just disinformation during an election season, but disinformation any time, misinformation, disinformation any time about anything because it could pollute people's, I don't know, sense of what's true or false in the information ecosystem, and so it could have an impact on an election three years away if this false information is allowed to circulate online."

Benz also went into detail about USAID's connections to Brazil's election and judicial establishment.

"That was set up by USAID, USAID flooded the zone, USAID had contact at every level with the TSE court, with the Alexandre de Moraes court," he said. "I testified to the Brazilian Senate Relations Committee and put pictures from USAID's website of Alexandre de Moraes being trained by CEPS (Competitive Economy Program), the USAID grantee, by NED (National Endowment for Democracy), the USAID grantee has gotten $3 billion from USAID and was created by the Central Intelligence Agency."

Benz's remarks come just days after Brazil's conservatives delivered a powerful showing at the ballot box. Flávio Bolsonaro finished first in the opening round of the presidential election, taking 47.03% of the vote to left-wing President Luiz Inácio Lula da Silva's 45.16%, setting up an October 25 runoff.

Bolsonaro's Liberal Party emerged as the largest party in both houses of Congress, winning 121 seats in the Chamber of Deputies and expanding its Senate delegation from 15 to 28 seats.

* * *

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Tyler Durden Mon, 10/12/2026 - 10:15

Cyberattack Disrupts Refrigeration Systems At Hundreds Of French Supermarkets

A cyberattack targeting supermarket refrigeration equipment has caused widespread disruption across France, leaving hundreds of stores facing spoiled inventory, financial losses and potentially costly equipment damage, according to France 24.

Roughly 150 to 200 Intermarché locations and nearly 100 Coopérative U stores were caught up in the incident, which allowed attackers to interfere with temperature controls remotely. E. Leclerc, France's largest supermarket operator, was also reportedly affected, while Carrefour Market and Monoprix have been identified as possible additional targets, according to AFP and BFM TV.

Rather than stealing customer information or demanding ransom, the attackers apparently focused on destroying physical inventory. Refrigeration systems were reportedly forced into abnormal operating conditions, rendering substantial quantities of perishable merchandise unsellable. Some equipment was allegedly pushed into continuous defrost cycles, with temperatures reaching 122°F. Two stores in Alsace alone reportedly sustained approximately €270,000 in losses, according to La Dépêche du Midi.

Coopérative U chief Dominique Schelcher described the incident as unlike anything the industry had previously experienced. Beyond the immediate destruction of food, retailers now face questions about insurance coverage, operational recovery and the security of increasingly interconnected store equipment.

The report says that French authorities have launched a criminal investigation, with prosecutors examining the scale of the losses and reports that some refrigeration units caught fire.

The episode illustrates how cyberattacks are increasingly capable of inflicting damage well beyond computer networks. By exploiting connected industrial equipment, attackers can disrupt everyday commerce, destroy valuable goods and potentially threaten critical infrastructure without ever physically entering a facility.

The incident comes as France intensifies efforts to defend essential infrastructure against foreign interference, including potential Russian hybrid operations. However, no public evidence has established who was responsible for this particular attack, according to AFP.

Tyler Durden Mon, 10/12/2026 - 10:05

The War On Columbus Was Never Really About Columbus

Authored by Jarrett Stepman via The Daily Signal,

Christopher Columbus is having a revival thanks to President Donald Trump and the good sense of the American people.

This is a remarkable change from just a few years ago, when it seemed likely that the country was ready to purge Columbus, the Founding Fathers, and pretty much any notable figure from our past.

It was so over for Columbus Day that even some Republicans were looking to sweep it into the dustbin of history.

But we've come a long way since 2020.

More Americans now understand that the attack on Columbus is an attack on the idea of America itself, and that caving to the Left's demands to strike his holiday from the calendar as his statues came tumbling down was tantamount to civilizational suicide.

Trump's reelection ushered in a major vibe shift that was already under way. Columbus Day came back stronger than ever as part of the larger counterrevolution against the madness of the Great Awokening.

In March, a Columbus statue - a replica of one tossed by protesters into Baltimore Harbor during the post-George Floyd riots, no less - was placed in front of the White House.

And on Wednesday, Trump issued a proclamation announcing that Columbus Day would be celebrated on Oct. 12.

On Wednesday, President Trump signed a proclamation honoring the 'unrivaled greatness' of Christopher Columbus and declaring Oct. 12, 2026, as Columbus Day.

"Today, we honor his life of valor, adventure, and ingenuity. We cherish his memory and pledge to safeguard his story.... pic.twitter.com/XMs4JmTmmv

— Daily Signal (@DailySignal) October 8, 2026

"Today, we reaffirm that Christopher Columbus is a legend whose vision, fortitude, and perseverance unleashed a dynamic of history that led to the creation of the greatest, freest, and most just Nation in history," Trump's proclamation read. "We are forever indebted to his courageous voyage, and we will never allow his legacy to be erased by radical extremists."

That is an accurate and appropriate tribute for a man for whom we owe so much, even if Columbus never saw, considered, or had any notion of the future United States. We certainly are indebted to his incredible voyage that changed the tide of history.

But that last line from Trump about never allowing his legacy to be erased is key here, because the battle over Columbus is so important for our own day, even apart from the particulars of his life and momentous voyage.

Leftist writers like Howard Zinn and the generations of acolytes he spawned begin from the premise that the West, Christendom, is inherently broken and perhaps even the source of evil and "inequality" in our world.

The far-Left has long condemned Columbus and those who followed him into the New World as genocidal monsters, virtually boogeymen who were not only flawed as all men are but as uniquely terrible.

This is in many ways a perversion of history. The same folks who lament and often overstate the violence and malice of European arrivals in the Americas hardly seem to care about the violence and terror that preceded them. That's irrelevant and even annoyingly inconvenient to their narrative.

What they want is a future in which Western societies - especially the people of the United States - fundamentally reject their own past, culture, traditions, and certainly their religion. That is the only way to ensure that a new, secular ideology - these days some variant of identitarian socialism or Marxism - can rush to fill the vacuum of what brings life meaning and order.

By this method of indoctrination and reprogramming, traditional Western rational skepticism was transformed into a malignant, irrational self-loathing.

The gloved, flipping off of a Columbus statue by the now-mayor of New York, Zohran Mamdani, is the perfect expression of this kind of deranged, knee-jerk anti-Americanism so common among the spoiled children of the global elites and the campus activist class that follows them. Columbus set set into the unknown with three small ships and a compass to guide him. These twerps cast vulgarities behind soft gloves and think they are edgy.

Columbus was once a figure whom all Americans, immigrant and native-born, could love and admire, just like our flag and our Constitution.

If it was up to the Left, he would remain only as a symbol for all who live in America, immigrant and native-born, to loathe and condemn.

Again, don't be fooled, this battle isn't really about a 15th-century Italian navigator, it's about us, the here and the now, the nation that ultimately emerged from splinters of his tiny ships.

The Left thought they had finally won this battle.

It wasn't just a few radical extremists on the fringes of college campuses who were trying to obliterate Columbus Day while putting Indigenous Peoples' Day atop the figurative empty pedestal where he once stood. It was "mainstream" institutions and political leaders carrying out the purge too.

President Joe Biden - or perhaps a facsimile wielding an autopen - essentially declared the far-Left's triumph in 2021. He put out a "commemoration" for Columbus Day that spent more time apologizing for the famed explorer and lamenting the "shameful" history of America than saying anything nice about him.

An Italian and some Spaniards got on a boat and did something. That was about the only positive thing he could say amid the condemnations.

This is what the Left had been building up to for a long time. This was the final blow. It was over for Columbus Day. The wheels of history had turned. The old explorer and the America he once represented were finally gone and buried for good.

We know now that the battle wasn't over. There are still many, many Americans who aren't so eager to jettison our past and darken our future. The battle for our future is ongoing. Columbus stands again in front of the White House, and hopefully in more communities across the United States.

This Columbus Day we should remember how far we had fallen; how close we came to the final chapter of our incredible history. Let us boldly go forward, like Columbus, with pride in our past and confidence in our future.

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.

Tyler Durden Mon, 10/12/2026 - 09:50

Feds Raid Ilhan Omar's DC Home As Immigration Fraud Investigation Heats Up

Federal agents raided the Washington, D.C., home of Rep. Ilhan Omar (D-MN) early Monday morning as part of an ongoing criminal investigation into the Somali-born congresswoman's immigration paperwork, according to Fox News.

The pre-dawn operation began around 6 a.m., with multiple agents wearing Homeland Security Investigations (HSI) jackets observed outside the residence. Two sources close to the investigation told Fox News that authorities are examining immigration documents completed by Omar's late father when she was a child.

BREAKING: Federal agents raid Democratic Rep. Ilhan Omar's Washington, D.C., home early Monday morning as part of an ongoing federal criminal investigation. Homeland Security Investigations agents arrived around 6 a.m., with both DHS and the Justice Department involved in the operation. The DOJ confirms agents executed a judicially authorized search warrant, but officials have not publicly disclosed the full scope of the investigation.

— Fox News (@FoxNews) October 12, 2026

The Department of Justice confirmed that federal agents had executed a search warrant.

"Today in the Washington, D.C., area, Homeland Security Investigations executed a judicially authorized search warrant secured by the Department of Justice. This enforcement action is part of an ongoing federal investigation," a DOJ spokesperson told Fox News Digital.

The DOJ has not publicly disclosed the specific allegations underlying the warrant.

@FoxNews VIDEO obtained by @FoxNews Digital from the HSI raid at Ilhan Omar's DC residence this morning. https://t.co/eJ1jzIpb4N

— Peter D’Abrosca (@pmd_reports) October 12, 2026

The raid marks a significant escalation in a federal investigation that White House border czar Tom Homan publicly acknowledged last month - and revives longstanding questions surrounding Omar's immigration and marital history.

Homan Confirmed Criminal Investigation In September

As Jonathan Turley previously noted, Homan confirmed that federal authorities were examining allegations involving the Minnesota Democrat.

The controversy centers in part on longstanding claims that Omar married her brother, Ahmed Nur Said Elmi, to facilitate an immigration benefit - allegations Omar has repeatedly denied and which have not been established as fact.

Turley examined whether the allegations could support a fraud case or instead amounted to potentially defamatory accusations, and noted that the statute of limitations could complicate any prosecution involving events dating back many years.

In September, Omar told Fox News that DHS had not contacted her regarding the investigation.

"No, they have not," she said when asked whether federal authorities had reached out. At the time, Homan declined to disclose whether investigators possessed evidence of immigration or naturalization fraud.

Less than a month later, federal agents have now searched her Washington residence under a warrant obtained by the Justice Department.

Years Of Controversy Over Omar's Immigration History

Omar, who was born in Somalia and became a naturalized American citizen in 2000, has faced questions about her marital history since before her election to Congress in 2018. The controversy involves her 2009 legal marriage to Elmi, their subsequent separation, and her relationship with Ahmed Hirsi, with whom she had children before their legal marriage.

The pre-dawn raid of Ilhan Omar is part of an immigration fraud investigation into documents filled out when she came into the United States. When Liz Collin of Alpha News last came on the show, she explained that her parents may have lied about her age to fraudulently get her citizenship. Ilhan has always claimed she came to America as a 'child' and was naturalized as a minor at 17 — but new documents show she may have been 18. That is really important because as an adult Illhan would have to apply for citizenship herself and not be waved in as a minor dependent of her war criminal father. "Omar has repeatedly claimed that she became a citizen at the age of 17. But based on public records, Omar was actually 18 in the year 2000, when her father became eligible to apply for citizenship." "Just two days later, her congressional staff contacted the Minnesota Legislative Reference Library, this is back in 2019, to change the Congresswoman's date of birth from October 4th, 1981 to October 4th, 1982." "Omar would not have been a minor when her father applied to be a citizen. So you have Representative Omar changing her birth year." Public records indicate Omar was 18 when she immigrated to the U.S., which would have made her ineligible to enter as a minor under her father. Illhan Omar may have committed immigration fraud to become a legal American Citizen. If the DOJ and DHS proves this, it would be massive. https://t.co/94J4vREeev

— Benny Johnson (@bennyjohnson) October 12, 2026

Critics have questioned the chronology of those relationships and alleged that Elmi was actually Omar's brother. Omar has consistently rejected the allegation as false and politically motivated. 

Monday's developments raise a separate question: whether investigators are examining discrepancies in the childhood immigration records, the longstanding marital allegations, or some combination of issues.

    OCTOBER ONLY.$10 OFFYOUR NEXT ORDER.$30 min. Ends Oct 31. One per customer.GET MY $10 OFF →Signs you up for ZeroHedge Store emails. Can't be combined. Every order helps support ZeroHedge. Tyler Durden Mon, 10/12/2026 - 09:35

Riyadh Airport Closure Extended As Saudi Arabia Projects 'Normalcy', Hosting World Petroleum Congress

Saudi Arabia’s King Khalid International Airport's closure has been significantly extended in an unprecedented move by aviation authorities following the two weekend ballistic missile attacks by Yemen's Houthis which left at least 13 people killed and over 300 injured. Prior strikes rocked the airport last week, and in all 15 have been killed in two weeks, including a Saudi Airlines pilot.

Saudi Arabia's civil aviation body Monday extended the suspension of operations, stating "The General Authority of Civil Aviation has announced the extension of the suspension of operations at King Khalid International Airport in Riyadh in order to complete the necessary procedures to verify the safety of the facilities and their operational readiness."

While it didn't give a date of planned resumption of airport operations, separately a NOTAM (Notice to Air Missions, formerly Notice to Airmen) indicated a likely closure through the entire week, through a least Saturday:

Aviation @FAANews NOTAM A3604/26, issued on October 12, declares the entire airport unavailable due to precautionary measures until October 17 at 21:00 UTC, equivalent to midnight in Saudi Arabia at the start of October 18. This follows an earlier NOTAM closing Aircraft Stand C1 from October 8 through October 15. The notices confirm an airport-wide operational restriction, although they do not specify the full extent of the damage or establish when normal operations will resume.

Saudi Energy Minister Prince Abdulaziz bin Salman has said that Houthi attacks on the kingdom's airports are serious and so his country's response must be "equally serious". The Saudis are still lobbying intensely behind the scenes for more direct military help from Western allies, especially the United States, which so far has been largely on the sidelines.

Saudi Ministry of Media handout/Reuters

The Houthis are not just turning up the security pressure on Saudi Arabia, but the economic pressure as well. On Monday CNBC writes, "Australia, New Zealand, the U.K., the U.S., France, Germany, Japan and others have warned against travel to the kingdom, which is hosting the World ⁠Petroleum Congress."

The Saudis are actually pressing ahead with the 25th WPC Energy Conference in Riyadh (going all this week), trying desperately to project a sense of normalcy. Where are the missile interceptors?

