Pavlovian Bidding Up Of Equities

By Michael Every of Rabobank

High Hopes

US and European equities closed higher yesterday, oil prices rose more than 5%, the Dollar gained, 10-year Treasury yields lifted by 5bps and Bitcoin rose slightly following news that President Trump will pardon Binance founder Changpeng Zhao. Equity markets were buoyed by an announcement from the White House that Presidents Trump and Xi will meet next Thursday on the sidelines of the APEC conference in South Korea.

The Pavlovian bidding up of equities comes as a response to hopes that the trade détente agreed between the US and China in May, and extended in August, will again be kicked down the road past the November 10th expiry date. Both sides accuse the other of cheating on previous trade agreements. The USA points to China’s restrictions on rare earths and refusal to buy US soybeans, while China points to ongoing restrictions on the sale of high-end AI chips, fresh tariff threats and revocation of Chinese student visas as evidence of US violations.

President Trump has been striking an optimistic tone in recent days about the potential for trade agreement with China, but his optimism may reflect his own assessment of the US’s relative bargaining position rather than an expectation of mutual cooperation between the two parties. Moves overnight to open investigations into China’s compliance with the Phase One deal struck in Trump’s first term don’t fill one with confidence that the US is approaching the meeting in a spirit of collaboration, but is instead bolstering his bargaining position by building a case against legal challenges to his use of the International Emergency Economic Powers Act to impose tariffs.

Recent agreements between the US and Australia to collaborate on breaking China’s stranglehold on rare earths mining and processing went down like a lead balloon in Beijing, where officials chided the Western countries for politicizing trade. That admonishment of the West stands awkwardly alongside an outline of China’s latest five-year-plan released overnight, emphasising an even more autarchic approach to trade and technology, as well as incorporating military capabilities into the country’s development blueprint for the first time. Clearly, neither of the major belligerents in the trade war expect anything other than more self-reliance and less mutual exchange in the future.

Higher oil prices are a likely culprit for lifts in inflation breakevens that saw nominal yields rise across major sovereign curves yesterday. Fresh US sanctions on Russia’s Rosneft and Lukoil has seen a sharp price response over the last two days, which may have been helped along by a vote in the Israeli parliament orchestrated by far right parties calling for the annexation of the West Bank. J.D. Vance and Marco Rubio condemned the latter as an unhelpful stunt that threatens to undermine the fragile peace in the region. That has broader implications for US foreign policy objectives, which are concerned with normalizing relations between Israel and Gulf states to counter Chinese, Russian and Iranian ambitions in the region.

Chinese and Indian energy firms have reportedly curtailed seaborne purchases of Russian oil in attempt to avoid being hit with secondary sanctions, while trade negotiations between the USA and India have seen headlines around India cutting purchases of Russian crude in return for more favourable tariff treatment by the USA. Mysterious explosions in recent days at refineries in Hungary and Romania that have links to the Russian energy complex perhaps played a part in seeing active European gasoil futures rally for four straight days after being reported on Monday.

Vladimir Putin criticized the latest round of sanctions as an “unfriendly act” that he said will set back Russia-US relations that had just begun to improve, while conceding that the measures will have a substantial impact on Russia’s oil revenue dependent war economy. President Trump is seeking to use the harsher sanctions in conjunction with greater materiel support for Ukraine to force Putin to the negotiating table to end the war.

In other market news, Ford Motor Company surprised market analysts yesterday by recording a more than doubling in quarterly profit and topline revenue of $50bn - $7bn above analyst expectations. The company said that strong consumer demand for SUVs propelled the result, but downgraded future guidance due to revenue impacts from an aluminium supply squeeze caused by a fire at a plant in New York. Ford also said that it now expects the tariff impact on the bottom line to be $1bn this year, down from a previous estimate of $2bn following the introduction of relief measures by the Trump administration.

Ford’s result holds some similarities to what we saw from Tesla earlier in the week. Tesla recorded strong topline growth on record vehicle sales figures (helped along by the expiry of tax credits at the end of September), but unlike Ford saw profits squeezed by rising operating costs related to AI R&D. With an official data drought still underway in the US due to the government shutdown the strong topline performance of both automakers is an interesting suggestion that consumption of durable goods in the USA remains resilient and that tariff impacts are perhaps less severe than initially thought – at least for the time being.

Markets will get a further read on the state of the US economy today when official CPI figures for September are (belatedly) released. The consensus estimate on the Bloomberg survey is for a 0.4% MoM lift in headline inflation and a 0.3% lift in the core rate. That should be sufficient to see headline CPI accelerate to 3.1% YoY, but OIS futures nevertheless still have ~2 more Fed cuts priced in before the end of the year. High hopes indeed.

Tyler Durden Fri, 10/24/2025 - 14:25

Mamdani Scores 11th Hour Endorsement From Hakeem Jeffries

Despite Democrats repeatedly blaming progressives for hijacking the 2024 election and swinging the party too far to the left, it seems they're unwilling to learn from their mistakes, since they never make any (according to Democrats with knowledge of their infallibility).

On Friday, House Democratic leader Hakeem Jeffries (D-NY) gave a last minute endorsement to Zohran Mamdani for New York City Mayor - a significant reversal of his prior criticism of the Democratic Socialists of America, of which Mamdani is a member. 

Jeffries told the NY Times that while the two men have "areas of principled disagreement," Mamdani had won "a free and fair election" in the Democratic primary - and that the party needs to do whatever it can against the "existential" threat [to their grifts] posed by President Trump. 

"Zohran Mamdani has relentlessly focused on addressing the affordability crisis and explicitly committed to being a mayor for all New Yorkers, including those who do not support his candidacy," said Jeffries, adding "In that spirit, I support him and the entire citywide Democratic ticket in the general election."

Jeffries' statement came just one day before early voting was set to begin, joining a list of other notable Democrats who've endorsed the socialist which include Gov. Kathy Hochul and state assembly speaker Carl Heastie. 

The 11th hour endorsement from Jeffries comes amid intense competing pressures; House Democrats and local leaders who are fully behind a socialist agenda, and others (mostly swing district candidates and donors), who think Mamdani's economy-killing mandates will give Republicans ammunition in next year's midterm elections. 

Of note, neither of New York's senators, Schumer or Gillibrand, have made an endorsement in the NYC mayor's race, while state party chairman Jay Jacobs has outright said he would not endorse Mamdani due to the candidate's democratic socialist beliefs and criticism of Israel. 

According to the report, two aides to former Gov. Andrew Cuomo, who's running against Mamdani as a third-party candidate, attempted to convince Jeffries not to endorse Mamdani. 

Don't Gloat Just Yet, Republicans

As the Wall Street Journal editorial board notes... 

Some Republicans welcome a Mamdani victory because they think it will help them in the 2026 midterms. They may be right, especially in New York state. President Trump and the GOP will try to elevate “Commie Mamdani,” as Mr. Trump calls him, as the Democratic spokesman. Elise Stefanik, the likely GOP candidate for New York Governor, is already hammering Gov. Hochul for endorsing the socialist.

But GOP glee is short-sighted. The demise of New York as a financial center wouldn’t be good for the country, no matter how much Texas and Florida benefit. If the city heads toward bankruptcy, the pressure for a bailout from Washington will build.

The biggest risk is a socialist takeover of the Democratic Party. Sooner or later the party will retake the White House, as inevitably there will be a recession or voters will simply tire of the incumbents. Remember how Jonathan Chait and other left-wingers hoped the GOP would nominate Mr. Trump in 2016 because he’d be easy to beat? The country needs a sane and centrist Democratic Party as an alternative to the GOP in the post-Trump era.

Mr. Cuomo argues that if the November electorate expands with more traditional Democrats, he can still win. The stakes are larger than who will run the city that never sleeps.

Tyler Durden Fri, 10/24/2025 - 14:05

Anonymous Donor Gives $130 Million To Cover Shortfall In Troop Pay During Shutdown

Authored by Jacob Burg via The Epoch Times,

President Donald Trump said on Oct. 23 that an anonymous donor has sent the federal government a $130 million check to cover the shortfall in military troop pay during the ongoing government shutdown.

“He called us the other day and he said, ‘I'd like to contribute any shortfall you have because of the Democrat shutdown. I’d like to contribute, personally, contribute any shortfall you have with the military, because I love the military and I love the country, and any shortfall, if there’s a shortfall, I’ll contribute it,’’’ Trump said during a roundtable meeting with his Cabinet.

Trump said the donor—a friend of his—sent the federal government a $130 million check on Thursday, but that the man doesn’t want to be named.

“He doesn’t really want the recognition, if you want to know the truth, but he gave us a check for $130 million, which was sort of a shortfall, and that’s going to go to the military,” the president said.

The previous day, lawmakers had prepared to vote on a bill to pay troops and some other federal employees who are continuing to work through the shutdown.

Introduced by Sen. Ron Johnson (R-Wis.), the bill, the “Shutdown Fairness Act,” offers “a permanent fix that will ensure excepted workers and our troops are paid during a shutdown,” the senator said.

Deemed as essential, excepted federal workers are directed to continue working during any lapses in government funding. They work without pay during the shutdown and receive back pay only after the government is funded again.

Senate Majority Leader John Thune (R-S.D.) moved the bill forward on Oct. 21, setting up the vote on Oct. 23.

The legislation failed in the Senate on Thursday, coming short of the 60 votes needed to advance in a 54–45 vote.

Sens. Jon Ossoff (D-Ga.), Raphael Warnock (D-Ga.), and John Fetterman (D-Pa.) joined the majority of Republicans in supporting Johnson’s bill.

Sens. Chris Van Hollen (D-Md.) and Gary Peters (D-Mich.) announced ahead of the vote on Thursday that they were preparing alternative measures to pay all federal workers during the government shutdown.

“Our proposal doesn’t discriminate among federal employees,” Van Hollen said in a Senate floor speech.

Titled the “True Shutdown Fairness Act,” Van Hollen’s bill also includes a provision that would block Trump from firing federal workers during the shutdown. Johnson objected when Van Hollen sought unanimous consent for his competing proposal.

So far, there have been 12 votes to temporarily fund and reopen the government since the shutdown began on Oct. 1, all of which failed to reach the 60-vote threshold.

The shutdown has now stretched into the second-longest in U.S. history, with the longest lasting 35 days between December 2018 and January 2019.

Tyler Durden Fri, 10/24/2025 - 13:45

Canada's Economy Will Not Survive A Prolonged Trade War With The US

The ongoing trade war between the US and Canada barely registers on the radar for most of the American public, largely because it doesn't affect their wallets in any significant way.  However, on the Canadian side of the border, the economic conflict dominates headlines and discussion.  Average Canadians face significant uncertainty and Canada's export markets are teetering on the brink of crisis. 