The Saudi energy minister, Abdulaziz bin Salman, told the conference that “fear has no place in the Saudi lexicon”, emphasising that the resilience of the kingdom’s energy system and the determination of its people to confront crises.

An urgent review is under way as to how Houthi missiles are repeatedly penetrating badly stretched Saudi air defences. Schoolchildren and some office workers were advised to work from home. The Houthis have also targeted the city of Khamis Mushait, and the King Fahd international airport in Dammam.

Oil prices have in the meantime climbed to near two-week highs. WTI is up 1.2% at $93.00 and Brent is at session highs, above $106 having traded in a $102.33-$106.17 range, as Iran insists Hormuz stays shut until all seven of its conditions are met and Trump mulls joining Saudi strikes on the Houthis. Below is a note from Deutsche Bank's Jim Reid:

The big geopolitical/energy story over the weekend is the continued complexity of the Middle East and Russia/Ukraine conflicts. Trump announced yesterday that Russia and Ukraine had agreed to an immediate "energy ceasefire", but overnight developments underline how fragile that claim is. Zelenskyy said Ukraine supports a ceasefire if Russia does too and is awaiting details from Washington, while Moscow had still not publicly confirmed it. Zelenskyy also said Russia subsequently struck a thermal power plant in Kharkiv and other Ukrainian energy infrastructure. So for now this looks more like an untested US proposal than a functioning ceasefire, particularly after a similar arrangement last month failed to endure.

The proposed ceasefire is closely linked to the extraordinary US pivot on Russian diesel. Ukrainian refinery strikes had forced Moscow to restrict fuel exports, tightening an already constrained products market. Trump's deal with Putin would allow around 13.5 million barrels of Russian diesel back into global markets this month via a temporary US sanctions waiver, potentially including the first US imports since March 2022. Zelenskyy has criticised the move, while Reuters reported that Washington threatened to cut intelligence sharing and weapons procurement support unless Kyiv halted refinery strikes. Russian barrels returning would be bearish for diesel cracks, but the overnight strikes make the ceasefire increasingly uncertain and highlight strains between Washington and Kyiv.

Meanwhile, Middle East energy risk has moved sharply in the other direction. Riyadh's King Khalid International Airport was hit again on Sunday after repeated attacks over the past week. Saudi Arabia said the latest strike killed one person and injured 11, after Saturday's attack killed 12 and wounded more than 300. The escalation comes as Saudi-backed Yemeni government forces counter recent Houthi gains near Bab el-Mandeb, the crucial Red Sea shipping chokepoint. Repeated strikes disrupting flights in Riyadh also underline how difficult the Houthi threat may be for Saudi Arabia to suppress.

That leaves a meaningful risk of wider regional escalation. Saudi Arabia has intensified air strikes in Yemen, while Trump said the US "may" join strikes against the Houthis after an American was among those killed on Saturday. Overnight, Iran denied directing the Houthis and its foreign minister urged diplomacy with Saudi Arabia, but there is little sign yet of de-escalation. Washington has so far limited support to intelligence sharing while Riyadh seeks more direct US help and air-defence support. So even if a Russia/Ukraine ceasefire and Russian diesel waiver ease pressure on refined products, attacks on Riyadh and fighting around Bab el-Mandeb leave an upside tail risk for oil and shipping costs, alongside continuing Strait of Hormuz disruption.

As for the ability (or inability) of Saudi Arabia and its allies to protect the kingdom's airports and key Aramco oil facilities, this will remain a big open question. Various global airlines will continue their suspensions even after Riyadh and other airports try to open back up for business.

KSA: The vulnerability will continue, and there are few interceptors. These are different situations. It was not Israel that intercepted the bulk of the Iranian missiles, but an entire U.S. defense network backed by NATO. 
Radars installed in Gulf countries, American ships, and even systems in Turkey tracked the trajectory of Iranian missiles, generating predictions and selecting which systems would be used. 
Israel only entered the equation when this entire network failed and the missiles reached Israeli airspace. When Iran began destroying this American radar network, the success rate of its missiles rose significantly. The distance from Iran to Israel, covered by this extensive monitoring, provided advantages that the Saudis do not have, I’m talking about tracking, predictions, and especially reaction time. Even so, Iranian missiles still achieved success with maneuvers that struck targets in Israel. Interception rates against the Houthis will not improve, and these missiles operate in saturation attacks coordinated with large numbers of drones. To make matters worse, the Saudis currently have no more than 350–500 interceptors, when they would need at least three times that number to deal with what the Houthis possess, and even then with no guarantee of success. There is nothing Bin Salman can do. He will not accept any agreement that unifies Yemen under Houthi rule. Nor is it within his power to end the war without an agreement between Iran and Trump. Everything in this theater has Iran’s hand behind it, as I have already detailed in previous articles. Can the Turks and Pakistanis declare war and attack the Yemenis? And what would they gain from it? Saudi billions? In that scenario we would face a long war and the economic strangulation of Saudi Arabia. Would the Saudis draw that money from their sovereign wealth fund? That would create more distrust and problems than solutions. Every scenario leads to destruction and heavy losses. The Saudi offensive still has significant military potential, but will it operate with an economic knife at its throat? Trump and Netanyahu are the ones who need to fix the problem they created, not only for the region, but for the world.

— Patricia Marins (@pati_marins64) October 12, 2026

More Latest Developments

via Al Jazeera...

• OPEC has lowered its oil demand growth forecast for this year to 400,000 barrels per day from 1.4 million at the start of the year, Haitham al-Ghais, Secretary General of the organisation says.
• Saudi Aramco CEO Amin Nasser has said that until the Strait of Hormuz is fully reopened, pressure across the energy chain will only intensify.
• Mohsen Rezai, Iran’s Supreme National Security Council secretary, says the Strait of Hormuz will not fully reopen until the US starts fulfiling its commitments and respecting Iranian demands.
• Abolfazl Shekarchi, chief spokesman of the Iranian armed forces, has said the country will not allow the restoration of the US-Israeli regional order in West Asia, according to the IRIB broadcaster.
• Three in four households in Yemen are unable to put food on the table as fighting intensifies in the country, the World Food Programme (WFP) warns.

via Newsquawk...

• Deadly Houthi attacks on the Saudi capital’s main airport over the weekend raised the risk of a wider war that may draw in the US. More missiles and drones were intercepted overnight. BBG
• The United States' response to Iran's seven conditions in a proposal to reopen the strategic Strait of Hormuz was "insufficient", Iran's security chief, Mohsen Rezaei, was quoted by state media on Sunday as saying. RTRS
• Oil swung after US President Donald Trump said Kyiv and Moscow had agreed to an “energy ceasefire,” while in the Middle East, Saudi Arabia suffered its deadliest strikes since the Iran war began. BBG
• Ukraine will continue to respond with long-range strikes against Russia unless Moscow agrees to an energy ceasefire that still hasn’t happened, President Volodymyr Zelenskyy said on Monday. BBG
• Saudi Arabia is looking at ways to expand its oil pipeline capacity to destinations outside the Persian Gulf to 10 million barrels a day within two to three years, said Energy Minister Prince Abdulaziz bin Salman. BBG
• US Senators reportedly demanded that President Trump reverse the Russian fuel imports deal, while Republican Senator Tillis warned that Trump’s Russian diesel deal may be illegal and put American lives at risk.

Tyler Durden Mon, 10/12/2026 - 09:20

'No Beardos, No Weirdos': Hegseth's 'State Of The Force' Speech Shows Recruiting Up, Generals Out

Authored by Mike Fredenburg via The Epoch Times,

Secretary of War Hegseth's Sept. 30 State of the Force speech was refreshingly blunt, but it was also extremely informative. On the blunt side of things, Hegseth let the sergeants, chiefs, and junior officers know that the U.S. military was done with the woke mindset that had been destroying its fighting power:

"We are no longer the woke department or the weak department. Simple translation of that: no fatties, no trannies, no beardos, no weirdos, no wimps, no radicals. Just warriors. Just tough, ready, committed troops."

He framed last year's historic speech as a break from "the Defense Department of old" and "liberation day [from the DEI/woke mindset]," stating that the War Department's mission was "war fighting. Preparing to fight and preparing to win, unrelenting, unapologetic, and uncompromising in that single pursuit."

The Golden Rule

Encouragingly, just as he did a year ago in his Sept. 30, 2025, speech to generals and admirals, he stated civilian and military leadership were morally obligated to follow the Golden Rule:

"Do unto your unit as you would have done unto your own child's unit. Would you want them serving in a unit where standards were lowered to meet quotas? Or a unit where leaders were promoted for reasons other than merit, performance, or war fighting? The answer is not just no. The answer is hell no."

But along with his emphasis on rooting out the corrosive DEI/woke mindset that was seriously damaging America's fighting ability, Hegseth made a whole bunch of announcements and claims, including:

• Recruiting is at multi-decade highs across the active force, Guard, and Reserve, and retention is at record levels, including among sailors on long deployments.
• About 10 percent of generals and admirals have been removed, and general-officer billets cut by another 10 percent, for a reduction of about 20 percent.
• Standards from around 1990 are back, including gender-neutral combat standards set at the previous male level, a combat field test, two fitness tests a year, height and weight standards, and daily physical training.
• Diversity quotas, identity observances, and social-emotional leader evaluations have been dropped in favor of merit-based promotion and a performance test for colonels seeking general rank.
• Military sexual assaults and suicides are down, and black and female recruiting are up even without quotas.
• Commanders report more authority, capability, and backing than at any point in their careers.
• Autonomous Warfare Command: A new four-star command dedicated to deploying autonomous and robotic systems across the joint force, slated for full launch by Oct. 1, 2027.
• Project Meridian: A comprehensive 120-day future warfare study co-led by high-profile figures including Elon Musk, Palmer Luckey, and Newt Gingrich, with findings expected in late January 2027.
• Fortress America: An initiative focusing on domestic base resilience by requiring major U.S. installations to self-generate power, bringing critical supply chains home, and hardening communications.
• The Next Great American Base: A competitive program encouraging state governors to vie to host a new installation for 15,000 to 25,000 troops, marking the first new domestic military base in approximately 40 years.
• America's Corps of Cadets, with distinguished-military-college status and commissioning priority for new programs at Louisiana State, Liberty, Tuskegee, Mississippi State, and Hillsdale.
• An Office of Religious Affairs reporting directly to the Secretary, charged with protecting chaplain funding, chapel infrastructure, and religious support.

Recruiting and Retention Up Bigly

Many of the announcements warrant a whole article, if not a book, but the claims on recruiting and retention will be addressed here. Hegseth said the turnaround is "wildly popular both inside our ranks and with young Americans looking from the outside," and that retention is at record rates. As an implied rebuke to the exaggerated narrative of how bad things had been aboard the USS Abraham Lincoln, he noted the ship had an 84.4 percent reenlistment rate - among the highest of any aircraft carrier despite being at sea for more than 260 days. But beyond the one ship, Hegseth noted that when it comes to recruiting, every branch has been setting records since President Donald Trump won in November 2024: Army, Navy, Marine Corps, Air Force, Space Force, National Guard, Reserves, pilots, and special forces.

Indeed, all five active-duty services met or exceeded their fiscal 2025 recruiting goals, the strongest department-wide performance in about 15 years. The Army signed about 62,050 recruits, the Navy about 44,096, and the Air Force about 30,166, with both the Marine Corps and Space Force meeting their goals of 26,600 and 819, respectively. Through the first part of fiscal 2026, the services were still at or above their retention goals. The Air Force, for example, has been maintaining retention rates of between 85 and 90 percent.

Hegseth attributes the success in recruiting and retention to restored confidence in military leadership rather than bonuses: Americans enlist and stay, he argued, when they are led by "strong patriots, not by weak weirdos," and when promotion is merit-based. With recruiting and retention up, Hegseth made the case, a strong case, that Trump's support for restoring the warrior culture of the U.S. military reversed a downward slide and replaced it with an upward trend in competence, readiness, and warfighting. The new commands, bases, and pipelines matter, but for men and women that comprise the backbone of the military, what mattered more was the promise that he and Trump have their back, and that the people fighting beside them will be there because they meet the higher, revitalized standards, not a quota, and that the same rule will apply to the leaders giving the orders.

And that is the way it should be - period.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Mon, 10/12/2026 - 08:45

Futures Flat As Oil Rebounds After Trump's "Energy Ceasefire" Unravels, Memory Stocks Slide

US futures are flat, with S&P contracts clinging to small gains and the Nasdaq slipping into the red as memory stocks slide, after a weekend of contradictory geopolitical headlines whipsawed oil (see below). As of 8:00am ET, S&P futures were 0.1% higher at 7,865 while Nasdaq futures were down 0.1%. Dow futures are up about 0.1%. That follows a Friday session in which the S&P rose 0.6% to cap a 1.2% weekly gain (after a record close on Wednesday) and the Dow jumped 0.8%. In premarket trading, Meta leads the Mag 7 higher (+1.8%) while memory names slide, with Micron down 2.1% after Samsung and SK Hynix tumbled more than 4% in Seoul with buyback quotas now largely completed; T-Mobile rebounded 1.1% on a Raymond James upgrade after Friday's SpaceX-spectrum puke, CCC Intelligent jumps 8.3% on buyout talks with GTCR and Elliott and IREN rises 5% on a reported cloud deal with Anthropic. The day's driver is oil (again), and the market can't decide which war to price: WTI is up 1.2% at $93.00 and Brent is at session highs, above $106 having traded in a $102.33-$106.17 range, as Iran insists Hormuz stays shut until all seven of its conditions are met and Trump mulls joining Saudi strikes on the Houthis. There is no cash Treasury trading today for the Columbus Day holiday; Treasury futures drift lower led by the ultras, implying slight bear steepening, while bunds and gilts are higher (10Y gilt yield down 4bps to 5.41%, bund down 2bps to 3.46%) as diesel prices fall following US efforts to release Russian fuel to the market. The Bloomberg dollar index is steady with the Swiss franc the weakest G10 currency and the pound outperforming ahead of PM Burnham's speech on EU ties, while India's rupee jumped more than 1% after the RBI's strongest support measures since the 2013 taper tantrum. In commodities, spot gold slipped to a $4,168 low, silver is near $60.70, copper extends Friday's rebound as Chinese buyers return from Golden Week, Dutch TTF is firmer at up to €82.90/MWh and US natgas is down 2.5% to $3.14. Bitcoin reversed from a peak of $84,260 to trade near $83,300. There is no US economic data today; Fed speaker slate includes Hammack (12:10pm). The US cash bond market is closed for Columbus Day; stock markets are open.

In premarket trading, Meta shares outperform Magnificent 7 peers, with the cohort helping boost stock futures: Meta Platforms (META) +1.6%, Microsoft (MSFT) +0.4%, Alphabet (GOOGL) -0.2%, Amazon (AMZN) -0.2%, Apple (AAPL) +0.2%, Nvidia (NVDA) -0.2%, Tesla (TSLA) little changed

• Adobe (ADBE) slips 2.6% after Wells Fargo Securities downgraded the maker of software for creative professionals by two notches to underweight.
• AST SpaceMobile (ASTS) rises 4.4% after Deutsche Bank upgraded the satellite broadband operator to buy, seeing a buying opportunity in the wake of recent weakness.
• Biogen (BIIB) gains 4.1% as JPMorgan upgrades to overweight ahead of an increasingly compelling catalyst path in 2027.
• Bristol Myers (BMY) rises 4.4% after the drugmaker said a late-stage trial of a lower dose of its drug candidate for lung disease met its primary endpoint.
• CCC Intelligent Solutions (CCC) rises 11% as GTCR and Elliott Investment Management are said to be in advanced talks to acquire the car-insurance software provider.
• First Solar (FSLR) climbs 2.7% after Truist Securities upgraded the alternative energy company to buy, seeing “a stronger backdrop for pricing into the 2030s.”
• First Tracks Biotherapeutics (TRAX) gains 16% after the drug developer gave topline results from an early-stage trial of its experimental therapy for celiac disease.
• Hub Group (HUBG) gains 3.8% after Baird analyst Daniel Moore raised the recommendation on the transportation company to outperform, writing that the stock’s risk-reward profile has grown increasingly attractive.
• Iren (IREN) rises 3.8% as the Information reports that the crypto miner-turned-AI server provider has entered a multiyear cloud deal with Anthropic.
• Manhattan Associates (MANH) rises 3.5% after Morgan Stanley upgraded the software company to overweight, seeing it as a potential AI winner.
• Salesforce (CRM) climbs 4.1% after BofA Global Research raised the recommendation on the software company to buy, pointing to tailwinds from AI adoption.
• Tyler Technologies (TYL) gains 2.5% after Wells Fargo Securities upgraded the software company to overweight from equal-weight, seeing fading headwinds.

In other corporate news, Amazon is in negotiations to acquire Decart AI, a startup whose software makes it easier for developers to switch between different AI chips, in a deal that could be valued at around $7 billion, the WSJ reported (because when compute is scarce, the next best thing is buying the switchboard). Nvidia is in talks to acquire or deepen its investment in Reflection AI, a developer of open-weight models the Trump administration hopes will rival cheap Chinese alternatives, per the FT. Broadcom CEO Hock Tan said capital will be the biggest constraint facing the company as AI development continues. HSBC will phase out fixed-pay allowances for senior staff in favor of bonuses. Suzhou Dongshan Precision Manufacturing has started gauging investor interest for a Hong Kong listing that may raise $2 billion to $3 billion. Bambusa Therapeutics filed for an IPO and OPay filed for an NYSE IPO that could be up to $500 million, per IFR. TotalEnergies and KKR will add 700 MW of renewables to their US JV, Uber invested in Croatian robotaxi startup Verne, and Tata's TML CV raised its offer for Iveco to €14.40 a share, declaring it best and final. Hon Hai and FII shares dropped after the US ITC opened a Section 337 probe into AI server power-supply makers.

Trump's surprise Russia-Ukraine "energy ceasefire" (which Moscow has yet to confirm, and which Zelensky says Russia ignored within hours by hitting a power plant) initially knocked Brent toward $102, but repeated Houthi strikes on Riyadh's main airport and another tanker hit in the Strait of Hormuz sent crude right back up; as a result Brent is back above $106 while cash Treasuries are closed for Columbus Day with the 10Y last at 5.24%, a whisker from its highest level since 2002.

Oil, according to Bloomberg's Jan-Patrick Barnert, "looks to be trading Washington's midterm calendar rather than the latest Houthi attacks on Saudi Arabia", with equities overnight "taking the cheaper barrel and asking few questions." The cheaper barrel didn't last: after Trump declared an energy truce that Zelensky said was "news to me", Kyiv said Russia struck a thermal power plant in Kharkiv, the Kremlin said it has nothing to say yet, and Riyadh's King Khalid airport was hit again a day after an attack that killed 12 people including an American. Meanwhile, tankers keep catching fire in Hormuz, with the IRGC saying a third tanker since Saturday hit a sea mine. Brent has round-tripped from $102 to $105.50 and the level to watch, per Bloomberg, is $100.

And yet, markets keep doing what they're not supposed to: the S&P is within 1% of an all-time high and closing in on 8,000 even as the 10Y hit 5.36% last Wednesday, its highest intraday level since 2002 (more in "Diesel And Yields"). Underneath, the picture is far uglier: per Goldman's Lee Coppersmith, the median S&P stock is now 16% below its own high and breadth is the weakest since the Dot-Com Bubble, while Bloomberg flags that 57% of the S&P is in a bear market. Over the past month the S&P is up 2% while its equal-weighted version is down 0.6% (Nomura's McElligott explains why the index is blind to the carnage beneath it).

The S&P 500 is approaching 8,000 as its rising trend channel remains intact, with pullbacks contained and all key moving averages trending higher.

“A lot is at stake” for earnings, given recent volatility on a number of fronts, said JPMorgan strategist Mislav Matejka, who thinks the season will reassure the market.

“Growth should stay healthy, especially for earnings, recession risk remains low, and inflation momentum should moderate into 2027. This combination of resilient growth and easing inflation points to more of a ‘Goldilocks’ backdrop,” wrote Goldman strategists including Christian Mueller-Glissmann, who shifted back to overweight equities over three months and overweight bonds over 12 months.

“It is very important for investors to continue to be positioned in the AI trade. It is still the main source of earnings growth with continued upward revisions in earnings,” said Yiping Liao, a portfolio manager at Templeton Global Investments, who nonetheless said investors should be “selective and risk aware.”

The season gets underway tomorrow, when Goldman Sachs, JPMorgan, Wells Fargo and Citigroup report, with Bank of America and Morgan Stanley following on Wednesday. Bloomberg Intelligence expects earnings growth at major US banks to slow from the second quarter as capital-markets activity has moderated. In AI, results from ASML and TSMC this week will give more clues about the sustainability of the AI spending boom, while Nvidia, AMD and Marvell will be in focus as the Open Compute Project Global Summit kicks off today in San Jose, with keynotes from AMD's Lisa Su and Nvidia's Ian Buck. Outside of earnings, Wednesday's CPI report is the key test: a hotter-than-expected reading risks extending the bond selloff and putting renewed pressure on equity valuations.

“Double-digit earnings growth has so far helped offset the negative impact of higher rates,” said Vincent Juvyns, chief investment strategist at ING in Brussels. “The earnings season will be important in determining whether the bull market has further room to run.”

Note that this week is only the appetizer: 44% of index market cap reports in the week of Oct. 26, versus just 7% this week.

JPM's Market Intel desk under Andrew Tyler reiterates its Tactically Bullish view into earnings, calling Thursday's 3.4% OpenAI-driven Semis drop "an accounting misinterpretation" and arguing that with the SOX ~20% off its July lows and ~15% below its June highs, Semis can climb this latest wall of worry as Hynix and Samsung point to ongoing thematic strength. Still, the desk concedes "the market feels shakier than its index levels suggest" given poor breadth, high bond yields and AI doubts. FactSet has Q3 at 29.6% EPS growth on 12.4% revenue growth, with all 11 sectors expected to grow both for only the second time in history. On CPI, JPM's Feroli sees headline +0.55% M/M and core +0.18%, a print that should keep the market from re-pricing an October hike; the desk flags clients who see the 10Y on "an unstoppable trajectory to 5.50%", a level JPM calls "anathema for stocks." Positioning Intel notes HFs bought US banks for a second straight week (+2z), while Semis were the most net sold industry in North America (-1.5z) and European positioning has slid to roughly the 13th percentile.

Goldman's desks are similarly split between a strong tape and a nervous crowd. In London, Rich Privorotsky notes speculators are "heavily short bonds and Russell, long Nasdaq. We know where the pain trade lies," adding that "perhaps measured escalation around $100 oil is something markets can live with." Coppersmith writes that "there is clearly a lot more risk aversion beneath the surface than SPX would suggest," but that absent another meaningful move higher in oil and rates, "the path of least resistance still looks higher." Brian Garrett's index vol colleague goes further: "it feels like there is a higher probability of VIX >25 than there is of SPX -2%." And John Flood sees "the perfect recipe for the S&P 500 to pierce through 8k in short order": robust corporate demand (GS sees buybacks of $1.7 trillion in 2027 vs $1.5 trillion this year), negative sentiment and low HF net exposure. Meanwhile, Goldman's commodity team raised its Dec 2026 Brent forecast to $90 from $85, noting the timespreads risk premium is just over $20 and that "risks to our price forecast remain significantly tilted to the upside on net, especially near-term" (more on the near-record oil risk premium here).

The diesel crunch is now driving policy. Russia's Deputy PM Novak said Moscow has started lifting diesel export restrictions immediately and is ready to supply additional volumes to the US as early as October, Canada said it will maximize oil and diesel exports to the US, and the US authorized an emergency exchange of up to 4 million barrels from the SPR to address storm-related disruptions. The backlash was bipartisan: Republican Senator Tillis warned Trump's Russian diesel deal may be illegal, while Reuters reported Washington threatened to cut intelligence sharing and weapons support unless Kyiv halted refinery strikes. Trump, for his part, said refiners and retailers need to begin dropping prices (with gas prices steering the midterms, that is hardly a surprise).

In Europe, the bond stress is easing but not gone: the Franco-German 10Y spread tightened 3.7bps last week to 137bps and the 2Y spread came in 14.6bps, but GS flags that French bonds resumed declines as investors lose faith in Paris' ability to get a grip on its debt. Lawmakers formally begin debating the draft budget tomorrow, with the final vote scheduled for October 20, while a new poll shows Le Pen and Mélenchon would reach the French presidential runoff. In Berlin, Germany's fragile government was plunged deeper into turmoil after Labor Minister and SPD co-leader Baerbel Bas abruptly resigned.

In Europe, the Stoxx 600 rises 0.5% to 634.66, with falling oil prices boosting sentiment before the third-quarter earnings season begins in earnest, with 415 members up and 167 down. Banks and insurance are the biggest gainers while media and chemicals are the worst performers. Autos are in focus after the EU capped Chinese hybrid imports at 350,000 a year from as soon as December 1, with Renault up 3.2% and Stellantis up 2.5%. Per JPM, Spain and Italy lead while France lags, and Defense, Ceasefire and Power plays are among the top D1 baskets. Here are the biggest European movers:

• Nordex shares rise as much as 4.5% after the wind turbine company comfortably beat order expectations in the third quarter, according to analysts.
• Inwit shares rise as much as 5% in Milan after Reuters reported that the Italian tower operator’s major shareholders are exploring a potential take-private deal and arranging financing for a possible transaction.
• Scatec shares rise as much as 4.6% after analysts at DNB Carnegie raised their price target and earnings estimates on the Norwegian renewable energy company.
• Aroundtown shares fall as much as 3.9% after Goldman Sachs downgraded the German property firm to sell from neutral, seeing higher finance costs pressuring earnings.
• Informa shares fall as much as 4% after a deadly weekend attack on Saudi Arabia’s main airport cast doubt on the events operator’s upcoming exhibitions in the country.
• Hays shares fall as much as 12% after a trading update from the recruitment firm flagged weakness in permanent hiring.
• Hacksaw slumps as much as 30%, the most on record, after the Swedish online gambling and gaming company says third-quarter total revenue growth was below its historical growth pace.

Asian stocks were mixed in thin, holiday-hit trading with Japan closed for Sports Day, as chip heavyweights dragged the regional benchmark lower. Korea's Kospi tumbled 3.6% to 6,384, closing just above its 200DMA, as it played catch-up to last week's global chip selloff after a long holiday weekend; SK Hynix fell 4.5% and Samsung 4.4%, the Kosdaq slid 4.83% and foreigners sold $1.5 billion, a five-day net selling streak (turnover in Korea has collapsed 70% from its late-May peak). A North Korean ballistic missile launch didn't help. Apple's Asian suppliers fell after a report the company cut component orders for the iPhone 18 Pro and Pro Max (confirming our article on soft iPhone 18 Pro demand), and Chinese and Taiwanese AI server power-supply makers slid on the ITC probe. Elsewhere, Australia's ASX 200 rose 0.8%, the Hang Seng added 0.2% and the CSI 300 fell 0.7%, while Chinese automakers including BYD climbed on the EU hybrid deal and Geely jumped as much as 6.2% on plans to launch in Canada. Indonesia's JCI fell 1.9% to its lowest since July. China's September passenger vehicle sales fell 24% Y/Y and the NDRC vowed to step up countercyclical support.

In FX, the Bloomberg Dollar Spot Index steadied as geopolitical tensions saw the dollar edge higher against most G-10 peers; the DXY holds at the upper end of a 102.10-102.37 range. The Swiss franc leads G10 losses, with USD/CHF up 0.4% to 0.8330, while EUR/USD slips 0.1% to 1.1184 (speculative euro shorts are the largest since 2020, per CFTC data cited by Newsquawk) and USD/JPY rises 0.2% to 158.61. The pound is the slight outperformer ahead of PM Burnham's speech on improving relations with the EU. In EM, India's rupee strengthened the most in six months after the RBI took its strongest measures to bolster the currency since the 2013 taper tantrum, even as Indian 10Y yields jumped 10bps to 7.40%, and Korea's won hit a two-year high.

In rates, cash Treasuries are closed for Columbus Day, and Treasury futures drift lower, led by the ultra-long bond contracts implying a slight bear steepening move: ultras are down around 4 ticks, with the front-end and belly 1 to 2 ticks lower. The 10Y last traded at 5.238% on Friday, after falling 3.3bps on the week. Bunds found support over the London session from a drop in diesel prices, following US efforts to release Russian fuel to the market; the 10Y bund yield is down 2bps at 3.46% and the 10Y gilt yield down 4bps at 5.41%, although gilts have since pared their gains on the bounce in energy. The IG dollar issuance slate is empty, but dealers expect around $30 billion this week, the majority from US banks once earnings are out (it is hard to blame CFOs for not rushing to lock in 24-year-high funding costs). Fed's Hammack speaks at NABE today; she said recently that "this does not look like an economy that has restraint."

In commodities, WTI is up 0.8% at $92.56 (in a $89.61-$93.13 range) and Brent December is up 0.8% at $105.57 after swinging between $102.33 and $106.17, as Houthi attacks on Saudi Arabia and Trump's suggestion the US could join Saudi strikes offset the initial selloff on the energy truce. Saudi Energy Minister Prince Abdulaziz said the kingdom's ability to supply energy remains resilient and that it is looking to expand pipeline capacity to destinations outside the Gulf to 10 million b/d within two to three years; Persian Gulf crude exports continue to flow at rates close to pre-war levels. OPEC's Secretary General sees oil demand growth of 400k b/d this year, while BP is restarting its Na Kika and Thunder Horse platforms in the Gulf of Mexico after Hurricane Isaias. Dutch TTF rose to a €82.90/MWh high from €80.63, spot gold fell to $4,168/oz from $4,217 as Fed tightening expectations weigh, spot silver pared gains to $60.66 from $61.45, and 3M LME copper trades toward the top of a $14,554.55-$14,660/t range on the return of Chinese buyers.