The lesson here?  Perhaps it's a bad idea to engage in brinkmanship with the US when the US buys 76% of your exports?  Canada's exports represent 33% of their total annual GDP, while US exports are only 10% of GDP.  That is to say, Canada needs the US far more than the US needs Canada.  The numbers are clear as day.

The Trump Administration's recent announcement that all trade negotiations with Canada have been shut down requires some analysis of future consequences.  The trigger for the cancellation was a Canadian ad aimed at US conservatives featuring excerpts of a Ronald Reagan speech with criticisms on tariffs. 

According to the Ronald Reagan Foundation, the ad uses selective editing to present a false picture of Reagan's position on trade protections.  It is true that Reagan was generally a proponent of globalization, but he also instituted a number of protectionist policies during his two terms as US President.  Reagan pressured Japanese car makers to adopt import restraints on automobiles, which remained in effect until 1985.  Japan was told that if they did not accept the restraints, Congress would pass harsher measures.

Additionally, Reagan imposed protectionist measures on textiles, specialty steel, Canadian wood products, Italian pasta, motorcycles, and even mushrooms during his two terms. In 1986, Reagan threatened to impose a 200 percent tariff on Spain for its restrictions on U.S. grain imports.

That said, Reagan's affinity for globalism also helped to accelerate the eventual collapse of US manufacturing jobs, which were ultimately outsourced to third world countries with cheap labor sources.  The American middle class has been in steep decline ever since globalist policies were instituted. 

Canada's political advertisement is an attempt to exploit conservative nostalgia for the Reagan era while deliberately ignoring the nuances of his trade views.  Not to mention, it shows that the Canadian government has no intention of addressing the parasitic relationship imposed on Americans through NAFTA and the USMCA.  Numerous American industries have been crushed in the wake of these trade agreements. 

Trump's fury over Canada's propaganda efforts is understandable, because it shows they would rather try to manipulate the American electorate rather than engage in sincere negotiations.  This is a mistake on their part; manufacturing is now fleeing Canada.

Approximately 185,000 jobs have vanished in Canada since the beginning of the trade war.  The majority of these jobs have come from the manufacturing sector.  Companies shifting jobs away from Canada and to the US include:  Stellantis, General Motors, and multiple steel producers.  If tariffs continue, the country is projected to lose another 140,000 jobs by the end of 2025. 

Canada's GDP for 2025 is estimated to decline 2.6% to rest at 0.4%, equating to $78 billion in lost economic output.  Prices also continue to skyrocket on basic necessities including food and housing. 

Prime Minister Mark Carney has announced a plan to shift reliance on US markets and expand exports to other trading partners, but this plan is naive.  The US represents 30% of all global consumer markets, and Canada has enjoyed the good fortune of sharing a border with the biggest single buyer of exports in the world.  Meaning, the cost of moving goods is minimal, which maximizes profits for companies based in Canada.  Trying to recreate these conditions with alternative buyers overseas is impossible.

Long term option for Canada include moving away from manufacturing and focusing on natural resources, which they have in abundance.  Again, this still requires access to the US for any substantial exports, not to mention investments for exploration.  As of 2023, the U.S. had a total FDI position of $452 billion in Canada across all sectors. This represents a significant portion of all foreign investment in the country. 

Carney's apparent arrogance on trade is perhaps driven by his progressive and globalist ideology, and as we have seen time and time again with the far-left, they don't know how to admit they're in over their heads.  They only double down.  Therefore, it's likely that Carney will continue to blunder through negotiations with the US and lead Canada into economic disaster.  

Tyler Durden Fri, 10/24/2025 - 13:25

US Opens Trade Probe Into China's Phase One Commitments Before Trump-Xi Talks

U.S. Trade Representative Jamieson Greer announced moments ago that the U.S. has initiated a Section 301 investigation into China's implementation of the Phase One trade deal, a deal that has been out of public focus since President Trump's first term. This development comes less than one week before Trump and Chinese President Xi Jinping are scheduled to meet on the sidelines of the Asia-Pacific Economic Cooperation summit to ease trade tensions. The flurry of recent trade-related headlines, from rare earths to soybeans to jet engines, suggests that both economic superpowers are attempting to build leverage ahead of trade talks.

"President Trump made history in his first term when he stood up for the American worker and brokered the Phase One Agreement, establishing a more fair and reciprocal trade relationship with China," Ambassador Greer stated.

Greer wrote in a statement, adding, "The initiation of this investigation underscores the Trump Administration's resolve to hold China to its Phase One Agreement commitments, protect American farmers, ranchers, workers, and innovators, and establish a more reciprocal trade relationship with China for the benefit of the American people."

USTR provided additional context on the Phase One trade deal reached in December 2019, which required China to implement structural reforms in areas such as intellectual property, technology transfer, agriculture, and financial services, and to significantly increase purchases of U.S. goods and services. Beijing's shift toward sourcing agricultural products from the U.S. to Brazil has inflicted pain across America's Midwest farm belt, and is likely one key reason this probe was opened. 

Five years after the agreement was signed, China has not fulfilled its commitments, particularly regarding non-tariff barriers, market access, and purchase targets. Ahead of next week's Trump-Xi meeting at APEC, Greer will investigate whether China's failure to comply with the Phase One deal violates U.S. trade rights under Section 301.

Despite the probe, President Trump said on Thursday, "I think we're going to come out very well and everyone's going to be very happy."

The Trump-Xi meeting also comes just before a trade truce between Washington and Beijing is set to expire on November 10. Trump has threatened to impose an additional 100% tariff on Chinese products on November 1 if Beijing does not ease shipments of rare earth minerals to the U.S. Trump said this week that upcoming talks with Xi will produce a "good deal" on "everything" related to trade.

Market attention now turns to any weekend statements from both sides. So far, the market reaction has been muted across equities, bonds, and FX, as a cooler CPI print in the U.S. has pushed main equity indexes to around noontime.  

Tyler Durden Fri, 10/24/2025 - 12:45

'Cooler' Than Expected CPI Data Leaves Fed On Track For Rate-Cuts

With vol markets fully clenched, this morning's much-anticipated CPI print (no matter how full of guesstimated data) is sure to prompt an initial flurry of trading activity but as we detailed in our preview, absent some major outlier, is likely to be mostly irrelevant with rate-cut expectations now fully pricing in 2 x 25bps cuts for the rest of the year.

As a reminder, this data was supposed to originally be revealed on Oct 15 and would have been indefinitely delayed had the White House not intervened with a demand that the BLS recall staff and figure out what the number is and report it today at 8:30amET.

Just as we suggested, the headline data was a miss (cooler than expected)...

CPI Preview: Likely A Miss But Mostly Irrelevant https://t.co/hEwPttKmOG

— zerohedge (@zerohedge) October 24, 2025

...rising 0.3% Mom (vs +0.4% exp), with the YoY print at 3.0% (below expectations of +3.1% but higher than the 2.9% YoY print in August).

Source: Bloomberg

That is the hottest YoY headline CPI since January.

Energy costs rose but Services slowed...

Source: Bloomberg

Headline CPI highlights:

• The index for gasoline rose 4.1% in September and was the largest factor in the all items monthly increase, as the index for energy rose 1.5% over the month.

  • The gasoline index increased 4.1 percent over the month.

  • The index for electricity decreased 0.5 percent over the month and the index for natural gas decreased 1.2 percent over the same period.

• The food index increased 0.2% over the month as the food at home index rose 0.3% and the food away from home index increased 0.1%

  • Four of the six major grocery store food group indexes increased in September.

  • The index for other food at home rose 0.5 percent over the month after rising 0.1 percent in August.

  • The cereals and bakery products index and the nonalcoholic beverages index both increased 0.7 percent in September

  • The dairy and related products index declined 0.5 percent in September as the cheese and related products index decreased 0.7 percent. The index for fruits and vegetables was unchanged over the month

  • The index for limited service meals rose 0.2 percent over the month while the index for full service meals was unchanged

• Other indexes with notable increases over the last year include medical care (+3.3%), household furnishings and operations (+4.1%), recreation (+3.0%), and used cars and trucks (+5.1%).

Energy Services costs and Used Car prices fell MoM (along with electricity costs - which is odd given the massive increase in demand via AI Data Center build outs) but Gasoline costs rose notably...

...something that will be erased next month as oil prices tumbled...

On an annual basis, the shelter index increased 3.6% over the last year (but continues to slow dramatically).

• Rent inflation rose 3.40% YoY in Sept, down from 3.49% in Aug and the lowest YoY increase since Dec. 2021; it was also up 0.17% MoM, the smallest monthly increase since August 2021

• Shelter inflation rose 3.58% in Sept, down from 3.63% in Aug and the lowest annual increase since Oct 2021; it was also up 0.28% MoM, down from 0.34% in Aug.

A similar pattern was seen in Core CPI data with the print rising 0.2% MoM (below expectations of +0.3%), but pulled the YoY print down to 3.0% (down from 3.1% in August), the lowest since June...

Source: Bloomberg

Core CPI highlights:

• Indexes that increased over the month include shelter, airline fares, recreation, household furnishings and operations, and apparel

• The indexes for motor vehicle insurance, used cars and trucks, and communication were among the few major indexes that decreased in September.

Core CPI details:

• The shelter index increased 0.2 percent over the month.

  • The index for owners’ equivalent rent rose 0.1 percent in September, the smallest 1-month increase in that index since January 2021.

  • The rent index increased 0.2 percent over the month.

  • The index for lodging away from home rose 1.3 percent in September.

• The index for airline fares increased 2.7 percent over the month, after rising 5.9 percent in August.

• The recreation index rose 0.4 percent in September as did the household furnishings and operations index.

• The index for apparel rose 0.7 percent over the month and the index for personal care increased 0.4 percent.

• The new vehicles index rose 0.2 percent in September.

• The index for used cars and trucks also decreased 0.4 percent over the month and the index for communication declined 0.2 percent.

• The motor vehicle insurance index declined 0.4 percent in September, after being unchanged in August.

• The medical care index increased 0.2 percent over the month, after declining 0.2 percent in August.

• The index for hospital services increased 0.3 percent over the month, as did the index for prescription drugs.

• The dental services index decreased 0.6 percent in September and the physicians’ services index declined 0.1 percent.

Core Services costs declined significantly...

Source: Bloomberg

Finally, SuperCore CPI (Services Ex-Shelter) also saw its YoY print slow to +3.30% (the slowest since May)...

Source: Bloomberg

Transportation Costs slowed dramatically in September...

Source: Bloomberg

On a 3m and 6m annualized basis there is no sign of the hyped-up tariff-driven inflation that the left and their establishment puppets have been screaming about for months...