There is no US economic data today; Fed speaker slate includes Hammack (12:10pm). The US cash bond market is closed for Columbus Day; stock markets are open. There are no major pre-market earnings; the Open Compute Project Global Summit kicks off in San Jose and the IMF/World Bank annual meetings run in Bangkok through October 18. Watch luxury names including Capri and Tapestry later today as LVMH reports after the European close.

Market Snapshot

Top Overnight News

• Deadly Houthi attacks on the Saudi capital’s main airport over the weekend raised the risk of a wider war that may draw in the US. More missiles and drones were intercepted overnight. BBG
• The United States' response to Iran's seven conditions in a proposal to reopen the strategic Strait of Hormuz was "insufficient", Iran's security chief, Mohsen Rezaei, was quoted by state media on Sunday as saying. RTRS
• Oil swung after US President Donald Trump said Kyiv and Moscow had agreed to an “energy ceasefire,” while in the Middle East, Saudi Arabia suffered its deadliest strikes since the Iran war began. BBG
• Ukraine will continue to respond with long-range strikes against Russia unless Moscow agrees to an energy ceasefire that still hasn’t happened, President Volodymyr Zelenskyy said on Monday. BBG
• Saudi Arabia is looking at ways to expand its oil pipeline capacity to destinations outside the Persian Gulf to 10 million barrels a day within two to three years, said Energy Minister Prince Abdulaziz bin Salman. BBG
• US Senators reportedly demanded that President Trump reverse the Russian fuel imports deal, while Republican Senator Tillis warned that Trump’s Russian diesel deal may be illegal and put American lives at risk. Newsquawk
• The EU will cap imports of Chinese hybrid vehicles at 350,000 a year starting as soon as Dec. 1, with the limit rising 6% annually from the second year, according to a document seen by Bloomberg. The effect is likely to be more restrictive for Chinese automakers than tariffs, BI said. BBG
• China passenger vehicle sales tumbled 28% Y/Y in Sept, the largest so far this year and a sign that the domestic market remains under pressure. Nikkei
• Nvidia is in talks to acquire or deepen its investment in US start-up Reflection AI, a developer of open-weight models that President Donald Trump’s administration hopes will rival cheap Chinese alternatives, people with direct knowledge of the matter said. FT
• Amazon is in talks to acquire artificial-intelligence startup Decart in a deal that could be valued at around $7 billion. San Francisco-based Decart’s software makes it easier for developers to switch between different AI chips, a capability that is becoming increasingly important as companies race to secure more computing power. WSJ
• Broadcom CEO Hock Tan said on Monday that capital will be the biggest constraint facing the company as AI development continues. RTRS
• Nato members should prepare a robust response for a possible deadly Russian “hybrid” attack, Poland’s foreign minister has said, as concern grows about Moscow’s escalating sabotage campaign on European soil. FT
• France’s bonds resumed declines. Investors are losing faith in its ability to get a grip on its debt and growing increasingly concerned about the risk of contagion.
• Germany’s fragile government was plunged deeper into turmoil on Monday after the labor minister and co-chair of the junior coalition partner abruptly resigned from both her posts. BBG
• Bond markets are starting to do some of the lifting for central banks around the world by pushing up borrowing costs themselves, potentially reducing the number of benchmark interest-rate hikes needed to get inflation under control. BBG
• India’s consumer prices rose 5.54% Y/Y in September, vs est. +5.58%, the highest in almost two years and backing RBI tightening. BBG
• Robert E. Hall and Michael Woodford won the Nobel Prize in Economics for their work on stabilization. BBG
• Goldman raised its Dec 2026 Brent forecast to $90/bbl from $85 and still sees Brent averaging $80 in 2027; in an upside scenario where Gulf output stays 5mb/d below February levels, Brent could average around $125 in 2027. GIR
• JPM's Feroli sees September headline CPI at +0.55% M/M (3.6% Y/Y) and core at +0.18% (2.4% Y/Y), enough to keep the bond market from re-pricing an October hike. JPM

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed after geopolitical headlines dominated weekend newsflow and amid thinned conditions to start the week due to Sports Day in Japan and the quasi-holiday stateside for Columbus Day. ASX 200 was led higher by gains in key local industries with outperformance in mining, materials, financials, resources and tech, while telecoms, real estate, energy and the consumer sectors lagged. KOSPI suffered amid pressure in the tech heavyweights, while sentiment was also not helped by North Korea's latest missile launch, which prompted South Korea to convene an emergency meeting. Hang Seng and Shanghai Comp were mixed after the PBoC's improved liquidity efforts, while China also released draft rules establishing nationwide requirements for automotive parts remanufacturing and recently agreed to halve hybrid car exports to the EU in a landmark deal.

Top Asian News

• China will launch an employment initiative aimed at adapting workers' skills to the development of AI.
• China released draft rules establishing nationwide requirements for automotive parts remanufacturing, including standards for sourcing used components, product quality, traceability and market oversight.
• China proposed banning fully concealed car door handles and requiring physical controls for certain safety-critical functions as regulators seek to strengthen oversight of vehicle design and product testing. Rules would prohibit foldable and flexible vehicle display screens and require additional safety assessments for a range of innovative designs, while the proposal noted some manufacturers launched products without sufficient testing.
• China is to cut VAT export tax rebate rate on NEVs to 9% (from 13%), effective April 1st 2027.
• China's passenger vehicle sales fell 24% Y/Y to 1.7mln units in September, while new energy vehicle sales declined 12% Y/Y to 1.1mln units.

European bourses are firmer across the board, initially on the hopes of a Russia-Ukraine energy ceasefire. US President Trump announced an energy ceasefire between the two sides; however, Axios later reported that Trump’s announcement was pre-emptive but expects both sides to agree to the ceasefire. To add, Ukrainian President Zelensky said Russia attacked Ukraine despite Trump’s announcement. Sectors highlight the positive bias. Banks top the sector pile, with Utilities and Insurance following closely behind. On the other hand, Media is the laggard, closely followed by Chemicals and Travel & Leisure. As the start of the Paris Motor Show gets underway today, the EU announced that China has agreed to limit imports of its hybrid vehicle to 350k/yr, with a 6% annual increase for the second year of application and will apply for four years. This follows the trade talks between the two sides last week, in which hybrid vehicle imports were in focus. European autos continue to benefit from last week’s announcement (Stellantis +2.5%, Volkswagen +1.1%). US equity futures are also firmer, with the Q3 earnings season set to get underway this week, starting with big US banks. For the sector as a whole, earnings are seen rising 3.0% Y/Y (vs 1.3% in Q2).

Top European News

• UK Chancellor Healey plans short-term Budget giveaways to limit fiscal pressure and is due to unveil further support for energy costs this winter when the Budget is announced later this month.
• UK Chancellor Healey ruled out lowering the mansion tax threshold to GBP 1.5mln.
• S&P affirmed the UK on Friday at AA; Outlook Stable.
• EU leaders will discuss a scaled-back budget at their meeting in Brussels in the week ahead, after Ireland presented a compromise plan for the next seven-year budget that would cut EUR 160bln from the European Commission's proposed EUR 2tln figure.
• Germany, and allies, have informed European Council President Costa that cohesion and agriculture funding will "definitely" need to be cut in the next budget draft, Politico reported citing sources.

FX

• G10s are broadly lower against the USD this morning. GBP leads vs peers, whilst the Swiss Franc is the underperformer. Focus has been on geopolitics, which has been on two fronts. Starting in the Middle East, the Houthis launched a deadly attack on an airport in Saudi’s capital, which could see the US enter on this front. Over in Russia-Ukraine, President Trump announced an “energy ceasefire”, which caught both Ukraine and Russia by surprise. Russia continued its strikes on Ukraine over the weekend. Speaking on the deal, President Zelensky said that he had found out about it through the media, though mentioned that he is ready to sign ceasefire guarantees. Russia has yet to respond.
• Given the aforementioned geopolitical updates, DXY is a touch firmer this morning, currently holding at the upper end of a 102.10 to 102.37 range. Aside from that, the docket is exceptionally thin, with newsflow also likely to remain light on account of Columbus Day. Attention for the week will remain solely on US CPI on Wednesday, which will be a key report heading into the October confab. Whilst money markets assign only a 20% chance of a hike this month, it could help strengthen tightening bets for later in the year.
• GBP is the slight outperformer this morning, ahead of PM Burnham’s speech today, where he is expected to speak on improving the UK’s relationship with the EU. Any progress to improving relations with the bloc could likely be seen as a positive for domestic growth, but will be clouded by what specifically the UK must cough up to strike a deal with the EU.
• The EUR is under mild pressure this morning, in continuation of the action seen last week (speculative net-short position hit its largest since 2020, via CFTC). Downside which was facilitated by ongoing French fiscal woes; the next point of friction will be on October 13th, when lawmakers will formally begin debate on the draft budget. The final vote is scheduled for 20th October.

Central Banks

• NBP's Wnorowski said they could raise the base rate at the November MPC meeting and awaiting updated staff projections.
• BoK Governor Shin affirmed inflation is seen remaining above target for some time and noted that chip strength is supporting faster than expected growth. Shin reiterated that timing and pace of further hikes will be data-dependent.

Fixed Income

• A firmer start to the week for fixed income, on account of the pressure seen in the energy space on steps towards an energy ceasefire between Russia and Ukraine, while in the Middle East Iran acknowledged that some of the seven points have been met, but not all.
• Action which leaves Bunds higher by about 20 ticks, off highs in 121.02 to 121.29 confines, with a pullback seen on recent energy gains. Energy aside, the bloc is focused on ongoing budget deliberations, with Politico reporting that Germany is to push for cuts to agriculture and cohesion, two of the most high-profile funding points.
• Elsewhere, we await the briefing by Chancellor Merz at 12:30BST, where he is expected to outline the changes CDU is making following the poor performance in September’s regional elections. Performance that significantly increased the scrutiny around and pressure on the Chancellor.
• Gilts opened higher by just under 30 ticks, broadly in line with the lead from peers at the time. Upside was a function of the discussed energy moves, and also increased commentary around EU-UK relations ahead of PM Burnham’s update to the House of Commons this afternoon. However, despite peaking at 84.17 with gains of 50 ticks, the benchmark has waned on a bounce in energy and on increased focus around the budget, as the fiscal task Chancellor Healey faces is significant.
• Finally, USTs spent the morning with modest gains but have now slipped to modest losses. In narrow c. 10 tick confines on account of the partial US holiday, which sees cash trade closed.

Commodities

• WTI Nov and Brent Dec futures were initially firmer early doors, supported by renewed Houthi attacks on Saudi Arabia and Trump's suggestion that the US could join Saudi strikes against Yemen. On diplomacy, Iran said the US had accepted some of Tehran's seven conditions, although the response remains insufficient, while exchanges continue through intermediaries. Nonetheless, Tehran reiterated that Hormuz will not reopen until its seven conditions are met, while warning of retaliation against any attack on Kharg Island. The complex reversed opening gains overnight amid Trump's announcement of a potential Russia-Ukraine energy ceasefire and a diesel deal with Moscow, with neither confirmed.
• Since then, prices have risen back into the green after Ukrainian President Zelensky suggested Russia had violated Trump's energy ceasefire. Thereafter, reports Saudi dealing with further strikes in the region, have kept benchmarks afloat.
• WTI currently holds at the upper end of a USD 89.61/bbl to USD 93.13/bbl range (vs Friday's USD 90.01-92.17/bbl range), while Brent sits at the upper end of a USD 102.33/bbl to 106.17/bbl range.
• Dutch TTF is firmer amid continued Middle Eastern supply concerns heading into colder weather in the Western Hemisphere, with TTF extending gains to a EUR 82.90/MWh high from EUR 80.63/MWh lows.
• Precious metals are softer, with spot gold pressured despite a slightly weaker DXY, as expectations of further Fed tightening remain a headwind, while diplomatic developments limit haven demand. Spot gold fell to a USD 4,168/oz low from USD 4,217/oz (vs Friday's USD 4,131-4,208/oz range), while spot silver has pared earlier gains, declining to USD 60.66/oz from USD 61.45/oz highs.
• Base metals are firmer, with copper extending Friday's rebound following the return of Chinese buyers after the National Day holiday. The complex also benefits from China's pledge for further policy support, although broader trade concerns remain. 3M LME copper trades towards the top end of a USD 14,554.55-14,660.00/t range.
• US President Trump said refiners and retailers need to begin dropping prices.
• US authorised an emergency exchange of up to 4mln barrels from the Strategic Petroleum Reserve to address storm-related disruptions.
• Saudi Arabia's Energy Minister signed three energy cooperation MoUs with Kuwait, Qatar and Egypt. It was separately reported that oil executives withdrew from the Riyadh energy congress following missile strikes on the airport. In further comments, the Saudi Energy Ministry said they expect that it will take 2-3 years to increase oil pipeline capacity to 10mln BPD.
• OPEC Secretary General said oil demand growth is expected at 400k BPD this year.
• BP (BP/ LN) is working to restart production at its Na Kika and Thunder Horse platforms in the Gulf of Mexico after shutting output due to Hurricane Isaias.
• IEA urged member countries to accelerate pledged diesel releases and consider supplying additional volumes as global markets tighten.
• Russia’s Deputy PM Novak said Russia has started lifting diesel export restrictions immediately, and that exports are set to increase further in November and December as refineries return to operation following maintenance, TASS reported. Novak added that Russia is ready to supply additional volumes of diesel fuel to the US market, as well as to all its partners, as early as October.
• Canadian PM Carney's office said Carney spoke with US President Trump and that Canada will maximise exports of oil and diesel to the US, with exports to the US yielding over 1mln bpd of diesel.
• China's Agricultural Ministry expects lower corn consumption in 2026-27, with corn consumption now seen at 306.9mln tonnes vs. 311.7mln tonnes in the previous forecast.

Trade/Tariffs

• China's NDRC vowed to step up countercyclical support and prepare additional high-impact policy tools as it seeks to achieve this year's economic goals.
• EU Commission Official said the EU has agreed to limit China hybrid imports to 350k/year, with a 6% annually for the second year of application and will apply for four years.

Geopolitics: Middle East

• US President Trump said he was considering whether the US should join Saudi strikes against Yemen's Houthis, following another attack on the Saudi capital's airport.
• US reportedly accepted some of Tehran’s seven conditions in a response conveyed via the Qatari intermediary, but Iran deems this insufficient, while it reaffirmed that the only way to reopen the Hormuz is to fulfil all seven conditions simultaneously and in a single stage, according to Iranian journalist Ghaderi. This was later confirmed by the Iranian Major General Rezaei.
• US military said it had disabled a commercial cargo vessel in the Gulf of Oman after the crew ignored warnings and attempted to breach the naval blockade against Iran.
• UKMTO announced that a tanker transiting outbound in the Strait of Hormuz was struck by an unidentified projectile, resulting in damage to the vessel.
• IRGC navy said a violating supertanker struck a sea mine in the southern Strait of Hormuz, which caused a fire and was the third tanker since Saturday to hit naval mines, while it warned that vessels disabling navigation and identification systems in the Strait of Hormuz will be treated as "hostile targets" and will face harsh, decisive action.
• Iranian Foreign Ministry spokesperson Baghaei said exchanges of messages with the US continue through intermediaries, while Tehran is still reviewing US positions and will respond via intermediaries once the review is complete.
• Iran's Supreme National Security Council Secretary Rezaei said Iran is fully prepared and will demonstrate new capabilities if war resumes, while he added that US assets in the UAE and around the Strait of Hormuz are highly valuable but have not been placed on Iran's target list to date. Furthermore, he warned that renewed conflict would see many regional undersea cables, data centres, AI facilities and other sites destroyed, assets he valued at more than USD 2tln.
• Iranian Deputy Foreign Minister Gharibabadi said Iran is in a state of war and that no commercial vessel may transit the Strait of Hormuz without prior coordination with Tehran, with the waterway a national security red line. Gharibabadi also stated that Iran is seeking to register with the IMO an agreement with Oman on transit routes, but noted that registration would not guarantee the strait’s reopening, while he added that reopening depends on the US fulfilling its prior commitments.
• Iranian MP Khezrian warned that any attack on Kharg Island will trigger a decisive response by Iran's armed forces at the source of the attack, adding that retaliation will not be limited to US bases, Defapress reported.
• Iranian Foreign Minister Araghchi held a call with Saudi Arabia's Foreign Minister bin Farhan and stressed that Iran is ready to provide any assistance to help start dialogue between Saudi Arabia and Yemen and to help achieve a political solution.
• Saudi Arabia said 12 people were killed and more than 300 injured in an attack targeting King Khalid Airport in Riyadh on Saturday, while the airport was attacked again on Sunday, which caused a fire, as well as killed one person and injured nearly a dozen. Furthermore, the Saudi Civil Aviation Authority also announced that the King Fahd International Airport in Dammam was attacked.
• Saudi Arabia, Turkey, Pakistan and Egypt issued a joint statement condemning continued attacks by Yemeni Houthis on Saudi Arabia, calling them a dangerous escalation and expressing support for Saudi measures to respond.

Geopolitics: Ukraine

• US President Trump claimed Russia and Ukraine agreed to an energy ceasefire with immediate effect. However, it was reported by Axios that a White House official said Trump's announcement of an energy ceasefire between Russia and Ukraine referred to a potential deal, which he expects Ukrainian President Zelensky to abide by, while the report added that Russia hasn't accepted any kind of ceasefire so far.
• US President Trump demanded that Ukrainian President Zelensky halt attacks on Russian oil refineries, saying he believes it is time for Ukraine to get a new president and that it needs a leader capable of reaching a deal with Russia. Furthermore, the US threatened to cut off intelligence sharing and block arms supplies to Ukraine, while Ukraine's negotiating team cut short its trip to the US after being blindsided by the announcement of the US-Russia diesel deal, although they had worked on a peace proposal that could be sent to Russia before winter, according to FT.
• US President Trump decided to pursue a diesel fuel deal with Russia after Ukrainian President Zelensky ignored half a dozen requests to stop attacking Russian oil refineries, according to a US official with direct knowledge cited by Axios.
• US envoys Witkoff and Kushner have not cancelled plans to visit Moscow but will arrive with a clear understanding of Kyiv's position, TASS sources reported.
• Ukrainian President Zelensky said that he was willing to halt strikes if Russia stopped targeting Ukrainian infrastructure, while he stated that Kyiv is awaiting details of US-Russia talks, but also noted that Russia hit a power plant, following US President Trump's energy ceasefire comment. In further comments, Zelensky said that Ukraine will respond if Russia does not agree to an energy ceasefire but stated that Ukraine is ready to sign ceasefire guarantees.
• Ukrainian President Zelensky said he will organise elections if Russia agrees to 60-day ceasefire.
• European Commission President von der Leyen said the EU will provide additional funding for drones and missiles after talks with Ukrainian President Zelensky, but didn't specify the amount, according to Kommersant. Later, the EU Foreign Representative Kallas said they have adopted over 1.5k Russian sanctions, targeting the missile-industrial complex.
• UK pledged to maintain pressure on Russia through its toughest sanctions regime following Trump's announcement of a deal to buy diesel from Moscow. Separately, UK PM Burnham said Russia interfered in the 2016 Brexit vote and called for European voters to be better informed about efforts to disrupt the democratic process, according to the FT.
• Western intelligence agencies warned Europe’s defence industry bosses that Russia is increasing efforts to assassinate them, prompting companies to increase personal security around their top executives, according to FT.
• Poland's Foreign Minister said NATO members should prepare a robust response for a possible deadly Russian “hybrid” attack amid increasing concerns about Moscow escalating its sabotage campaign on European soil, according to FT.

Geopolitics: Other

• North Korea launched two ballistic missiles that were believed to have already landed outside Japan's Exclusive Economic Zone, according to NTV.
• South Korean military spokesperson said North Korea's missiles appear to be a demonstration of its capabilities and a show of force in South Korea's hypersonic missile test fire, while the South Korean National Security Council convened an emergency meeting on North Korea's missile test.

Crypto

• Bitcoin rose to a peak of USD 84.26k before completely reversing earlier gains and now near the USD 83.3k mark.

US Event Calendar

• No US economic data scheduled; US cash bond market closed for Columbus Day (stock markets open)
• No Treasury auctions scheduled

Central Bank Speakers

• 12:10pm: Fed’s Hammack Speaks at NABE Conference

DB's Jim Reid concludes the overnight wrap

I have a new iPhone to play with today but for once its not my own. For the first time in recorded history my wife will have a superior model to mine as for her birthday today I have upgraded her but have decided for now to hold fire on my upgrade! It will be totally wasted on her as she is to technology what I am to artistic swimming. If it weren't for the camera option she'd be content with an old Nokia 3310, and not even know snake was on there or have any interest in it if she knew!

This week's game of snake will involve navigating the latest complex geopolitical news and the US inflation data, with September CPI on Wednesday and PPI on Thursday, the final readings before the Fed's October 28 meeting, alongside a broader US activity pulse from retail sales (Thursday) and industrial production (Friday). After Columbus Day today where US bond markets will be closed but equities open, Q3 US earnings season also gets properly under way tomorrow, led by the big US banks, while across the globe ASML (Wednesday) and TSMC (Thursday) should provide another useful read on the AI capex cycle. Elsewhere, China has September inflation and trade data on Wednesday, UK monthly GDP is due Thursday, and the IMF/World Bank meetings run through the week, with the IMF's latest World Economic Outlook out tomorrow and a long list of central-bank speakers.

The big geopolitical/energy story over the weekend is the continued complexity of the Middle East and Russia/Ukraine conflicts. Trump announced yesterday that Russia and Ukraine had agreed to an immediate "energy ceasefire", but overnight developments underline how fragile that claim is. Zelenskyy said Ukraine supports a ceasefire if Russia does too and is awaiting details from Washington, while Moscow had still not publicly confirmed it. Zelenskyy also said Russia subsequently struck a thermal power plant in Kharkiv and other Ukrainian energy infrastructure. So for now this looks more like an untested US proposal than a functioning ceasefire, particularly after a similar arrangement last month failed to endure.

The proposed ceasefire is closely linked to the extraordinary US pivot on Russian diesel. Ukrainian refinery strikes had forced Moscow to restrict fuel exports, tightening an already constrained products market. Trump's deal with Putin would allow around 13.5 million barrels of Russian diesel back into global markets this month via a temporary US sanctions waiver, potentially including the first US imports since March 2022. Zelenskyy has criticised the move, while Reuters reported that Washington threatened to cut intelligence sharing and weapons procurement support unless Kyiv halted refinery strikes. Russian barrels returning would be bearish for diesel cracks, but the overnight strikes make the ceasefire increasingly uncertain and highlight strains between Washington and Kyiv.

Meanwhile, Middle East energy risk has moved sharply in the other direction. Riyadh's King Khalid International Airport was hit again on Sunday after repeated attacks over the past week. Saudi Arabia said the latest strike killed one person and injured 11, after Saturday's attack killed 12 and wounded more than 300. The escalation comes as Saudi-backed Yemeni government forces counter recent Houthi gains near Bab el-Mandeb, the crucial Red Sea shipping chokepoint. Repeated strikes disrupting flights in Riyadh also underline how difficult the Houthi threat may be for Saudi Arabia to suppress.

That leaves a meaningful risk of wider regional escalation. Saudi Arabia has intensified air strikes in Yemen, while Trump said the US "may" join strikes against the Houthis after an American was among those killed on Saturday. Overnight, Iran denied directing the Houthis and its foreign minister urged diplomacy with Saudi Arabia, but there is little sign yet of de-escalation. Washington has so far limited support to intelligence sharing while Riyadh seeks more direct US help and air-defence support. So even if a Russia/Ukraine ceasefire and Russian diesel waiver ease pressure on refined products, attacks on Riyadh and fighting around Bab el-Mandeb leave an upside tail risk for oil and shipping costs, alongside continuing Strait of Hormuz disruption.

With all of that newsflow, this morning Brent is -1.32% at $102.34/bbl with other markets quiet given that Japan's cash equity markets are closed and US bond markets are going to be shut for the holiday. The KOSPI (-2.68%) is the weakest performer as trading resumes following a prolonged holiday weekend. Chinese equities are also under modest pressure, with the CSI 300 (-0.15%) and Shanghai Composite (-0.12%) edging lower. In contrast, the S&P/ASX 200 (+0.78%) is leading gains across the region, while the Hang Seng (+0.12%) is slightly higher. S&P 500 (+0.33%), Nasdaq 100 (+0.44%) and Stoxx (+0.61%) futures are all higher.

Going onto more detail on the week ahead, the main event is US CPI on Wednesday. Our economists expect headline CPI to rise +0.57% MoM in September, up from +0.40% in August, largely because seasonally adjusted motor-fuel prices are expected to jump 9.6%. That would lift headline inflation to around 3.64% YoY. The core picture should be much softer: our economists expect +0.16% MoM, down from +0.29%, taking the annual rate down a couple of basis points to 2.39%. Within core, they expect goods prices to be unchanged, with lower used-car and medical-care commodity prices offset by firmer recreation and IT goods. On services, last month's jump in wireless prices should roll off, although higher jet-fuel costs should support airfares. The contrast between a fuel-driven headline acceleration and a softer underlying core print will clearly be important for the Fed, particularly given recent messaging that further tightening may be needed but is not urgent.

The inflation story does not end there. PPI follows on Thursday and import prices on Friday, both important for mapping the CPI details into core PCE. These are the last inflation data Fed officials will see before the October FOMC meeting. Our economists' ex-ante estimate is for core PCE (released on October 29th, the day after the FOMC) to rise around +0.21% MoM, leaving the annual rate roughly steady at 3.0%. If they are close to our economists' forecasts, the team thinks the Fed can remain on hold on October 28 and wait for more information before December. Chair Warsh's fireside chat with IMF Managing Director Georgieva on Thursday evening will therefore be particularly interesting, as it is the final Fed appearance before the communications blackout. On activity, our economists expect total September retail sales to be unchanged (Thursday) and industrial production to rise +0.2% MoM (Friday). The Fed's Beige Book is also out Wednesday. Today is Columbus Day, so US bond markets are closed although equities remain open.

Earnings season is another important part of the week. JPMorgan, Goldman Sachs, Wells Fargo and Citigroup report tomorrow, followed by Bank of America, Morgan Stanley and BlackRock on Wednesday. ASML reports Wednesday and TSMC on Thursday. Our US equity strategists expect S&P 500 earnings growth to remain at a record 34% YoY in Q3, versus consensus at 27%. Their view is that consensus is again embedding too much of a slowdown, leaving scope for another quarter of above-average beats. See their piece here. In Europe, our equity strategists expect earnings growth to reach 25% in Q3, 5 pp above consensus (their full preview is here). So it should be a very strong earnings season on both sides of the Atlantic and indeed across the globe.

Recapping last week now and markets seemed to be on high alert throughout, but ultimately put in a decent performance as the financial stress around the Eurozone began to moderate, albeit not in a straight line. For instance, the Franco-German 2yr spread came down -14.6bps to 52bps. Moreover, the 10yr spread also tightened -3.7bps over the week to 137bps. That went alongside stabilisation for global bonds more broadly after the relentless selloff of recent weeks. For instance, the 10yr Treasury yield fell -3.3bps on the week to 5.24% (+1.2bps Friday), although it did hit its highest intraday level since 2002 on Wednesday, at 5.36%. However, the 10yr bund yield still edged +1.9bps higher on the week to 3.48%.

That backdrop helped global equities recover in aggregate, though the performance was varied on the two sides of the Atlantic. In the US, we even saw the S&P 500 hit another record on Wednesday, with a weekly gain of +1.15% (+0.59% Friday). Over in Europe by contrast, the STOXX 600 was little changed (+0.03%) on the week despite a +0.97% recovery on Friday. And there were some continued points of stress, with France's CAC 40 down 1.19% (+0.95% Friday), marking its 8th weekly decline in the last 9. Meanwhile, European banks also fell back, with the STOXX Banks index down -2.46% (+0.51% Friday).

As all that was happening, the lack of any clear progress between the US and Iran kept oil prices elevated. So Brent crude ended the week up +2.42% (+0.42% Friday) at $104.72/bbl, whilst European natural gas rose by +8.93% to €81.40/MWh, its highest weekly close since 2022. That went alongside gains for other commodities, including gold, which rose +1.28% last week, and copper, which rose +2.18%.

Tyler Durden Mon, 10/12/2026 - 08:32

Netflix Reportedly Readies First Major Layoffs Since 2022, Cutting 5% Of Staff With Shares Down 42% In A Year

Continued wokeness does not seem to be working out well for Netflix, which is planning to cut about 5% of its workforce, with an announcement expected as early as next week, Puck News reported Friday, citing people familiar with the matter.

The company had about 16,000 full-time employees at the end of last year, so a 5% cut would mean roughly 800 jobs. It is not yet clear which departments would be hit, TheWrap reported. Netflix's last major round of layoffs came in 2022, when it cut hundreds of jobs amid slowing growth and subscriber losses, per Reuters; it also laid off a small number of product team employees in February, TheWrap noted.

The reported cuts follow a rough stretch for the stock. Shares were trading at $70.96 Friday morning, down 42% over the past year, 22% year to date and 30% over six months, according to TheWrap.