Source: Bloomberg

Summing up September's (delayed) data, Services inflation slowed to its weakest since Nov 2021 and Goods inflation was flat at +1.5% YoY...

Source: Bloomberg

There's certainly nothing here to stop The Fed cutting rates again next week.

But we do note that given the surge in money supply, once could argue, re-inflation is coming...

By which time Trump will have a new Fed head to bully.

*  *  * SIGN UP FOR SUNDAY NIGHT KNIFE DROPS!

Tyler Durden Fri, 10/24/2025 - 12:39

Garland Personally Ordered Anti-Trump Arctic Frost Probe

Authored by Luis Cornelio via Headline USA,

A newly declassified memorandum confirms that the FBI’s anti-Trump Arctic Frost probe was requested by FBI Director Chris Wray and personally approved in 2022 by Attorney General Merrick Garland, the two top officials in the Biden DOJ. 

The memorandum—written by Wray and addressed to Garland on April 4, 2022—explicitly requested authorization to launch the probe. 

“Your approval is requested as soon as possible,” Wray wrote in the memo for the “Approval to Open a Certain Sensitive Investigative Matter Investigation.”

In its summary, Wray said the probe would center around President Donald Trump’s challenge to the certification of the 2020 election and the alleged submission of alternate electors to the federal government.

“Open source reporting and public statements made by individuals closely associated with Donald J. Trump, Inc. (Trump Campaign) present an articulate factual basis indicating the existence of a federal crime, and thus the FBI seeks to open a full investigation,” Wray proclaimed. 

Wray noted Garland’s personal approval was needed due to the sensitive nature of the probe. 

The file also shows Deputy Attorney General Lisa Monaco left a hand-written note to Garland reading, “Merrick – I recommend you approve. LM 4/5/22.” 

Signatures on the memo confirm Garland approved the probe that same day. 

The controversial memo was released by the Trump administration after Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, requested its declassification. 

In an X post, Grassley decried that the memorandum ultimately unleashed “unchecked” government power at the highest levels.

Just received this doc frm DOJ Proof that Biden Atty General Merrick Garland+ Deputy Atty General Lisa Monaco+ FBI Dir Chris Wray all PERSONALLY APPROVED opening Arctic Frost

This investigation unleashed unchecked govt power at the highest levels My oversight will continue pic.twitter.com/atuRnC8ara

— Chuck Grassley (@ChuckGrassley) October 23, 2025

Grassley’s criticisms are not unfounded.  

Declassified documents confirm that the FBI probe expanded to include extensive surveillance of multiple conservative organizations, including Turning Point USA, the Conservative Partnership Institute and several pro-Trump super PACs.  

The probe also targeted the phone records of at least eight lawmakers, seven Republicans and one congressman. 

This probe also paved the way for Garland’s appointment of Special Counsel Jack Smith, who went on to criminally indict Trump twice, the first time in U.S. history a former president faced such charges.

Tyler Durden Fri, 10/24/2025 - 12:25

Hungary Has Good Reason To Be Enraged About Poland's Ruling On The Nord Stream Suspect

Authored by Andrew Korybko via Substack,

Polish Judge Dariusz Lubowski ruled against extraditing a suspect in the Nord Stream attack to Germany on the grounds that this act of sabotage occurred in the context of a “just, defensive war”, Germany doesn’t have jurisdiction over the international waters in which it occurred, and the Ukrainian state would be responsible if it really orchestrated this attack, not the conspirators who carried it out. That enraged Hungarian Foreign Minister Peter Szijjarto despite his country having no direct stake in this.

He then wrote on X: “Scandalous: according to Poland, if you don’t like an infrastructure in Europe, you can blow it up. With this, they gave advance permission for terrorist attacks in Europe. Poland has not only released but is celebrating a terrorist—this is what European rule of law has come to.”

These are compelling points and show that Hungary cares about the principles involved in this case. It also has indirect stakes in all of this that casual observers might not be aware of and which will now be explained.

Many probably forgot given how much has gone on over the past 3.5 years, but Hungary receives a significant share of its oil from Russia’s Druzhba pipeline that transits through Ukraine. Szijjarto previously accused Kiev of attacking this critical infrastructure as implied punishment for Budapest’s pragmatic approach towards the conflict, and his government even sanctioned the commander involved, Robert “Magyar” Brovdi. Lubowski’s ruling, however, challenges the legitimacy of Hungary’s policy.

The precedent of declaring Ukraine’s fight against Russia to be a “just, defensive war” could be exploited by judges across the EU to absolve Kiev of responsibility for undermining Hungary’s energy security. They could also argue that Hungary has no jurisdiction over Russia where the Druzhba pipeline was bombed just like Lubowski argued that Germany has no jurisdiction over the international waters in which Nord Stream was bombed. Any such move, even if only symbolic, would further isolate Hungary within the EU.

In practice, some members might welcome “Magyar” despite Hungary banning him from entering the EU, while others might promise Ukraine that it can continue undermining its energy security without fear of punishment from the EU. Poland might lead the way after Foreign Minister Radek Sikorski tweeted to Szijjarto that “I hope your brave compatriot, Major Magyar, finally succeeds in knocking out the oil pipeline that feeds Putin’s war machine”. It thus wouldn’t be surprising of “Magyar” soon visits Warsaw.

Just like the Nord Stream bombing was an attack against NATO and EU member Germany, so too have the Druzhba bombings been attacks against NATO and EU member Hungary. If Germany can’t advance its interests vis-à-vis Nord Stream despite hosting more US military troops than any NATO member and being the EU’s de facto leader, then comparatively less important Hungary stands no chance of advancing its own vis-à-vis Druzhba. The same goes for Slovakia and non-NATO and -EU member Serbia.

Poland’s ruling on the Nord Stream suspect therefore enraged Hungary because the precedent that was established could soon be weaponized against it.

Another significant point is that this amounts to one NATO and EU member legally justifying an attack against another. The implications are far-reaching and could further divide both blocs. 

Poland’s gradual revival of its lost Great Power status is thus shaking up the European order and creating even more uncertainty in a continent that’s already bedeviled by it.

Tyler Durden Fri, 10/24/2025 - 11:45

Watch: Modular Energy Pioneer Nano Nuclear Begins Drilling First Reactor In Illinois

US modular nuclear technology pioneer, NANO Nuclear Energy, is hosting a milestone ceremony today at the University of Illinois Urbana-Champaign to mark progress on the research and prototype development of its KRONOS MMR Energy System, a micro nuclear reactor. The ceremony is being live streamed on the company's website here (or click on the image below). 

Event speakers include NANO Nuclear leaders Jay Yu, James Walker, and Florent Heidet, Ph.D., who will discuss the company’s strategy. Advisory Board Members Retired Vice Admiral Charles Leidig Jr. and Retired General Wesley Clark will address military and microgrid applications. 

As previously reported, amid the broader shift to advanced nuclear energy, NANO recently announced a key step in the commercialization of its KRONOS micro modular reactor, when it unveiled that drilling and site characterization would begin today. 

At a time when electricity bills are exploding across the country to feed AI data centers using conventional sources of electricity which are woefully insufficient to power the chatbot revolution, new technologies are coming online to power the grid at a much lower cost. 

Today's event highlights site and drilling work by AECOM, setting the stage for the future construction and operation of the MMR, a first-of-its-kind real-world demonstration for future academic, government, and commercial use.

Developed to meet the demand for "resilient, modular, and clean energy solutions for artificial intelligence and data centers, industrial projects, military applications, remote communities, and other commercial applications" Nano Nuclear, KRONOS is a stationary, high-temperature gas-cooled microreactor designed to deliver 15 MWe (45 MWth) of carbon-free power, for multi-decade use across multiple industries and environments.

NANO Nuclear expects to submit its construction permit application in early 2026, based on AECOM’s site data. Slides will be available at this link after the presentation.

The company says multiple units can be synergistically used to achieve any desired power level. The KRONOS MMR is being designed to shut down and remain in a safe state automatically without any human intervention or external power (so called “walk-away safety”) while seeking to ensure the ability to disconnect from the main grid and operate autonomously during outages or other disruptions.

Most importantly, the commercial launch of NANO's MMRs which allow for targeted electrification, should lead to substantially lower electricity prices at a time when everyone's powerbill seems to be doubling year after year...

Tyler Durden Fri, 10/24/2025 - 11:30

White House Stands Firm Against Obamacare As Shutdown Drags Into Fourth Week

As the government shutdown enters its 24th day with no end in sight, White House Deputy Chief of Staff James Blair says the Trump administration has no intention of backing down on the dispute at the heart of the impasse: the expiring enhanced Obamacare premium tax credits.

President Donald Trump at the White House on Oct. 14. Photo: Stefani Reynolds/Bloomberg

In an interview with Punchbowl News on Thursday, Blair - who oversees legislative, political and public affairs for President Trump - framed the credits as “subsidies to insurance companies,” signaling that the administration is unwilling to negotiate on their extension.

"These insurance subsidies, and to be clear, these are subsidies to insurance companies," Blair said. "They don’t actually go to people. They’ve been artificially masking the cost of premiums. OK? They put these in during the Covid era.… [Democrats] voted not once, but twice, to make this program temporary that we’re now discussing and for them to expire."

Blair accused Democrats of creating "a sideshow" around the subsidies “because they don’t want to admit there’s bigger issues that they’re not focused on,” and said it was Democrats who “set up this ticking time bomb to begin with.”

Republicans in Congress have long struggled to come up with an alternative to Obamacare for 15 years - however Blair suggested Trump intends to reopen that debate, saying the administration will push for a “broader overhaul” of health policy once the government reopens.

“We’re not just talking about Obamacare,” Blair said. “We’re not even talking about the repeal of Obamacare. We’re talking about making health care more affordable.… The president wants to make life affordable for people, he wants to make health care affordable for people. He’s been talking about this for years.… [O]pen the government. Let’s find a solution. Let’s figure out what we’re going to do together, but you have to open the government.”

According to Blair, the White House also plans to enlist pharmaceutical companies to “come to the table” to help reduce prescription-drug costs. Some Republicans are urging their leadership to use the party-line budget reconciliation process as the vehicle for such a health-care package, though Senate GOP leaders have shown little enthusiasm for what they call a “Reconciliation 2.0” effort.

Trump’s Political Operation Gears Up for 2026

Blair also discussed the president’s plans for the 2026 midterm cycle. He said Trump will draw from his own political war chest - hundreds of millions of dollars in available funds - to bolster Republican candidates and has already begun covertly spending in races across the country.

“It’s very important for the president that Republicans keep control of the House and Senate,” Blair said, pointing to what he called favorable “macro markers of the political environment,” including voter registration and polling trends.