Last month, HSBC and Wells Fargo both downgraded Netflix over engagement - with HSBC's Mohammed Khallouf moving the stock to Hold from Buy and cut his price target to $76 from $96, citing YouTube's growing living-room presence and Netflix's falling share of U.S. TV time. Wells Fargo's Steve Cahall cut his rating to Underweight from Equal Weight and his target to $57 from $80, citing "worrying" engagement trends.

Nielsen's July Gauge put Netflix at 7.8% of U.S. TV viewing against YouTube's 14.2%, TheWrap said. Reuters said the company is navigating a more competitive streaming market as media companies consolidate and YouTube takes a growing share of viewership and advertising spending.

Netflix has been pushing beyond subscriptions into advertising, live programming and gaming. Co-CEO Ted Sarandos said at Bloomberg's Screentime conference that Netflix is "not growing as fast as I want us to." The company agreed in December to an $83 billion deal for Warner Bros. Discovery's studio and streaming assets but dropped out after declining to match Paramount Skydance's $110 billion offer, a deal Paramount closed Tuesday, according to TheWrap.

Tyler Durden Mon, 10/12/2026 - 08:30

US Bankruptcy Filings Rise By 11% In First 9 Months Of 2026

Authored by Naveen Athrappully via The Epoch Times,

A total of 469,719 bankruptcy filings, both individual and commercial, have been filed in the first nine months of 2026.

The total number of filings is up by 11 percent from the same period last year, the American Bankruptcy Institute (ABI) said in an Oct. 8 statement.

Individuals made 444,252 filings in the January to September period, while businesses made 25,467 filings, up by 7 percent.

"The continued increase in bankruptcy filings reflects the strain of higher borrowing costs, rising household expenses, growing consumer delinquencies, and a softer job market," Michael Hunter, vice president of bankruptcy data provider Epiq AACER, said in the statement.

Regarding consumer borrowing costs, the average weekly rate on a 30-year fixed-rate mortgage is at the highest level in roughly three years. The credit card interest rate has been above 20 percent for more than three years.

Joelle Scally, economic policy adviser at the New York Federal Reserve, said in an Aug. 11 statement from the bank that new consumer delinquencies for credit cards and auto loans "remain at elevated levels."

As for the job market, the United States added fewer jobs than expected in September.

There were 2,442 small business Subchapter V bankruptcy filings in the first nine months of the year, up by 46 percent from the same period in 2025, according to the ABI.

"The increase in bankruptcy filings, especially among small businesses, highlights the challenges many debtors continue to face amid persistent inflationary pressures, elevated borrowing costs, and economic uncertainty," Amy Quackenboss, ABI executive director, said in the statement.

Since the U.S.-Iran war broke out in late February, the 12-month inflation has remained elevated. The rate peaked at 4.2 percent in May and has since fallen to 3.4 percent in August, but it remains above the 2.4 percent rate recorded in February, according to data from the Bureau of Labor Statistics.

Quackenboss said that Congress's passage of the Bankruptcy Threshold Adjustment Act would expand "access for struggling businesses and families seeking bankruptcy relief."

The measure seeks to raise the small-business Chapter 11 Subchapter V bankruptcy debt threshold to $7.5 million from $3.4 million. It also seeks to increase the debt limit for individuals under Chapter 13 bankruptcy to $2.75 million from roughly $2.1 million. The bill has been passed by both the House and the Senate.

Large Commercial Bankruptcies

According to an Oct. 8 statement from the consulting firm Cornerstone Research, 100 large companies filed for bankruptcy between July 2025 and June 2026. This is 22 percent above the 2005-2025 historical average, according to a company report.

In the past 12 months, there were 28 bankruptcy filings with reported assets exceeding $1 billion.

"The continued elevated pace of large corporate bankruptcies reflects persistent challenges of the broader economic environment for companies that rely on debt financing," Matt Osborn, principal at Cornerstone Research and report coauthor, said in the statement.

"The data suggest that high interest rates and regulatory uncertainty, along with shifting demand and competitive dynamics within certain sectors such as manufacturing, remain the most frequently cited drivers of distress among large bankruptcy filers," Osborn said.

Certain recent business data suggest positive developments in the economy. For instance, the growth in U.S. business activity accelerated for the fourth straight month in September, according to a Sept. 23 report from S&P Global.

In the manufacturing sector, new order inflows hit their highest level since April 2022, according to the report.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said that business activity grew at the fastest rate in more than five years in September.

"To put the growth surge in context, barring the spike in demand following the opening up of the economy after the COVID-19 lockdowns, the latest improvement in business activity is the greatest recorded since early 2015," Williamson said.

"Business is clearly booming now in both manufacturing and services."

Tyler Durden Mon, 10/12/2026 - 08:15

EU NatGas Nears Mutli-Year Highs Even As Citi Sees Supply Crunch Easing

Europe's main natural gas price benchmark is headed for multi-year highs despite the "energy ceasefire" reported between Russia and Ukraine over the weekend and improving Strait of Hormuz energy flows. Europe is heading into the Northern Hemisphere winter without Qatari LNG exports and with storage levels well below 15-year lows.

Dutch TTF futures trade around 83 euros per megawatt-hour, the highest level since early 2023. The September pullback to around 70 euros per megawatt-hour was short-lived.

"Even without Qatari LNG exports, Europe is injecting gas into storage at a faster-than-expected pace. European storage is over 73% full, despite earlier expectations of not getting to 70% before winter starts," Citi analyst Maggie Xueting Lin wrote in a note.

However, EU gas storage levels are still well below seasonal norms. The 15-year average sits around 90%.

In late August, when Dutch TTF futures traded around 67 euros per megawatt-hour, Goldman commodities expert Samantha Dart said prices would need to rise near 100 euros "to discourage Asia LNG demand, thereby freeing incremental cargoes to be sent to Europe to help manage European gas storage levels."

Citi's Lin identified three factors easing Europe's NatGas balance ahead of winter: industrial demand destruction, warm weather, and an unexpected shift in Ukraine's role from net importer to net exporter:

• Industrial gas demand fell about 8% year over year in September and remained nearly 30% below pre-2022 levels in Citi's six-country sample.
• The weakness persists after adjusting for warm weather. Citi sees evidence of additional price-driven demand curtailment, challenging the assumption that most available cuts had already occurred after the 2022 energy crisis.
• Storage reached 73.1% on Oct. 7, exceeding earlier expectations that Europe might fail to reach 70% before winter. September injections were the strongest for that month since 2022.
• Ukraine is providing unexpected relief. A shift from importing European gas to potentially re-exporting as much as 1 billion cubic meters this winter could loosen Europe's winter balance by 4.5 billion cubic meters versus last year.

Lin is bearish on EU NatGas prices, maintaining a fourth-quarter TTF base case forecast of 56 euros. She believes industrial demand destruction is easing the NatGas shortage amid continued disruptions to Qatari LNG exports.

Tyler Durden Mon, 10/12/2026 - 08:00

Chinese Lithium Futs Plunge As EU Hybrid Cap Deals Fresh Blow To Battery Demand

Lithium futures in China plunged on Monday after a Bloomberg report said the European Union will cap imports of Chinese hybrid vehicles at 350,000 per year, with the "safeguard measure" set to take effect in the coming weeks.

Under a four-year safeguard measure that could take effect Dec. 1, the bloc will limit Chinese hybrid imports to 350,000 vehicles in the first year, according to the report. The quota would increase by 6% annually from the second year, while the broader safeguard would cover other suppliers to comply with World Trade Organization rules.

In the note titled "EU Caps Chinese Hybrids At 350,000 As Deutsche Maps Every Trade Weapon Left In Europe's Arsenal," we outlined that EU imports of Chinese hybrids would be roughly 45% below this year's run rate of 650,000 vehicles.

The immediate market response to this new development was a 10% drop in the most-active lithium contract on the Guangzhou Futures Exchange, which closed at 104,740 yuan ($15,649) a ton.

Lithium prices have slumped in the back half of the year as the industry faces mounting pressure from weaker demand for electric vehicles and energy-storage systems.

For context, in October 2024, when the EV tariffs pushed Beijing into hybrids, Europe imported about 3,800 Chinese hybrids a month, per FT data, or roughly 46,000 a year. By year four, the cap grows to about 417,000. In other words, Brussels initially caps the flood of cheap Chinese hybrids at about eight times the October 2024 annualized import level, keeping pressure on European auto companies already grappling with sliding shares and weaker earnings.

The EU-China agreement could help avert a broader trade war and, most importantly, keep Beijing from cutting off rare earth exports, as it has done for certain metals to the US.

Back to lithium markets, Goldman analysts recently forecast that Chinese and global lithium markets would shift from deficits to near-balance in the fourth quarter, then into surpluses over the next two years. The analysts pointed to slower underlying growth in EVs and energy storage, alongside reduced inventory-building needs.

Tyler Durden Mon, 10/12/2026 - 07:20

Trump Declares Ukraine Energy Ceasefire; Zelensky Says "News To Me" As Russia Attacks Powerplant

US relations with Ukraine are once again spiraling fast, especially following President Trump's 'shock' declaration Saturday while addressing Zelensky's anger at the diesel deal with Russia, "I suggest they get a new leader who can make a deal… And I think it's time for Ukraine to get a new president."

The rebuke had been in response to Zelensky blasting the diesel arrangement as "not fair and not honest" and a "sign of weakness" by Trump, and a "birthday gift" to Putin.

And then on Sunday morning, again to the great surprise of Western allies, Trump announced on social media a new energy ceasefire between Ukraine and Russia - except that Kiev quickly said it knows of no such ceasesfire.

"Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine," Trump wrote on Truth Social. "Both parties have agreed. Do not break it!"

More reported blackouts in Kiev Sunday evening, via AFP.

The last such energy ceasefire attempt announced by Trump was in mid-September, but it didn't hold and in fact collapsed rather quickly after. In reality it never so much as got off the ground, before both sides were back at hammering each other's oil, gas, and electricity infrastructure.

Very soon after this latest announcement by Trump on Sunday, Zelensky told US media that it was "news to me". He said to Axios while reacting to Trump's Truth Social post: "If President Trump negotiated it with Putin, please tell us when the ceasefire begins. We are ready, and we will accept it."

And yet the dilemma for Kiev remains: it is vehemently against a US-Russian diesel deal, but any pause in energy attacks would serve to protect that very deal.

This unusual and very public back-and-forth is happening as the Ukrainian capital has been plunged into darkness:

BLACKOUT leaves parts of Kiev in total darkness Mayor’s urged people to LEAVE city 'temporarily' as capital forced into 'survival mode' https://t.co/nAq2f7CKLp

— RTVisual (@RT_Visual_on_X) October 11, 2026

Zelensky has in follow-up said on X that he was "awaiting details from the American side" - and has also complained that Russia has continued hitting Ukraine's energy sites on Sunday. According to more of the latest from Zelensky:

Volodymyr Zelensky has accused Russia of striking a power plant in Kyiv after Donald Trump announced an "energy ceasefire".

The Ukrainian president says in a post on X that he has briefed Trump on the "brutal Russian strikes that continue unabated". He says earlier "the Russians struck a power plant in Kyiv with a 'shahed' drone, and many districts experienced power outages".

"Later, there were strikes on energy facilities in the Kharkiv region. And all of this happened AFTER the President of the United States made his statement about an energy ceasefire," he says.

His fresh video address:

Today, there was a statement from the President of the United States that an energy ceasefire has been secured. This is good news for everyone – and it is important that it become reality. Unfortunately, Ukrainian skies have been infested with Russian “shaheds” all day today. There have been glide bomb strikes and strikes on our energy infrastructure too. A power plant in Kharkiv was attacked this evening. Overall, this past week alone, the Russians have carried out more than 200 strikes on our electricity generation and transmission facilities in Ukraine, and another 17 strikes this week targeted gas and oil facilities. They have killed more than 150 of our people, and more than 700 people have been wounded. Ukraine has proposed many de-escalatory steps. Putin had one answer to all of them – “nyet.” We do hope that he will finally say something to America, Ukraine, and the entire world that will lead to a real and dignified peace. Ukraine wants peace. The question is whether Russia does. The Armed Forces of Ukraine have received all the appropriate orders. We are awaiting clear details of the dialogue between America and Russia – and we expect Putin to follow through on what President Trump said.

— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) October 11, 2026

Meanwhile Washington still has considerable leverage over Ukraine, putting Zelensky between a rock and a hard place. The Trump White House can always block weapons and funds - something it has previously threatened to do but never pulled the trigger on.

Fresh reporting in Financial Times is already putting specifics on the table to be potentially revoked:

SCOOP @FT: The Trump administration is threatening to stop the PURL procurement system that provides Ukraine with weapons in order to press Kyiv to halt its deep strikes on Russian energy infrastructure, according to officials in Europe. The officials, who received calls from American officials on Saturday and Sunday or were briefed on them, said the US was lobbying European capitals and Kyiv in an attempt to end the attacks on Russian oil refineries. The White House declined to confirm or comment on the calls. w/ @HenryJFoy @ahauslohner https://t.co/0dwv7GovPf

— Christopher Miller (@ChristopherJM) October 11, 2026

American diplomats are said to be currently lobbying ⁠European capitals to pressure Ukraine end ​the attacks on Russian oil refineries:

The message from the ​US included threats to cut off intelligence sharing ​and Purl (the Prioritised Ukraine Requirements List) mechanism for procuring US weapons ‌for ⁠Ukraine, the report added.

One official who was given a message from a Pentagon official stated: "They are calling Kyiv . ... They are calling everyone [in Europe]" in order to lean on them.

* * *

Tyler Durden Mon, 10/12/2026 - 07:01

Crypto Wallet-Maker Ledger Confirms Unauthorized Hardware Implant, Says Losses May Exceed $86M

Authored by Michael Millard via CoinTelegraph.com,

Hardware wallet maker Ledger, which has been investigating reports of crypto losses involving its devices purchased from a Southeast Asian reseller, confirmed that one of the affected users' devices contained an unauthorized hardware implant.

Ledger said in a Saturday post on X that it was contacting users as part of its ongoing investigation into the losses, which investigator Specter estimated may exceed $86 million across Bitcoin, Ethereum and Tron.

Ledger asked that individuals who have information regarding the investigation to contact its bounty program at bounty@ledger.fr.

As a measure of precaution, reseller CryptoBilis confirmed in the post that it had ceased sales of all hardware wallet inventory until the investigation is concluded. Ledger said it is in active communication with CryptoBilis on next steps.

Ledger recommends users who purchased one of their devices from this reseller to not initiate set-up if they have not yet done so.

If they have set up their Ledger device, they should consider moving assets to a new Ledger signer, including using a new seed.

Cointelegraph reported on Friday that CryptoBilis was listed as an authorized Ledger reseller in Indonesia, Malaysia and the Philippines.