Blair cited improvement in Sen. John Cornyn’s (R-TX) numbers ahead of a competitive primary and called Rep. Wesley Hunt’s entry into the Senate race a “wild card.” Trump, he said, would spend his own money “if it’s absolutely necessary” to keep the seat in Republican hands.

He also rejected skepticism from Indiana GOP leaders who doubt the legislature can pass a redistricting plan, saying, “I think we’ll see how Indiana continues to evolve, but I don’t think that’s a correct assessment.”

Shutdown Stalemate Deepens

Meanwhile, Congress remains at a standstill as the shutdown enters its fourth week. The Senate adjourned until Monday, virtually guaranteeing another lost weekend of negotiations.

Senate Majority Leader John Thune (R-SD) is considering votes next week on narrow measures to fund military pay and air-traffic-control operations in an effort to pressure Democrats. Speaker Mike Johnson (R-LA) has refused to bring the House back until Democrats agree to broader government-funding terms.

On Thursday, Senate Democrats blocked a bill from Sen. Ron Johnson (R-WI) that would have paid federal employees working without pay, arguing it would give the White House too much discretion. A Democratic alternative from Sen. Chris Van Hollen (D-MD) also failed.

Thune said he was open to combining the proposals but blamed Democrats for prolonging the impasse. “I can’t explain the level of dysfunction on their side right now,” he said. “But they’re consistently shifting their messaging, which, to me, suggests they really don’t know how to get out of this right now.”

A Johnson spokesperson said the senator “will work diligently and in good faith to find agreement between the two sides in order to pay federal workers during the shutdown.”

Political Fallout and the 2026 Landscape

The standoff is already reshaping political calculations heading into 2026. Sens. Jon Ossoff and Raphael Warnock of Georgia joined Sen. John Fetterman (D-PA) in voting for Johnson’s bill - making them the only Democrats to back it.

Ossoff, viewed as one of the most vulnerable Democrats facing reelection, cited the impact on Georgia’s large federal workforce and major installations, including Hartsfield-Jackson Atlanta International Airport and the Centers for Disease Control and Prevention.

Republicans seized on his record. “Jon Ossoff could’ve easily voted to reopen the government and pay Georgia workers any of the 12 times he voted to keep it closed,” said NRSC spokesperson Nick Puglia.

Warnock defended the Democratic position, arguing Republicans are “holding federal workers hostage.”

Tyler Durden Fri, 10/24/2025 - 11:05

After A Decade Of Bitching About Bitcoin... JPMorgan Reportedly Plans To Allow Crypto As Collateral

JPMorgan CEO Jamie Dimon has been nothing if not consistent in his views on cryptocurrencies over the past decade:

• Jan 2025: DIMON SAYS BITCOIN HAS NO INTRINSIC VALUE - https://x.com/zerohedge/status/1878814714698080427

• Jan 2024: DIMON: PERSONAL ADVICE WOULD BE DON'T GET INVOLVED WITH BITCOIN - https://x.com/zerohedge/status/1747596221953265821

• Dec 2023: DIMON SAYS HE WOULD CLOSE DOWN CRYPTO IF HE WAS THE GOVERNMENT - https://x.com/zerohedge/status/1732446151427690752

• Oct 2022: JPMORGAN CEO DIMON SAYS CRYPTO TOKENS LACK VALUE - https://x.com/zerohedge/status/1580625511856091136

• Sept 2022: DIMON TELLS CONGRESS MEMBERS CRYPTOCURRENCIES ARE PONZI SCHEMES - https://x.com/zerohedge/status/1572672056113733639

• Nov 2020: DIMON: I'M NOT INTERESTED IN BITCOIN, NOT MY CUP OF TEA - https://x.com/zerohedge/status/1329075459477311489

• Sept 2017: "I'D FIRE ANY JPM TRADER CAUGHT TRADING BITCOIN IN A SECOND FOR BEING STUPID" - https://x.com/zerohedge/status/1747597312333959438

But now, according to Bloomberg, citing people familiar with the matter, JPMorgan plans to allow institutional clients to use their holdings of Bitcoin and Ether as collateral for loans by the end of the year.

The offering would store clients’ Bitcoin and Ether holdings through a third-party custodian, according to people who spoke to the news outlet.

As CoinTelegraph's Zoltan Vardai reports, if confirmed, the development could make the two leading cryptocurrencies more attractive for institutional investors, akin to the historic approval of the first US spot Bitcoin exchange-traded fund (ETF) in January 2024.

A spokesperson for JPMorgan declined to comment.

The report follows months of speculation that JPMorgan could soon accept Bitcoin and Ether ETFs as collateral.

JPMorgan continues crypto push

JPMorgan has been considering cryptocurrency-collateralized loans since at least July, when the first reports on this matter emerged.

Still, the Financial Times previously reported that adopting Bitcoin and Ether as collateral assets may not occur until 2026.

JPMorgan was among the first US banks to venture into crypto. In 2020, it launched JPM Coin, a dollar-pegged stablecoin. In 2024, the bank reported holding shares of different spot Bitcoin ETFs.

The early integration came despite JPMorgan’s CEO previously expressing criticism of digital assets.

In 2018, Dimon said he had no interest in cryptocurrencies.

In 2022, he called digital assets “decentralized Ponzi schemes,” but commented positively on blockchain and smart contract technology.

Lately, Dimon has moderated his stance somewhat, while remaining skeptical.

“I don’t think we should smoke, but I defend your right to smoke,” Dimon said at JPMorgan’s investor conference in May.

“I defend your right to buy Bitcoin, go at it.”

The investment bank also expressed interest in stablecoins during an earnings call on July 15, when CEO Jamie Dimon said they planned to be involved in stablecoins to better “understand” this emerging asset class. 

Tyler Durden Fri, 10/24/2025 - 10:45

Trump Denies Report Suggesting US Deployed B-1 Bombers Near Venezuela

Despite Wall Street Journal reports, based on open-source flight tracking data, President Trump said that reports claiming the U.S. military deployed B-1 bombers near Venezuela to intensify military pressure on the South American nation were false.

Two U.S. B-1B Lancer bombers flew a Caribbean patrol today, entering Venezuela’s ADIZ and nearing within 80 km of the coast, briefly switching off transponders in what appeared to be a strike simulation.

The mission follows earlier B-52 and F-35 flights near Venezuela this… pic.twitter.com/Sz3nQNlya2

— Clash Report (@clashreport) October 23, 2025

As Aldgra Fredly reports below for The Epoch Times, Trump was responding to a reporter’s question on recent reports claiming that two B-1 Lancer bombers took off from Dyess Air Force Base in Texas on Oct. 23 and headed toward the coast of Venezuela.

The president denied that any such deployment had occurred.

“No, it’s not accurate. It’s false. But we’re not happy with Venezuela for a lot of reasons, drugs being one of them,” Trump told reporters following a roundtable with administration officials at the White House.

Trump also noted that “sea drugs”—referring to drugs smuggled into the United States by sea—have been largely stopped, claiming they are now “like five percent of what they were a year ago.”

But the president warned that drug cartels may shift to land routes as sea-based drug smuggling declines.

“So now they’re coming in by land. And even the land is concerned because I told them, that’s going to be next, you know, the land is going to be next,” he said.

“And we may go to the Senate, we may go to Congress and tell them about it. But I can’t imagine they'd have any problem with it.”

Since September, the U.S. military has conducted lethal strikes against boats in the Caribbean Sea that U.S. officials said were carrying illegal drugs to the United States.

Secretary of War Pete Hegseth said on Oct. 23 that the U.S. military conducted a “lethal kinetic strike” on a vessel suspected of narco-trafficking in the Eastern Pacific, killing two suspected drug traffickers onboard.

In a post on X, Hegseth said the vessel was carrying narcotics while transiting along “a known narco-trafficking transit route” in the Eastern Pacific.

He later posted another statement on X, saying the U.S. military carried out a second lethal kinetic strike on a suspected narco-trafficking vessel in the Eastern Pacific, killing three suspects onboard.

No U.S. forces were injured in either operation. The strikes raised the total number of vessel attacks by the U.S. military in the waters near the United States to nine amid rising tensions with Venezuela and Colombia.

“These strikes will continue, day after day. These are not simply drug runners—these are narco-terrorists bringing death and destruction to our cities,” Hegseth stated. “We will find them and kill them, until the threat to the American people is extinguished.”

The U.S. military had previously deployed F-35 stealth fighters to a Puerto Rico airbase and warships to conduct operations in the Caribbean, aiming to combat drug trafficking into the United States.

Trump has accused Venezuelan leader Nicolás Maduro of involvement in drug trafficking, which Maduro and Venezuela’s ruling regime have rejected.

Last week, Trump said he had authorized covert CIA operations in Venezuela, citing two main reasons: Venezuela had sent prisoners into the United States and the regime’s involvement in drug trafficking.

“They have emptied their prisons into the United States of America. ... They came in through the border. They came in because we had an open border,” he told reporters in the Oval Office on Oct. 15.

Venezuela later responded to Trump’s comments, saying they were a violation of international law and an effort to effect a “regime change” in pursuit of oil resources.

“Our Permanent Mission to the U.N. will raise this complaint with the Security Council and the Secretary-General tomorrow, demanding accountability from the United States government,” Venezuela said in a statement released by Foreign Minister Yván Gil on his Telegram account.

 

Tyler Durden Fri, 10/24/2025 - 10:30

Overnight Drone Attack Hits Moscow High-Rise As Putin Warns Of 'Overwhelming' Response

Ukrainian drones have once again reached the Moscow area, far away from the border, at a moment the Kremlin is strongly warning against Washington allowing the transfer of US Tomahawk missiles to Kiev.

The attack on a Moscow suburb was part of a broader wave of overnight drone attacks which hit multiple regions across the country, injuring at least five people, including a child, when one drone slammed into an apartment building near Moscow.

Via Telegram

According to Moscow region Governor Andrei Vorobyov, the drone hit a 14th-floor apartment in a high-rise building in the city of Krasnogorsk, northwest of the capital.

According to Moscow region Governor Andrei Vorobyov, the drone hit a 14th-floor apartment in a high-rise building in the city of Krasnogorsk, northwest of the capital.

Four adults were hospitalized with head injuries, fractures, and shrapnel wounds, and a boy suffered minor injuries in the attack. Circulating photos showed blown-out walls in an apartment. 

Russia's Defense Ministry said that air defense forces intercepted and destroyed over 110 Ukrainian UAVs over 13 regions overnight. Several drones were also shot down as they approached the capital.

Ukraine appears to be feeling emboldened, as it has had a series of 'wins' on a global stage given this week's new US and EU anti-Moscow sanctions. This new attacked marked the second consecutive night which saw more than 100 drones assault Russian territory.

Power outages resulted in some Russian areas, particularly the Rostov region, and drone impacts were reported also in Bryansk, Kaluga, Tula, and Tver.

Meanwhile President Vladimir Putin has warned in the face of new sanctions and the potential for new long-range weapons including Tomahawk missiles to be given to Ukraine that Moscow stands ready to respond with an "overwhelming" force:

"Dialogue is always better than confrontation or any disputes, and especially war. We have always supported the continuation of dialogue," Putin told journalists. 

But if Russia was attacked with US Tomahawk missiles, which Ukraine seeks, the response would be "very strong, if not overwhelming. Let them think about it," he added. 

So far Trump appears to have resisted Zelensky's and Europe's urging on this front, but shown willingness to later reverse his decisions on such Ukraine war-related issues.

Via AFP

Putin has also responded to the new US sanctions on Russia's two largest oil firms, declaring the energy sector is 'confident' in the face of such 'unfriendly' actions. He said the new actions taken by Washington and Brussels "will have certain consequences, but they will not significantly affect our economic well-being." He's essentially once again shrugging them off.

Tyler Durden Fri, 10/24/2025 - 10:15

"In Reality, It's All Over": French Socialists Threaten To End PM Lecornu's Term (Again) Over Budget Showdown

The French blue-chip CAC 40 is lower on the session, and the spread between 10-year French and German yields has widened, signaling that the political turmoil is far from over.

On Friday, France's Socialist Party threatened to sink Prime Minister Sébastien Lecornu's minority government as soon as next week unless the 2026 budget includes 15-20 billion euros in additional taxes. Without Socialist support in parliament, no-confidence motions would likely pass, toppling the government.

"If in the coming hours, basically until next Monday, there is no clear change to the text, there would be no margin for maneuver on the budget bill or the social security bill, so it would in reality all be over," Socialist leader Olivier Faure stated on the 24-hour French news television channel BFM television, earlier today.

S’il n’y a pas d’évolution sur les budgets de l’État et de la Sécurité sociale pour plus de justice sociale et fiscale d’ici lundi, les socialistes voteront contre et censureront ce gouvernement.

On ne peut pas demander aux retraités, aux malades, aux jeunes, aux classes… pic.twitter.com/GK79MMXn5F

— Olivier Faure (@faureolivier) October 24, 2025

Bloomberg noted, "The threats from the Socialist party chief come as the group treads a tricky line between getting more out of Lecornu on fiscal plans while avoiding fresh elections. The ouster of yet another premier would likely result in a snap legislative vote, in which polls suggest Socialists would fare poorly."

At the beginning of the week, UBS analyst Simon Penn told clients that Lecornu "might not make it until year-end." With how things are going this week, he might not make it until the end of next week.

Here is what Penn told UBS clients:

French PM Lecornu Might Not Make It Until Year-End

Political advisory group Forefront isn't convinced French Prime Minister Lecornu will remain in office until the end of the year.

His basic problem is the same one that each of his predecessors has faced - he is going to struggle to pass a budget.

The Socialists were clear last week: they were willing to lend their support to get Lecornu through confidence votes, but that didn't mean they supported his budget proposals. Forefront noted that the first thing Lecornu will need to do is enact the suspension of pension reform. He might be able to get that through the National Assembly, but the right-leaning Senate is opposed. If it fails in the Senate, it will go to a joint committee, and since that has a center-right bias, a decision to suspend pension reform will likely hinge on a raft of other requirements. This brings it full circle - the National Assembly is unlikely to accept those.

Odds on the cryptocurrency-based prediction market Polymarket show 13% that Lecornu is out by the end of next week. About 12 hours ago, these odds were 4%. Odds for Lecornu's ouster by the end of the year jumped from 37% to as high as 51% on Friday.

In regional bond markets, France's 10-year yield premium over Germany widened to 81 basis points on Friday, the highest in 10 days, according to Bloomberg data. This remains below the 89 basis point peak during Lecornu's resignation, but it indicates that markets are beginning to price in greater uncertainty ahead of next week.

Modest selling pressure on CAC 40...

And next week may bring fireworks in French politics.

*  *  *

Tyler Durden Fri, 10/24/2025 - 09:00

Futures Rise Ahead Of Key CPI Print

US equity futures are higher ahead of a Trump-blessed CPI print that is broadly expected to print in line or lower than expected, with optimism growing the meeting planned for next week between Trump and Xi will succeed in reducing trade tensions. With the wait nearly over for inflation data that’s will be key for the Fed’s to justify a rate cut next week, as of 8:00am S&P futures are 0.3% higher and Nasdaq futures gain 0.4%. Pre-market, Intel soared 8% after an upbeat revenue forecast. Ford gained 3% after signaling it will largely bounce back next year from a devastating fire that hobbled a key supplier. Newmont slumped after the precious-metals miner’s guidance disappointed investors.Mag 7 names are mostly higher led by GOOGL and NVDA. 10Y bond yields are fractionally higher, just above 4.0% as the USD trades near session highs. Commodities are mixed: base metals are outperforming, while precious metals are lagging and gold slides by about $100 to $4,050. Incremental macro news since Thursday’s close were mostly muted, but earnings announcements were mostly positive. Trump announced that all trade talks with Canada are finished over what he called a deceptive video ad featuring Ronald Reagan disapproving of tariffs. Today, the key focus will be CPI release at 8:30am ET and PMIs at 9:45am ET.

In premarket trading, Mag7 stocks are mostly higher (Alphabet +1.2%, Nvidia +0.6%, Microsoft +0.1%, Meta Platforms +0.4%, Apple +0.3%, Amazon -0.1%, Tesla -0.5%)

• Booz Allen (BAH) falls 8% after the defense contractor cut its adjusted earnings per share guidance for the full year.
• Deckers Outdoor (DECK) falls 12% after the owner of the Ugg and Hoka brands forecast 2026 net sales below the average analyst estimate. Analysts note the management annual outlook might be conservative.
• Ford Motor Co. (F) climbs 4% after the company reported third-quarter results that included a beat on profit and as traders weigh a 50,000 unit boost to pickup truck production against a $1.5 billion-$2 billion hit to Ebit from the Novelis aluminum plant fire.
• HCA Healthcare (HCA) rises 2% after boosting its revenue forecast for the full year
• Intel (INTC) gains 7% after the chipmaker returned to profitability and gave an strong revenue forecast, indicating signs of a comeback gaining traction.
• Mohawk Industries (MHK) falls 4% after the flooring manufacturer provided a disappointing fourth quarter earnings outlook.
• Newmont (NEM) is down 7% after the precious metals miner guided attributable gold production for 2026 that’s expected to be within the same guidance range provided for 2025.
• NEXTracker (NXT) is up 13% after the renewable energy equipment company reported adjusted earnings per share for the second quarter that beat the average analyst estimate.
• Procter & Gamble (PG) climbs 2% after reporting better-than-expected sales for its latest quarter as consumers snapped up the company’s Gillette razors and Secret deodorant.

Overnight, Trump said he is halting all trade talks with Canada for its “egregious behavior” over an ad comprising clips from a 1987 address by former President Ronald Reagan in which he defended free trade and slammed tariffs as an outmoded idea. At the same time, Trump has already been talking up the prospects for a trade deal with China, dangling an extension to the pause on higher tariffs on Chinese imports in exchange for a resumption of China’s purchases of American soybean, a crackdown on fentanyl and Beijing backing off restrictions on rare-earth exports. China’s Commerce Minister sounds optimistic, too. 

Turning back to markets, Wall Street rediscovered an appetite for growth and momentum stocks, pushing indexes steadily higher during the back half of Thursday’s session. Confirmation came of a Trump-Xi sit-down next week, the first face-to-face meeting between the leaders of the world’s two biggest economies since Trump took back the keys to the White House in January. 

At 8:30 a.m. markets deprived of economic data by the US govt shutdown now in its 24th day (yet with everything still working just fine) will finally get a look into the trajectory of consumer prices, which the median estimate sees rising 3.1% for both headline and core. September’s CPI report should give the Fed a green light to cut interest rates next week (see our CPI preview). Into the CPI data, Fed-dated OIS, steady over recent weeks, almost fully price in 25bp rate cuts at the October and December policy meetings

“Whatever the print looks like, it won’t deter the FOMC from delivering a 25 basis-point cut next week, or at the December meeting, even if there will probably be some knee jerk volatility as the data crosses,” said Michael Brown, a senior research strategist at Pepperstone Group Ltd.

"The risk sits firmly with a topside surprise," said Nick Twidale, chief market analyst at AT Global Markets. A soft print is unlikely to impact Fed rate cut expectations at next week’s meeting or into 2026, he said

Next week is shaping up to be the busiest of this earnings season, with companies speaking for nearly 44% of the S&P 500’s market value slated to report. With earnings season approaching its apex, just 5% of companies in the S&P 500 Index that have released earnings this season so far have cut their forward guidance, a mere fraction of the 14% that did so by this stage of the reporting cycle in the past two quarters, according to data compiled by Citigroup.

The strong earnings season so far has helped markets to ride out geopolitical and trade tensions. With nearly quarter of the reporting done, year-on-year growth in earnings-per-share has been 4% in Europe and 14% in the US, better than expected, according to Barclays Plc strategists. The real test will come with big-tech results starting next week, they said. Alphabet Inc. and Meta Platforms Inc. are slated to report on Oct. 29 and Apple Inc. the day after.

“We do not think that we are out of the volatility period and market sentiment still feels fragile,” said Mohit Kumar, chief economist and strategist at Jefferies International Ltd. “Investor positioning has shown some signs of cleanup, but overall positioning still remains on the long side. Thus, we are keeping our low-risk mode for now, while maintaining our medium term bullish view.”