JUST IN: UP CLOSE VIDEO SHOWS HOW HACKERS STOLE OVER $80,000,000 SILENTLY CORRUPTING LEDGER #BITCOIN WALLETS A SCAM SHOP IN MALAYSIA WAS LISTED AS AN "OFFICIAL AUTHORIZED RESELLER FOR YEARS" BEHIND THE SCENES, CRIMINALS WERE INSERTING MICROSCOPIC SPY CHIPS ON EVERY WALLET THEY REPACKAGED THE DEVICE AND SHIPPED IT TO UNSUSPECTING VICTIMS ALL THE WHILE IT WAS SILENTLY CAPTURING THEIR PRIVATE KEYS THIS IS WILD ‼️

— The Bitcoin Historian (@pete_rizzo_) October 11, 2026

Ledger has not confirmed how many customers may be affected or the value of the reported losses.

In a statement to Cointelegraph, Ledger said the incident appeared to be isolated to the single reseller and its market.

"Ledger's infrastructure, systems and services were not compromised," the company said, adding that its investigation remained ongoing.

For assistance or questions, contact Ledger customer support through official channels at http://support.ledger.com.

Tyler Durden Mon, 10/12/2026 - 06:55

UBS Identifies "The Next Leg Of The AI Trade"

Catherine Gordon, UBS's energy and resources expert, highlighted "AI Infrastructure Constraints Emerge As Next Leg Of The Trade" in a Friday note to clients. The theme closely aligns with our "Owning The Bottlenecks" note, which centered on companies positioned to benefit from supply constraints in the critical materials space that feed not only the AI infrastructure buildout but also the rearmament supercycle.

Gordon's note outlined that traders are shifting their focus to the power, data-center capacity, and financing needed to sustain the artificial intelligence buildout, as infrastructure constraints emerge as a potential driver of the next leg of the trade.

Gordon explained:

The AI narrative is increasingly shifting from model development toward the infrastructure needed to support demand, with investors focusing on whether enough power, data center capacity and financing can be deployed to sustain the buildout over the coming years.

While questions around OpenAI revenue estimates briefly introduced some uncertainty into the AI trade, the broader market takeaway remains intact: demand is not the primary concern. Instead, attention is gravitating toward the supply side of the equation, particularly power availability, which is emerging as a critical constraint. Recent long-term power purchase agreements by Alphabet and Amazon have reinforced that theme and helped keep infrastructure names at the center of the discussion.

Sentiment across the AI complex remains somewhat fragile amid ongoing debates around capex sustainability and infrastructure funding, but industry feedback continues to point to a constructive demand backdrop.

Conversations at Data Center World Expo in Singapore were largely focused on the ability of the supply chain to ramp capacity quickly enough rather than any meaningful deterioration in end demand, reinforcing the view that execution and infrastructure deployment are becoming the key variables for the next phase of the AI trade.

Gordon's view of the shifting AI trade, focusing on the building blocks that make the AI data-center buildout possible, aligns with a theme we laid out in late September: "owning the bottlenecks."

We recently noted that the Trump administration is accelerating efforts to rebuild conflict-free supply chains and reduce dependence on China for critical materials. The point here is to own the producers outside China that can deliver conflict-free critical materials today to supply power grids, reindustrialization, data centers, and the rearmament cycle, such as rare earths and industrial metals, including tungsten. 

EU going critical-minerals maxxing Full list: 1. 3ECYCLE [copper] 2. 9PV-up: Upcycling raw materials from end-of-life photovoltaic panels [bauxite/alumina/aluminium, copper, silicon metal] 3. ALE - Altmark Lithium Extraction [lithium (battery grade)] 4. Alkeemia PureGraph [graphite (battery grade)] 5. BORRALHA MINING PROJECT [tungsten] 6. BREES (Best Rare Earth Element Separation) [rare earth elements for permanent magnets] 7. Cobre San Rafael Project [copper] 8. CoNiKo - Cobalt and Nickel refining in Kokkola [cobalt, nickel (battery grade)] 9. CRM4Defence – Byproducts and Recycling of CRM for Defence [bauxite/alumina/aluminium, magnesium metal, titanium metal] 10. CUPIDON [copper] 11. Development and extraction of the Retków-Grodziszcze Deposit in KGHM Polska Miedź S.A. [copper] 12. EMME [cobalt, nickel (battery grade)] 13. Enabling CRM production in Europe by recovering CRM from end-of-life batteries: A scalable battery black mass refining process that extracts critical raw materials from all types of Li-ion batteries in an environmental friendly way [cobalt, manganese (battery grade), graphite (battery grade), lithium (battery grade), nickel (battery grade)] 14. Establishment of electric battery recycling capacity, Racari city, Dambovita county [cobalt, lithium (battery grade), manganese (battery grade), graphite (battery grade), nickel (battery grade)] 15. ETEOCLES - Developing a recycling hub for low quality copper scrap [copper] 16. EU APT Tungsten Plant [tungsten] 17. EU BEST STRAT: Battery Economical Sustainable (Recycling-) Technology [bauxite/alumina/aluminium, copper, cobalt, lithium (battery grade), manganese (battery grade), graphite (battery grade), nickel (battery grade)] 18. European Lithium Refining and Recycling Hub Bitterfeld: from primary raw materials via recycling to critical solid state battery components [lithium (battery grade)] 19. GaRefine - Gallium Recycling & Refining for Europe [gallium] 20. Hautalampi Cobalt-Nickel-Copper Mine Project [copper, cobalt, nickel (battery grade)] 21. HyProMag GmbH [rare earth elements for permanent magnets] 22. Integrated Recycling Smelter [copper, nickel (battery grade)] 23. Lithium de France [lithium (battery grade)] 24. LUERN [titanium metal] 25. Myne Circular Metals Harderwijk [bauxite/alumina/aluminium, copper] 26. NEOMAT-PCAM [cobalt, manganese (battery grade), nickel (battery grade)] 27. NEW ALUMINIUM RECYCLING HUB IN GREECE [bauxite/alumina/aluminium] 28. OREON (Optimal REcycling Of Nickel) [copper, cobalt, nickel (battery grade), platinum group metals] 29. Production of Primary Aluminium and Product Diversification in Slovalco, a.s. [bauxite/alumina/aluminium] 30. Project Arctial [bauxite/alumina/aluminium] 31. Pure Battery Technologies pCAM plant Europe [cobalt, manganese (battery grade), nickel (battery grade)] 32. Refinis recycling plant (UAB Refinis) [platinum group metals] 33. ReSuPLIR - Recovery and Supply of Platinum, Iridium and Ruthenium [platinum group metals] 34. REW-ITA green HUB: Recovery of Wolfram: Italian Technology Advanced green Hub [copper, cobalt, tungsten] 35. Second TBRC Lünen [copper] 36. Silmet 2.0 [rare earth elements for permanent magnets] 37. Skouries Project [copper] 38. Sokli [rare earth elements for permanent magnets] 39. Suhanko project [copper, nickel (battery grade), platinum group metals] 40. Tankhouse Expansion Pirdop [copper] 41. Titanium alloys made in Europe [titanium metal] 42. Urban mining [bauxite/alumina/aluminium, copper, germanium, platinum group metals] 43. Urban Mining Factory - Printed Circuit Boards [bauxite/alumina/aluminium, copper, nickel (battery grade)] 44. Verde Magnesium Industries [magnesium metal] 45. Viscaria Copper Project [copper] 46. Zinnwald Lithium Project [lithium (battery grade)]

— Teo (@Teo_Sinamin) October 10, 2026

This comes as resource nationalism, sparked by China, shows no signs of stopping anytime soon.

Tyler Durden Mon, 10/12/2026 - 05:45

Europe And Russia Flirt With Nuclear War

Authored by J.B. Shurk via American Thinker,

There is no shame in armistice when the alternative is Armageddon...

War is ugly and awful. People who experience it generally detest it. In movies, soaring soundtracks make falling buildings and gunfights seem exciting. In real life, people feel excruciating physical and emotional pains that never really fade. It's Hell on Earth.

After WWI, nations around the world celebrated Armistice Day on November 11, which later became known as Remembrance Day in many countries. Remembering the dead was only half of the holiday's purpose; it was equally important for the survivors of the Great War to remember the costs of total war, so that mankind would never unleash such cataclysm again.

We did not sufficiently remember the costs of global war, and twenty years later, humanity endured a Second World War far more deadly than the First. After WWII, there was a movement in the United States to honor all veterans - both living and dead - on Armistice Day. President Eisenhower signed into law a bill renaming Armistice Day as Veterans Day, and we Americans have observed the holiday ever since.

We should honor our military veterans every day. By forgetting about Armistice Day, though, we stopped remembering the horrors of war. November 11 was once a day for survivors to say, "Never again." It transformed into a holiday that celebrates heroes and sacrifice, while often burying the most important warning from past generations to the present: Do not repeat our folly.

War is tragedy, not entertainment. Although I wish that we humans had longer memories when it comes to the psychological toll of mass killing, we barely know peace for half-a-generation before descending into Hell once again.

Wars between belligerents who see no alternative to either victory or death are cruel, bloody affairs.

Despite historical revisionism that often casts the use of nuclear weapons on Hiroshima and Nagasaki as indefensible, the enormous loss of American marines, sailors, and soldiers on scattered Pacific islands proved that the Japanese would continue fighting to the last man before entertaining any notion of surrender. Both the Balkan Wars before WWI and the Yugoslav Wars following the Cold War were marked by ethnic cleansing, rape, and mass murder. Every Islamic war against Israel seeks the Jewish state's eradication; therefore, every war Israel fights is life or death for the nation.

The war in Ukraine has taken on a similar zero-sum seriousness. Ukraine's wartime president, Volodymyr Zelenskyy, has repeatedly insisted that there can be no peace until all formerly Ukrainian territory now claimed by the Russian Federation - including Crimea, which Russia has controlled since 2014 - is returned to Ukraine. Russian President Vladimir Putin has said this demand is an impossibility.

Ukraine desires membership in the European Union and the U.S.-led North Atlantic Treaty Organization; Russia went to war in Ukraine, in part, to keep NATO's thirty-year encroachment from reaching the entirety of its western borders.

Ukraine and European members of NATO have described the war as an existential threat to all of Europe. Russian politicians, academics, and pundits similarly describe the war as an existential threat to Russia's future survival.

Both sides seek what the other refuses to give. A dangerous stalemate now exists.

Although accurate numbers are difficult to obtain, both Russia and Ukraine claim to have inflicted hundreds of thousands of casualties upon the other. Millions of Ukrainians have been displaced, and Russia's border regions have endured sustained attacks.

Ukrainian authorities continue to press-gang young men into military service. European Union countries that welcomed hundreds of thousands of fleeing Ukrainians back in 2022 are beginning to insist that young Ukrainian men be sent back home to fight. European and American politicians have suggested that Ukraine's legal age for conscription should be lowered and that Ukrainian women should be forced into combat, too. Martial-law-President Zelenskyy has admitted that his country is struggling to replenish lost troops.

In Russia, there is less concern about fielding troops for what the government calls its "special military operation" in Ukraine. There is widespread concern, however, that the military will have considerable difficulty defending the country effectively should E.U.-NATO expand the conflict beyond Ukraine - especially if Russia is forced to defend its Kaliningrad exclave situated between Lithuania and Poland.

European politicians and military personnel have argued that taking Kaliningrad would effectively cut Russia off from the Baltic Sea and tighten the noose of a cordon sanitaire formed around Russia's European flank. Although the largest country in the world by territory, Russia's moderate population of one-hundred-fifty-million puts it at a disadvantage against a European population three times its size.

With real troop losses and the threat of future troop losses weighing heavily on the minds of decision-makers in Europe and Russia, what once was unthinkable has become more openly discussed: the use of nuclear weapons on the continent. For eighty years, the taboo against atomic warfare has been so great that the United States and the Soviet Union fought a half-century Cold War in the shadows in an effort to avoid direct confrontation. However, as Russia, Ukraine, and E.U.-NATO struggle for leverage and deterrence, the likelihood of nuclear conflict is growing.

Despite the fact that Ukraine is not a part of NATO, military representatives from all of NATO's thirty-two members gathered in Kyiv this week. Admiral Giuseppe Cavo Dragone, the chair of the NATO Military Committee, announced, "We are here in full strength with a clear message: The bond between NATO and Ukraine is stronger and stronger."

On Tuesday, the French military test-fired a submarine-launched ballistic missile over the Atlantic. President Emmanuel Macron was present for the test and described it as "a new demonstration of the credibility of our deterrence" and "a clear message ... for wherever it must be received."

Kremlin spokesman Dmitry Peskov agreed that France's missile launch was a "loud and clear message." Peskov then warned: "Against the backdrop of such aggressive actions and such plans, Russia is on alert. We are taking all necessary measures to ensure our national security at the strategic level."

At the end of September, Russia sent official notices to NATO and Brussels warning that it would use nuclear weapons in defense of its territory, including Kaliningrad. In blunt language that unnerved European leaders, Russia's diplomatic message promised "Russian strikes against decision-making centers in the alliance's member states right from the outset."

Russian Professor Sergey Karaganov - a highly influential foreign policy figure with close ties to both President Vladimir Putin and Foreign Affairs Minister Sergey Lavrov - argues that "Russia must be prepared to use nuclear weapons." Because E.U.-NATO countries have population and economic advantages over Russia, Russia must use its "competitive advantage" in nuclear weapons to deter European military actions. Karaganov insists, "Nuclear weapons are necessary to prevent major wars, but this only works if the threat is taken seriously."

The head of Russia's Council on Foreign and Defense Policy then takes direct aim at Europe: "Western European elites must be punished for their aggressive policies ... and an EU that has lost its mind must begin to truly fear." Furthermore, "Seeking peace through non-nuclear means alone could prove far too costly for Russia."

Karaganov concludes, "If the current Ukrainian or German regime ... were to acquire nuclear weapons, we would be obliged to launch a preemptive strike because we'd have to stop them. It would be a short war, as a result of which these countries would cease to exist."

There are those in the U.K., Europe, Canada, and America who believe war with Russia is inevitable. Before we reach the point of no return, I humbly ask that people take a moment to remember why we all once feared WWIII. Remember why mutually assured destruction was madness. There is no shame in armistice when the alternative is Armageddon.

Tyler Durden Mon, 10/12/2026 - 05:00

EU Caps Chinese Hybrids At 350,000 As Deutsche Maps Every Trade Weapon Left In Europe's Arsenal

Brussels has finally picked a rung on the "escalation ladder." 

According to a document seen by Bloomberg, the EU will cap imports of Chinese hybrid vehicles at 350,000 cars per year, with the "safeguard measure" taking effect as soon as December 1. The limit rises 6% a year from the second year and the measure runs for four years. And to stay on the right side of the WTO's non-discrimination principle, the cap will formally apply to all hybrid imports, with China's quota "no less than any other source."