Europe's Stoxx 600 reversed an opening gain, now down by 0.1%, with real estate and utilities shares leading declines, while technology and financial services stocks outperformered. Among companies reporting earnings in Europe, French drugmaker Sanofi SA, UK lender NatWest Group Plc, Swiss cement producer Holcim AG and Swedish defense firm Saab AB gained after beats, as did automobile component maker Valeo. Aluminum supplier Norsk Hydro ASA, Dutch lights manufacturer Signify NV and elevator specialist Schindler Holding AG dropped after missing analysts’ estimates. Here are the biggest movers Friday:

• Valeo shares rise as much as 8.5% to their highest intraday since May 2024 after the French firm posted revenue for the third quarter that beat estimates
• Lifco gains as much as 11% after the Swedish industrial conglomerate reported better-than-expected third-quarter earnings, with organic revenue growth of 4.9% coming in well ahead of consensus estimates of 0.2%
• Saab gains as much as 7.8%, the most since July, after the Swedish defense firm boosted its full-year sales guidance as well as posted a sales and Ebit beat in the third quarter
• Safran shares fall as much as 2.1% as the engine manufacturer’s third guidance increase this year is already largely reflected in estimates, according to analysts. The stock remains close to all-time highs
• Sanofi shares rise as much as 5.2% to the highest since May 29 after the French drugmaker reported sales and profit for the third quarter that beat market expectations
• GSK shares drop as much as 3.3% in London. FDA approval of the British pharma company’s blood cancer drug for a later-than-expected treatment line raised concerns about the medicine’s sales potential
• Kering shares drop as much as 3.6%, pulling back from the highest since April 2024 as HSBC downgrades the luxury-goods company following a strong rally in the share price
• Sika shares fall as much as 2.8% after the specialty chemicals company reported results that were “worse than feared,” with sales declining 1.2% compared to last year — the first quarterly organic decline since 2020
• Schindler shares drop as much as 2.6%, after the elevator and escalator specialist posted a drop in order intake during the third quarter, which analysts at Bloomberg Intelligence said could drag on its recovery
• Bravida falls as much as 11%, the most since May, after the Swedish building installations group reported its latest earnings. DNB Carnegie says poor margins in its core Swedish market disappointed

Earlier in the session, Asian stocks advanced, as confirmation of a meeting next week between US President Donald Trump and his Chinese counterpart Xi Jinping bolstered investor mood. The MSCI Asia Pacific Index rose as much as 0.6%, on course to end a three-day losing streak. SK Hynix, Samsung Electronics and Alibaba were among the top contributors to the advance. Most markets were in the green, with notable gains in South Korea, Japan and China. Taiwan’s market was closed for a holiday. Hopes for a thaw in trade tensions are rising ahead of a planned meeting between Trump and Xi next Thursday on the sidelines of the Asia-Pacific Economic Cooperation summit. Chinese stocks got an extra lift from the nation’s renewed emphasis on technological self-reliance at a key political gathering this week. “The plenum confirms the market expectations of the next five years, and the recent signs of deescalation from both sides is supporting risk sentiment,” said Hao Hong, chief investment officer at Lotus Asset Management in Hong Kong. Elsewhere, South Korea’s Kospi rose 2.5% to touch a fresh high on gains in its big chipmakers. Japanese stocks also rose as Intel’s bullish sales outlook lifted semiconductor-related shares, including Advantest, and optimism increased over corporate earnings. 

In FX, the Bloomberg Dollar Spot Index rose 0.1%, on track for a 0.5% gain this week.  Overall, the dollar was bolstered as USD/JPY rose 0.3% to 153.06, after Japan’s finance minister signaled that it may be necessary to issue additional debt to fund Prime Minister Sanae Takaichi’s upcoming economic package. USD/CAD rose 0.3%, as the Canadian dollar took a hit after President Donald Trump said he would stop trade negotiations with Canada, citing a Canadian advertisement against US tariffs. 

In rates, treasuries hold small losses following Thursday’s sharp selloff triggered by jump in oil prices. US yields remain within 1bp of Thursday’s closing levels, the 10-year just over 4%, with Germany’s lagging by almost 3bp and UK counterpart outperforming slightly. European bonds are falling after resilient euro-zone PMI readings, bolstered by German private sector activity at the strongest since 2023. That overshadowed a miss for French PMIs, hit by the recent political turmoil. German 10-year yields are up by three basis points, French yields by four basis points. UK retail sales also beat estimates. Focal point of US session is the delayed September CPI release at 8:30am New York time. Next week’s Treasury auctions are on an accelerated and compressed schedule before the Oct. 29 FOMC decision, beginning Monday with 2- and 5-year notes sales and concluding with 7-year notes Tuesday

In commodities, gold prices down by $56 to $4,070/oz. Oil prices stable following the surge in the previous session, with Brent holding around $66/barrel.

US economic calendar calendar includes September CPI (8:30am), October S&P Global US PMIs (9:45am), September new home sales and October final University of Michigan sentiment (10am) and October Kansas City Fed services activity (11am).

Market Snapshot

• S&P 500 mini +0.3%
• Nasdaq 100 mini +0.5%
• Russell 2000 mini +0.4%
• Stoxx Europe 600 -0.1%
• DAX little changed, CAC 40 -0.4%
• 10-year Treasury yield +1 basis point at 4.01%
• VIX -0.2 points at 17.12
• Bloomberg Dollar Index +0.1% at 1214
• euro little changed at $1.161
• WTI crude little changed at $61.8/barrel

Top Overnight News

• Trump says talks with Canada off after ad invokes Reagan as free-trader: RTRS
• Former Bundesbank chief Axel Weber has warned the coming disruption from artificial intelligence could usher in the rise of a new global elite that profits disproportionately from the adoption of the cutting-edge technology while leaving the rest worse off" BBG
• Hobbled by US tariffs, carpet weavers in India's Kashmir struggle to stay afloat: RTRS
• After soaring as a global safe haven bet, the Swiss franc is wrapping up a volatile week against the euro with speculation the Swiss National Bank has intervened to curb the currency’s strength: BBG
• China’s New Strategy for Trump: Punch Hard, Concede Little: WSJ
• Investors Love Intel Again. That Still Doesn’t Solve Its Problems: WSJ
• Data-starved bond traders risk seeing the October rally in Treasuries spoiled by the key inflation figures they’ve been waiting for: BBG
• Strong Earnings Reassure Jittery, Data-Deprived Investors: WSJ
• White House Deputy Chief of Staff Blair made the case that, regarding the shutdown, US President Trump wants to spend time and political capital putting together a broader overhaul of healthcare. Blair says there will be a "number" of publicly traded pharmaceutical companies who’ll be “coming to the table” to “get the cost of prescription drugs down in the United States.”: Politico.
• A Turkish court dismissed a case that could topple the leader of the country’s main opposition party, offering relief to investors concerned about renewed political instability: BBG
• US states warn food aid benefits will halt if federal shutdown drags on: RTRS
• Fed has reportedly requested a formal consultation into a banking ruling around the treatment of cross-border loans for EZ banks: BBG
• JPMorgan to Allow Bitcoin, Ether as Collateral in Crypto Push: BBG
• Target to Eliminate 1,800 Roles, 8% of Headquarters Team: BBG
• Applied Materials to Cut 4% of Global Staff After Sales Slow: BBG
• Rivian Cuts About 600 Jobs in Latest Setback for EV Maker: BBG
• ConocoPhillips to Lay Off Canada Employees in November: Reuters
• Will India and China Be Able to Resist U.S. Sanctions on Russian Oil: WSJ

Trade/Tariffs

• US Trade Representative Greer is to travel to Malaysia, Japan and South Korea.
• South Korea's Industry Minister said South Korea wants the US investment package to be smaller than USD 350bln as part of the tariff deal, while it was separately reported that South Korea and the US remain far apart on key sticking points in trade negotiations, although some progress has been made, according to a senior presidential aide.
• China's Commerce Minister said regarding ties with the US, that dialogue and cooperation is the only right choice and can find a solution and correct way of coexistence. The minister also noted regarding FDI that they will not will not engage in zero-sum games in opening up and attracting investment, while they will further lower market access barriers to foreign investors.
• US President Trump posted "Canada has fraudulently used an advertisement, which is FAKE, featuring Ronald Reagan speaking negatively about Tariffs...They only did this to interfere with the decision of the U.S. Supreme Court, and other courts. TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behaviour, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED."
• Canada reportedly limits how many American vehicles Stellantis (STLAM IM) and GM (GM) can import tariff-free, while the move comes after companies dropped some Canadian production, according to CBC. Canada's government later confirmed significant reductions to import quotas of General Motors (GM) and Stellantis (STLA IM), reducing the annual remissions quotas for General Motors by 24.2% and for Stellantis by 50%.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher as the region took impetus from the rebound on Wall St, where energy names were underpinned amid surging oil prices and with the improved risk sentiment also facilitated by confirmation of a Trump-Xi meeting for next Thursday. ASX 200 lagged as gains in tech were offset by weakness in defensives and the top-weighted financials sector. Nikkei 225 rallied at the open and reclaimed the 49,000 status alongside a weaker currency, while the latest CPI data from Japan printed mostly in line with forecasts but showed an acceleration in the headline and core figures. Hang Seng and Shanghai Comp conformed to the upbeat mood following confirmation of a Trump-Xi meeting next week, although gains were capped as it was also reported that the US is to probe China's 2020 trade deal compliance, while an investigation could be announced on Friday.

Top Asian News

• Chinese President Xi said China’s development is facing both strategic opportunities and challenges, while he added that China should comprehensively promote the integrated development of education, science, and technology talent, as well as strive to break through key core technologies, according to Xinhua.
• China's NDRC head said the economy relies on the real economy to move towards the future, and noted that strong domestic demand is strategic underpinning for China's modernisation. NDRC head also stated that there is room and potential for China to expand domestic demand and they will implement some major investment projects, improve the structure of government investment and increase the proportion sent to people's livelihoods. Furthermore, they will expand economic policy space during the next five years, will prevent improper government intervention in the economy and will increase coordination of macroeconomic policies.
• China's Deputy Head of Office of Financial and Economic Affairs Commission said the external environment is uncertain and unstable, but noted the economy is on a solid foundation and fundamentals supporting long-term growth remain unchanged, while it was stated that they must move faster to implement a new development paradigm.
• China's Science and Technology Minister said regarding AI, that they will accelerate development and seek breakthroughs, as well as step up efforts on the top-level design of artificial intelligence. China will also develop chips with high-level resources and will strengthen artificial intelligence governance, while it will step up efforts in quantum technology and biotechnology.
• Japan’s Finance Minister Katayama said they need to take into account various factors when asked regarding the possibility of raising financial income tax, while she added that monetary policy measures should be up to the BoJ and hopes the BoJ continues appropriate dialogue with markets. Furthermore, Katayama said she spoke with US Treasury Secretary Bessent for about 15 minutes via phone, while she told Bessent she wants to tackle various issues and will meet with Bessent next week.
• Japan's Prime Minister Takaichi says 'Economy first then fiscal policy' will be the foundation of the government's approach. Will not implement cash handout which was pledged during the upper House election due to lack of public understanding. Aims to pass legislation in the current diet session to abolish provisional gasoline tax rate. To provide assistance for electricity, gas bills during winter. Launching a Japanese growth strategy council to expand the economy.

European equities (STOXX 600 -0.2%) are softer after initially opening with upside. European market sentiment has failed to follow APAC and Wall Street where the tone was supported after confirmation of next weeks Xi and Trump meeting. There’s been no clear macro driver for the recent losses. European sectors have opened slightly negative this morning. Technology (+0.9%) takes the top spot, with sentiment boosted by post-earning strength in Intel (+8.3%). Financial Services is in second place driven by gains in LSEG (+4.3%) after a broker upgrade from JP Morgan. Real Estate is found at the bottom of the pack.

Top European news

• Turkish court ruling permits the opposition leader to stay.

FX

• USD is marginally firmer today, as traders digest a slew of trade-related updates and ahead of the much-awaited delayed US CPI report for September. DXY is currently in a 98.89-99.10 range. In brief, consensus looks for headline CPI to rise +0.4% M/M (prev. 0.4%), with the annual rate seen rising to 3.1% Y/Y (prev. 2.9%). On the trade front, the White House confirmed that the POTUS will meet a number of Asian leaders next week, namely Chinese President Xi on Thursday. It was also reported that Trump said he thinks he will come out well from the meeting with Xi.
• Up the northern border, Trump cancelled all trade negotiations with Canada, due to anti-tariff ads. In an immediate reaction, USD/CAD moved higher by 25 pips to 1.4030 from 1.4005 over two minutes; currently trading around 1.4028. ING suggests that the BoC would be more likely to deliver a 25bps cut at next week’s meeting, given how much trade uncertainty/existing tariffs are weighing on Canadian businesses.
• EUR is essentially flat/modestly lower vs the Dollar. Focus today has been on a slew of PMIs. Starting by way of release order; France was subdued, Germany upbeat and EZ-wide metrics also resilient. Delving into price action in detail, a slight tick lower in the Single-Currency on the downbeat French metrics, but then jumped higher and made fresh highs on the German figures, rising from 1.1607 to 1.1628. The pair has gradually cooled from those highs since.
• JPY is the marginal G10 underperformer today, continuing the pressure seen in the APAC session. USD/JPY is currently trading at the upper end of a 152.47-153.06 range; peak marks a fresh WTD high and now approaching last week’s best at 153.27. Focus for the region has been on inflation, whereby Japan’s National CPI Y/Y rose from the prior (in-line with expectations); the core figure also rose (as expected), whilst the super-core metric fell more-than-expected. From a policy perspective, the elevated inflation figures play in favour of a hike for the BoJ; ING opines that the ongoing US-China trade spat will keep the BoJ wary of hiking rates in October, and instead favour December.
• GBP is modestly lower vs the Dollar. Focus for the UK today was on Retail Sales, which topped analyst expectations; headline M/M +0.5% (exp. -0.2%), the Ex-Fuel figure cooled from the prior but not as much as expected. Thereafter, Cable slipped from those levels heading into the PMI metrics, which were overall resilient; Services ticked a little higher, whilst Manufacturing topped the most optimistic of analyst expectations. The accompanying report suggested that “Companies are clearly treading cautiously in terms of spending, investment and hiring ahead of the upcoming Budget”. Overall, Cable lifted from 1.3302 to 1.3321; the midpoint of the day’s range. On the Budget, it was reported that Chancellor Reeves is mulling raising income tax at next month's budget, according to The Guardian.
• Antipodeans are modestly lower vs USD, after trading with modest gains overnight, which was facilitated by the generally positive risk tone. However, this has subsided a touch in recent trade. AUD/USD trades in a 0.6641-0.6707 range, and within the confines of this week’s range; NZD/USD trades in a 0.5743-0.5759 range, the high for the day just shy of the WTD best at 0.5761 and then the 21 DMA at 0.5763 thereafter.

Fixed Income

• USTs are contained overnight despite a handful of trade updates, with USTs very much waiting for the upcoming US September CPI report. A series that is being released, despite the shutdown, to facilitate social security adjustments. Consensus looks for headline CPI to rise +0.4% M/M (prev. 0.4%), with the annual rate seen rising to 3.1% Y/Y (prev. 2.9%). The core rate is expected to rise by +0.3% M/M (prev. 0.3%), with the annual rate of core inflation seen unchanged at 3.1%. Elsewhere, we await updates on the trade front. Firstly, a potential investigation into China’s adherence with Section 301 terms from Trump’s first term. Secondly, further details on Thursday’s upcoming Trump-Xi meeting. Finally, relations between the US and Canada have deteriorated significantly with Trump stopping discussions following the release of a Canadian tariff video.
• Bunds were contained early doors, holding just under the 130.00 mark. Thereafter, the softer-than-expected French PMIs pushed the benchmark to a 130.07 peak and also lifted OATs to a 123.06 high. However, this peak proved short-lived as the subsequent German measures came in firmer than expected across the board and eclipsed the forecast range. The German metrics sent Bunds down by c. 30 ticks at the time, a move that has since extended to a 129.50 base following the EZ figure.
• OATs underperforming vs peers. After-hours Moody’s will be reviewing France. Currently, Moody’s has France at Aa3 and is the last of the big-three to have a double-A rating on France; after S&P cut in an unscheduled move last Friday and Fitch earlier on. In politics, PS leader Faure spoke to BFM this morning and outlined that they are yet to see any signs of compromise from the government over an ultra-rich tax measure, and if there is no change by Monday then “it’s all over”; implying that they would submit a no-confidence motion, unless progress is made on taxing the wealthiest in society.
• A firmer start to the day for Gilts, but only by a few ticks. Thereafter, Gilts followed EGBs lower following the German and EZ figures before coming under more pressure and slipping to a 93.41 low in the wake of better-than-expected Flash UK PMIs. A series that confirms the relatively ok performance of the economy and corroborates the recent cooler-than-expected CPI report; furthermore, it chimes with the view of uncertainty ahead of the November Budget. On the point of data, this morning’s surprisingly strong retail sales figures spurred a slight hawkish reaction in November pricing, trimming the odds of a cut to c. 21% (pre-release c. 35%) but had no impact on December pricing; in sum, chiming with the above view on the BoE’s near-term trajectory. Elsewhere, we remain attentive to reports in UK press that Chancellor Reeves is said to be considering breaching a manifesto pledge and raising income taxes. However, a UK minister has since pushed back on this.
• China to issue up to USD 3bln of USD-denominated sovereign bonds in Hong Kong, during the first week of November.

Commodities

• Crude benchmarks are taking a pause following Thursday’s drive higher as the US placed sanctions on Russian oil companies. APAC trade was muted, with WTI and Brent trading in a tight USD 0.60/bbl range before slightly extending to a peak of USD 62.13/bbl and USD 66.30/bbl respectively as German and UK PMIs came in better-than-expected, but then pulling back modestly. Currently, benchmarks are off best and somewhat rangebound. Late in Thursday’s session, a White House official said a Trump-Putin meeting is not completely off the table and states that the US President has not seen enough action from Russia towards peace.
• Spot XAU is currently being weighed on as bond yields rise globally, reversing Thursday’s gains. XAU rose to USD 4144/oz early in the APAC session before gradually falling to a low of USD 4047/oz as the European session got underway.
• Base metals followed on Thursday’s rally as copper supply concerns come at a time of broad optimism over demand and a Trump-Xi meeting on the horizon. 3M LME Copper oscillated in a tight c. USD 65/t range during the APAC session, forming a low at USD 10.8k/t, before extending the prior week’s high and peaking at USD 10.97k/t as the red metal nears key USD 11k/t price point. Prices are currently off best levels, with 3M LME Copper pulling back to USD 10.89k/t.

Geopolitics: Middle East

• US President Trump said regarding Israel, that it will not be doing anything with the West Bank.

Geopolitics: Ukraine

• EU leaders failed to back a EUR 140bn loan to Kyiv using frozen Russian state assets following opposition from Belgium, according to FT.
• EU's Costa said discussions at the EU summit showed a reparation loan for Ukraine is feasible, while he added that discussions with the ECB and Eurogroup presidents showed the reparation loan proposal is in line with European and international law. It was also reported that Belgium's Prime Minister said Belgium does not want one euro of money returned to Russia, and on the legality of the reparation loan idea, it is not clear and it is a matter that needs to be solved. Furthermore, German Chancellor Merz said regarding Russian frozen assets that he assumes all EU countries will take part and it is complicated because there is no blueprint for such a step, as well as stated regarding Russian jets violating Lithuania's airspace, that it is a further provocation and they will react with a sense of proportion.

Geopolitics: Other

• US President Trump said reports that B-1 bombers flew near Venezuela are not accurate, while he added that China is using Venezuela for Fentanyl smuggling. Furthermore, he said they will be seeing land action in Venezuela soon and may go to Congress about targeting land drugs.

US Event Calendar

• 8:30 am: Sep CPI MoM, est. 0.4%, prior 0.4%
• 8:30 am: Sep Core CPI MoM, est. 0.3%, prior 0.3%
• 8:30 am: Sep CPI YoY, est. 3.1%, prior 2.9%
• 8:30 am: Sep Core CPI YoY, est. 3.1%, prior 3.1%
• 9:45 am: Oct P S&P Global U.S. Manufacturing PMI, est. 52, prior 52
• 9:45 am: Oct P S&P Global U.S. Services PMI, est. 53.5, prior 54.2
• 9:45 am: Oct P S&P Global U.S. Composite PMI, est. 53.45, prior 53.9
• 10:00 am: Sep New Home Sales, est. 708k, prior 800k
• 10:00 am: Sep New Home Sales MoM, est. -11.5%, prior 20.5%
• 10:00 am: Oct F U. of Mich. Sentiment, est. 54.5, prior 55

DB's Jim Reid concludes the overnight wrap

Geopolitical news dominated markets over the past 24 hours. Concerns over the impact of new US sanctions on Russia oil saw Brent crude post its largest two-day jump since 2022, which drove a sell-off in government bonds with 10yr Treasury yields posting their biggest rise in over a month (+5.1bps) ahead of today’s delayed September CPI print. More positively, White House confirmation of a meeting between Trump and Xi next week helped ease recent trade fears. Combined with improved tech optimism, this boosted risk assets, as the S&P 500 rose +0.58% while in Europe the STOXX 600 (+0.37%) reached a new all-time high.

Starting with oil, markets wrestled with the impact of sanctions announced by the US against Russia’s two largest oil companies the previous evening, in particular how these will impact oil flows to China and India, which have been the main buyers of Russia’s crude exports. Reports yesterday pointed to initial disruption, with Bloomberg reporting that Chinese state oil majors have suspended seaborne Russian oil purchases due to concerns about Western sanctions, while Reuters reported that Indian refiners are poised to sharply cut imports of Russian oil. Also the EU yesterday approved its new Russia sanctions package, which targets some Chinese entities for buying Russian oil and tightens restrictions on transactions with Russia’s largest state-owned oil producers. Our view is that while the new US sanctions are likely to disrupt Russia’s oil exports in the near-term, especially to India, the medium-term impact will depend on ongoing enforcement and adaptation. Indeed, looking at previous restrictions on Russia’s oil exports, their impact typically faded after a few months. In response to the new US sanctions, Russia’s President Putin downplayed the impact on Russia’s economy and criticised the impact on global energy markets but suggested that his meeting with Trump was delayed rather than cancelled.