The cap puts a number on what Trade Commissioner Šefčovič brought back from Beijing on Friday, when he said the two sides had agreed to halve Chinese hybrid and plug-in hybrid exports to the EU ("a crucial first step, but only a first step"). Beijing's own readout mentioned only an "understanding on hybrid vehicle trade in a WTO-consistent manner": no volumes, no baseline, no timeline and no enforcement. Which is presumably why Brussels decided to write the number down itself.

How much does it bite? Per Eurostat data cited by Asia Times, the EU imported roughly 378,000 Chinese hybrids (218K plug-ins and 161K full hybrids) in the first seven months of 2026, an annualized pace of about 650,000. A 350,000 cap is therefore roughly 45% below this year's run rate, in line with the "halve" headline. Then again, back in October 2024, when the EV tariffs pushed Beijing into hybrids in the first place, Europe was importing about 3,800 Chinese hybrids a month (per FT data), or roughly 46,000 a year. By year four the cap grows to about 417,000. In other words, Brussels is capping the flood at almost 8 times the level that triggered it.

When we first reported the plan on Wednesday ("Better Late Than Never?"), our verdict was "just 10 years too late". The more interesting question is where this sits in Europe's arsenal, and how far up the escalation ladder Brussels is willing to climb.

Conveniently, Deutsche Bank's Marion Muehlberger answered precisely that in a ten-question Q&A published last week, ahead of Šefčovič's trip to Beijing, titled "Crunch time for EU-China trade relations"( and available to pro subs). The centerpiece is a single table, which may be the most useful cheat sheet on EU-China trade policy we have seen: every tool Brussels could deploy against Beijing, ranked from most to least likely, with the precedent and the catch for each one.

Notably, Brussels skipped the top rung. DB's base case was an anti-subsidy investigation into plug-in hybrids, with tariffs "in early 2027 at the earliest." Instead, the Commission reached for rung three, safeguards, which DB flags as needing qualified-majority backing and which "usually apply to all imports", exactly the WTO-friendly design in Bloomberg's document. The precedent DB cites is also a hint about how "temporary" these things tend to be: the EU's steel safeguards have been in place since January 2019.

Below we walk down the rest of the ladder, and explain why the most powerful weapons sit at the bottom precisely because nobody wants to fire them.

The Top Of The Ladder: Ready To Go (Mostly)

At the "high likelihood" end, DB lists the tools that are either already loaded or require little political courage:

• Anti-subsidy tariffs on plug-in hybrids. The groundwork for the investigation is reportedly already done, and the precedent is obvious: the anti-subsidy duties on Chinese EVs imposed in 2024. The catch: it takes at least 2 months to get even provisional tariffs in place (and as a reminder, it was Chinese hybrids that waltzed through the loophole left by those EV tariffs). This was DB's pick for the hybrid response; the safeguard below now looks like the faster route.
• "DiversifyEU". A brand new instrument to reduce reliance on single suppliers in strategic sectors, potentially including tariffs. Its legal form has yet to be determined and there is "no consensus yet on how interventionist" it should be, which is Brussels for "we have a name, a public consultation, and not much else."
• Safeguards against selected chemicals (PET), and potentially machinery and electrical goods later. Precedent: the steel safeguards in place since January 2019. The catch: they need a qualified majority and usually apply to all imports, not just Chinese ones. This is the rung Brussels just picked for hybrids, with the 350,000 cap formally applying to every exporter.
• The Industrial Accelerator Act: "Made in EU" and low-carbon requirements for public procurement and EV subsidies. Still in the legislative process, and "adoption could still take months."

The Middle: Narrow, Slow, Or National

Further down, the tools get sharper but also more cumbersome:

• The International Procurement Instrument could exclude Chinese companies from the €2 trillion EU procurement market. It has been used exactly once, in an April 2024 probe of China's medical-device procurement, and the resulting restriction applies only to contracts above €5 million. Diversification at its finest.
• Inbound FDI screening is left to individual countries. Germany registered 339 national screening cases in 2025 and imposed restrictions in just 2% of them.
• Dual-use export controls on emerging technologies, with the Dutch restrictions on ASML lithography exports as the template. DB's warning here is blunt: this one "increases likelihood of forceful Chinese retaliation."

The Bottom: The Bazooka Nobody Fires

At the very bottom of the ladder, and the bottom of DB's likelihood scale, sits the Anti-Coercion Instrument (ACI), the EU's so-called "trade bazooka." On paper it can do almost anything: tariffs, import and export restrictions, export controls on key technologies, exclusion from public contracts, revoking intellectual property protection, blocking FDI, restricting access for banks and insurers, and curbing data transfers under GDPR.

In practice, DB notes, the instrument "has never been used so far." Deployment is a multi-stage process that "might take two to three months" and requires a qualified majority among member states.

Regular readers will recall the last time Brussels dusted it off: in January, when Europe prepared to unleash the anti-coercion "trade bazooka"... against Trump over Greenland. The bazooka was never fired then either, but it is telling that Europe's first instinct was to point it at Washington, not Beijing.

Just above the ACI sits the newest entry: a "New Section 301-like tool", i.e. the Franco-German proposal that Macron and Merz sent to von der Leyen last Monday. As Reuters reported, the tool would target dumping, widespread subsidies and restricted currency convertibility without naming China, and Commission countermeasures would take effect unless a qualified majority of member states objected. DB's caveat: there are "concerns that such a tool would not be compliant with WTO rules", and it would take time to create.

The Trigger Problem

Which brings us to the crux of DB's argument, and the reason Paris and Berlin bothered with a new tool in the first place: speed.

While trade defence escalations are likely to be felt quite fast by European industries (i.e., export controls on rare earths), the EU will take months to invoke its current deterrent, the Anti-Coercion Instrument (ACI). The proposed new instrument could be deployed rapidly unless there is a qualified majority against it – a much lower hurdle and comparable to the activation of anti-subsidy tariffs.

In other words, Beijing can turn off Europe's rare earths in an afternoon, while Brussels needs a quarter just to schedule the vote. DB says the Franco-German tool would let the EU react "within 24 hours", which would make it "a far better deterrent in any trade dispute than the ACI."

How big is the gap? Here is our attempt to put the EU's reaction times side by side, using DB's estimates and the one real-world precedent: the 2024 EV case, where it took Brussels 275 days from launching the probe to provisional duties, and 392 days to definitive ones.

To be fair, the hybrid safeguard is the fastest Brussels has moved yet: if it kicks in on December 1, that is 55 days after Bloomberg first reported the plan, roughly in line with DB's "at least 2 months" for provisional anti-subsidy duties, and positively lightning-fast by EU standards. Then again, this is a quota China effectively pre-cleared at last week's talks. The real test is how fast Brussels moves when China says no.

Meanwhile, China does not need a qualified majority for anything. Recall that we warned a year ago that Europe was walking into the rare earth trap, with McKinsey estimating that up to 4 million German jobs were at risk from a prolonged export ban. And Beijing has shown it is happy to escalate on its own timeline:

China adds 14 European entities to export control list, hitting back at EU sanctions

— zerohedge (@zerohedge) July 24, 2026

*CHINA THREATENS RETALIATIONS AGAINST EU: CCTV

— zerohedge (@zerohedge) August 19, 2026

Of course, a faster trigger is only a deterrent if someone is willing to pull it. And even Deutsche is not sure the new tool would be new at all: "it is not clear yet" whether Paris and Berlin want a separate instrument or "simply propose to make the activation of the existing tool easier." Either way, creating it "would require several months." A rapid-response tool that takes months to build: very European.

Germany Finally Notices

The more interesting political shift is Berlin. DB argues that the Franco-German letter is "the clearest evidence of a more hawkish turn of the German government", which shows "greater willingness to apply the EU's trade defence toolbox" but "still refrains from outright escalation."

The reason for the change of heart is not hard to find. Germany's old model of exporting machinery and cars to China is breaking down as China makes those goods itself, and then sells them to everyone else. China's share of global car exports went from 5% in 2013 to 15% in 2025, on par with Germany, while in specialised and general industrial machinery, the crown jewels of the Mittelstand, China has already overtaken Germany.

Inside Europe, it looks even worse. As we put it last month, "why European manufacturing is doomed in one chart": every European automaker has lost share in Europe, while Chinese brands gained almost 5 percentage points in a year.

And yet, DB notes, China "remains an important market and innovation partner for many German firms", sometimes called "the fitness center for German corporates." Which is a polite way of saying that a good chunk of DAX earnings still depends on the country Berlin now wants to get tough with. That is also why the bilateral deficit keeps widening, back to around 2% of EU GDP:

What Happens Next: "Rather Minimalist"

So how did DB's roadmap hold up, and what comes next?

• Last week's Beijing talks: DB expected the Šefčovič-Wang meeting to "likely not bring a major breakthrough," with "little movement on the EU's demand to restrain exports to Europe." Call it half right (pun intended): Brussels says Beijing agreed to halve hybrid exports, but China put no number in its own readout, so the EU is now writing one into a safeguard. Beijing also promised to keep easing rare earth export licensing through a "green channel", which tells you who holds the leverage.
• Thursday-Friday (Oct 15-16) EU summit: leaders will discuss the hybrid cap along with broader ways to stop the flood of subsidized Chinese goods, and Šefčovič still needs their endorsement. DB had pencilled in an anti-subsidy probe into plug-in hybrids as the most likely next step, with tariffs "in early 2027 at the earliest"; the safeguard now looks like the faster route.
• December 1: the hybrid cap takes effect, if all goes to plan.
• December 17-18 summit: the Commission is expected to present DiversifyEU beforehand.

Overall, DB expects EU leaders "to continue their rather minimalist approach", relying on established tools and "selectively broadening their toolbox... while seeking to avoid a broader trade conflict with China." Bloomberg's scoop suggests DB nailed it: Brussels climbed exactly one rung, and picked the one least likely to upset Beijing.

DB also reminds Brussels where the real problem lies. The bank argues Europe's China headache is as much a "Europe problem" as a China problem: energy costs, weak productivity, scarce risk capital and regulation. And on that front, progress is underwhelming: implementation of Draghi's reform agenda has reached just 16% (41% including partially implemented measures), with clean energy and the integrated market still dominated by "pending" and "planned."

Bottom Line

DB's ideal endgame is "derisking rather than decoupling": continued trade with China, but with fewer strategic dependencies, more reciprocity and better market access, alongside a more competitive Europe (good luck). Goldman's European trading desk was less diplomatic when the cap was first floated on Wednesday, noting that the hybrid measures "will only briefly limit China's market share gains."

We side with Goldman. Deutsche's table shows that Europe has built an impressive arsenal, but its most potent weapons sit at the bottom of the likelihood scale precisely because Brussels is afraid of what Beijing would do in response, and Beijing knows it. As long as China controls the rare earths and Germany's carmakers still need the "fitness center", the EU's escalation ladder will be climbed one slow, carefully telegraphed rung at a time, while China's market share keeps climbing much faster.

Thursday's summit will show whether Europe's leaders want to go any further up the ladder. Our bet: they stay right where they are, and the whole thing eventually fades with a whimper alongside Germany's once mighty auto industry.

Much more in the full Deutsche Bank "Crunch time for EU-China trade relations" note, available to pro subs.

Tyler Durden Mon, 10/12/2026 - 04:15

UK Govt Wants "Interventionist State Policing & Regulating Of Online Space"

Authored by Kit Knightly via OffGuardian,

The United Kingdom already has one of the most controlled digital environments in the world.

We have a social media ban for children in place, requiring everyone to scan their ID or otherwise verify their age to use social media. They require age verification for "adult content". There are proposals and legislation pending to implement "device level nudity detection", introduce a "social media curfew" for teenagers, and we already lead the world in social media-related arrests.

But, according to the Culture and Technology Secretary Lisa Nandy, we are far from done.

Last week, at the Labour Party Conference, Nandy gave a speech hailing the UK's "first in the world" social media ban (it's not actually the first, except by some very specific metric, but whatever). She told the conference [emphasis added]:

[T]he world wide web - that created [sic] by Tim Berners Lee, to share knowledge, not exploitation - has revolutionised the way we live. An extraordinary democratic force, a source of connection, creativity and solace that has unleashed incomprehensible hatred, anger and polarisation - ask yourselves this, while it has undeniably shaped and defined us, have we done anything like enough to shape and define it?

Like the printing press, electricity and television, it has upended society. But what is almost unique to this moment is how absent the state - on behalf of its people - has been for so long. We have outsourced a revolution almost entirely to the private sphere to shape and police.

It is an almost violent indifference. To the women whose privacy and dignity is stripped from them. To the children who are preyed upon, their childhoods stolen. To people - how many of you in this room particularly women- hounded from public life. Where anger is monetised and profit put before people's lives.

So conference, we are calling time on that indifference. Enough is enough.

We will not look away or stand aside when it comes to safety online. And we will be the first. First in the world to introduce legislation to make it impossible for children to take, share or view nude images. First in the world to introduce a comprehensive social media ban for children.

...[W]e will do whatever it takes. Because when it comes to women and girls. Women's rights are human rights and human rights are non-negotiable.

But friends shouldn't we be ashamed, that decades of violent indifference has come to this, having to remove our children from social media altogether, because we cannot protect them from harm?

So our message to the incredible tech sector, who are everyday leading breathtaking innovation, is that this is our collective call to arms.

Let this country pioneer technology as an unequivocal force for good. Because our online spaces live in the palm of our hands, and the cables that run under our feet. They are a civic space like any town hall or high street. So let's insist they are not just safe but thriving, inclusive and empowering.

Where people can trust what they see, and find common ground and connection.

Prior to her speech, Nandy had told The Guardian:

"We shouldn't accept that this is the end [...] This is a staging post to what must be a very active interventionist state, policing and regulating the online space so that people are safe."

To paraphrase a politician rather more charismatic than Nandy, it seems this is not the end of digital censorship, it's not even the beginning of the end of digital censorship, or even the end of the beginning...rather it may be the beginning of the beginning.

So what does that mean, in real terms?

Well, digital ID obviously.

One of Andy Burnham's first acts as Prime Minister was to "scrap" the BritCard digital ID scheme. But that was very much a gesture.

It never really went away, and it will be coming back...quite soon if simmering headlines like "Britain can't shelve Digital IDs forever" are anything to go by.

Probably, in the near future, something will happen that will "force" good old Andy to "revisit the digital ID issue".

And, of course...

Without global interoperability, digital IDs can't deliver on their promise
Tech Radar

And, once digital ID is officially unscrapped and "globally interoperable" the social media ban for children will spread to verified ID for digital purchases, or to use AI or to prevent the spread of "misinformation, or even ID-gating internet access itself.

Whatever they want.

If everything they've already done is only a "staging post", just imagine how tight a grip they really want.

"A very active interventionist state, policing and regulating the online space so that people are safe."

Chilling stuff. Perhaps most chilling of all is the fact her handlers think this is the positive spin that will sell the idea to the proles.

Tyler Durden Mon, 10/12/2026 - 03:30