With all said and done, Brent crude prices spiked by +5.43% yesterday to $65.99/bbl. Following Wednesday’s +2.07% rise, this marks the largest two-day jump since April 2022, when oil markets were in turmoil following Russia’s February 2022 invasion of Ukraine. Meanwhile, the geopolitical noise helped gold prices find a firmer footing (+0.68%) after falling by nearly 6% over the previous two sessions.

The rise in oil prices led to a sizeable sell-off in government bonds. In the US, Treasury yields moved higher across the curve, with 10yr yields posting their largest rise in over a month (+5.1bps) back to 4.00%, while 2yr yields rose +4.6bps to 3.49%. That said, while breakevens rose, it was real yields that saw the larger increase, suggesting some broader correction of the recent Treasury rally ahead of today’s delayed CPI print. In Europe, 10yr bund (+2.0bps) and OAT (+2.7bps) yields saw a more moderate increase, while gilts (+0.6bps) outperformed.

The other major geopolitical news came with the White House saying that President Trump will meet with China’s President Xi next Thursday (October 30) on the sidelines of the APEC summit, which buoyed hopes of a détente between the world’s two largest economies. This would be the first in-person meeting between the two leaders since Trump returned to office in January and comes as the current 90-day US-China tariff truce is due to expire on November 10. Meanwhile, we’ve seen negative news on US-Canada trade overnight, with Trump posting that “ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED”, in an apparent response to an advertisement against tariffs funded by the government of Ontario.

Easing US-China fears supported an overall risk-on mood, with the S&P 500 (+0.58%) yesterday closing less than a quarter of a percent from its all-time high. The NASDAQ (+0.89%) was helped by a rebound in chip stocks, as the Philadelphia Stock Exchange Semiconductor Index rose +2.54%. That advance was supported by a WSJ story Wednesday night that the Trump administration was considering taking equity stakes in domestic quantum-computing firms, with Rigetti Computing later saying that it is in ongoing talks with the US government on funding. Recovery for the Mag-7 (+0.88%) was led by Tesla (+2.28%), which saw a spectacular intra-day move after falling as much as -5.71% just after the open following its earnings release that we discussed yesterday. So a buy-the-dip mentality holding strong in the US. The positive mood also carried over to Europe, where the STOXX 600 (+0.37%) and the FTSE 100 (+0.67%) reached new record highs, while the DAX (+0.23%) and CAC (+0.23%) also advanced.

The positive equity market mood has continued in Asia this morning, with the Trump-Xi meeting announcement alleviating concerns on trade. The KOSPI (+2.22%) is leading the gains across the region, posting a new intraday record, while the Nikkei is also strongly higher (+1.50%). Amid Chinese equities, the Hang Seng (+0.59%), the CSI (+0.66%) and the Shanghai Composite (+0.42%) are all seeing decent gains as the CCP released more details on China’s new five-year economic plan focusing on advanced manufacturing, technological self-sufficiency, and enhanced domestic demand. US equity futures are also higher, with the NASDAQ 100 (+0.30%) futures outperforming the S&P 500 (+0.19%) following an upbeat revenue outlook from chipmaker Intel.

On the data front, in Japan core consumer prices rose by +2.9% year-on-year in September (vs +2.7% August), though the 'core-core' measure, which excludes both food and energy, was a touch below expectations at +3.0% (vs +3.1% expected; +3.3% in August). Meanwhile, the flash PMIs in Japan show manufacturing activity declining to its lowest level in 19 months in October (48.3 vs 48.5 previous). The services PMI also slowed, albeit to a still solid 52.4 (vs 53.3 previous). With this backdrop, 10yr JGB yields are -1.4bps lower this morning at 1.66%, while the Japanese yen (-0.21%) is extending its decline against the dollar to a sixth consecutive session. Elsewhere, the flash October PMIs in Australia show a decline in manufacturing activity for the first time in ten months (49.7 vs 51.4 previous) though the services PMI rose from 52.4 to 53.1.

Looking ahead to today, we will get the postponed US CPI release for September at 8.30am EST (13.30 LDN) ahead of next week’s FOMC meeting. Our US economists expect headline CPI to come in at +0.42% m/m, which would push up the year-on-year rate to +3.1%, and be the strongest monthly print since January. For core CPI, they project +0.32%, or +3.1% year-on-year. Within the data, they’re still looking for signs of tariff impacts in core goods, with a focus on categories like apparel and new vehicles that haven’t yet seen a meaningful pass-through. See their full preview here.

In terms of yesterday’s data releases, the shutdown-affected calendar saw US existing home sales post a slight uptick in September to their highest in 7 months (+1.5% m/m as expected). In Europe, France’s INSEE business confidence survey (97 vs 96 expected) and Euro area consumer confidence (-14.2 vs -15.0 expected) were both a touch stronger ahead of today’s flash PMI prints. So data also providing some support to the higher-rates higher-equities backdrop.

To the day ahead now, we’ll get data including the global October flash PMIs, US September CPI, final October University of Michigan survey, UK September retail sales and France October consumer confidence. Central bank speakers include ECB’s Nagel, Cipollone and Villeroy. Notable earnings include Procter & Gamble, Sanofi, NatWest and Porsche. We also have Moody’s review of France’s credit rating.

Tyler Durden Fri, 10/24/2025 - 08:29

CZ Calls Peter Schiff's Tokenized Gold A 'Trust Me Bro' Asset

Authored by Amin Haqshanas via CoinTelegraph.com,

Binance co-founder and former CEO Changpeng “CZ” Zhao dismissed crypto critic Peter Schiff’s plan to launch a tokenized gold product, calling it a “trust me bro” asset.

In a Thursday post on X, CZ said tokenized gold is not onchain gold, but a promise dependent on third-party custody.

“It’s tokenizing that you trust some third party will give you gold at some later date… even after their management changes, maybe decades later, during a war,” he wrote.

CZ’s comments came after Schiff, a long-time Bitcoin critic and gold advocate, announced plans on the ThreadGuy podcast to roll out a gold-backed token.

According to Schiff, users will be able to buy and store gold in a vault via an app, transfer ownership through a blockchain, or redeem it for physical gold.

He described it as an easier way to spend gold digitally, complete with debit cards linked to gold holdings.

CZ dismisses Schiff’s tokenized gold. Source: CZ

Bitcoin will eventually go to zero: Schiff

Schiff also maintained his decades-long stance that Bitcoin has no intrinsic value and will eventually “go to zero.” He said Bitcoin is a “gigantic pump-and-dump” driven by early adopters cashing out at the expense of newer investors.

“I still think it’s going to zero,” he said.

“What I underestimated was the gullibility of the public and the marketing savvy of those promoting it.”

Schiff also warned of a looming “sovereign debt crisis” that he believes will dwarf 2008, predicting hyperinflation, a collapse in US Treasury bonds and gold prices rising well beyond $4,000 per ounce.

He said the US dollar’s dominance as the world’s reserve currency is nearing its end, predicting that the global financial system will “inevitably return to gold.” Foreign central banks are already divesting from US Treasurys and quietly replacing their reserves with physical gold, marking a “monetary reset” similar to the post-Nixon 1970s, Schiff added.

Gold loses $2.5 trillion in market cap after record surge

Earlier this week, gold saw one of its sharpest crashes in decades, shedding about $2.5 trillion in value within 24 hours, according to The Kobeissi Letter.

The metal plunged 8% over two days, its worst decline since 2013, wiping out more market value than the entire Bitcoin supply.

The sell-off followed a period of rapid gains this year, when gold surged 60% as investors flocked to it amid inflation fears and global instability.

Tyler Durden Fri, 10/24/2025 - 08:05

Trump Versus Xi: A Blow-by-Blow Analysis Of The US–China Trade War

Authored by Antonio Graceffo via The Epoch Times,

The world’s two largest economies are once again battling for dominance.

In the latest exchange between U.S. President Donald Trump and Chinese leader Xi Jinping, Beijing is using financial markets as leverage in the trade war, betting that a sustained downturn might pressure Trump to compromise.

The Trump administration, however, has made clear it will not adjust its policies based on stock fluctuations, insisting negotiations will proceed only on terms that serve America’s economic interests.

This trade war is part two, a rematch of the contest fought between the two leaders.

What follows is a round-by-round look at how the renewed U.S.–China trade war is unfolding.

Round 1 (February–April)

Trump opened his second term with aggressive tariffs, imposing a 10 percent duty on all Chinese imports in February, citing trade deficits and fentanyl concerns. By early April, he escalated further, announcing sweeping reciprocal tariffs that sent rates on Chinese goods soaring to 145 percent, effectively an embargo.

Beijing countered with 125 percent tariffs on U.S. exports, targeting agricultural machinery, coal, and liquefied natural gas, while also launching an antitrust probe into Google, signaling its readiness to use regulatory power as a weapon.

Global markets plunged as recession fears grew and supply chains faltered. For months, investors and consumers held their breath, slowing the world economy. By midyear, talk of a truce surfaced, but neither side was ready to yield, leaving global commerce suspended in uncertainty as the trade war entered its next phase.

Round 2 (May)

After months of bruising exchanges, both sides met in Geneva, Switzerland. On May 12, the White House announced a “historic trade win”: tariffs would be cut by 115 percent, leaving a 10 percent baseline during a 90-day truce. The effective U.S. tariff on Chinese goods fell from 145 percent to 30 percent, while China’s rate on U.S. goods dropped from 125 percent to 10 percent.

The truce was extended twice, moving the deadline to Nov. 10. During this period, Trump struck new trade frameworks with other partners and added more Chinese companies to export control lists—42 in March and 23 in September. China’s exports to the United States fell 27 percent year-on-year in September, but overall exports dropped 8.3 percent as it diversified toward Europe and other markets.

In August, Trump approved Nvidia’s H20 chip sales to China in exchange for a 15 percent revenue cut. At around the same time, Washington expanded export restrictions, blacklisting thousands of Chinese companies.

Beijing retaliated in September by accusing Nvidia of antitrust violations, prompting Trump to tighten controls further by adding subsidiaries of already-sanctioned companies.

Round 3 (Late September)

On Sept. 19, Trump and Xi spoke by phone, and Trump said they agreed to meet at the APEC summit in South Korea in October. Beijing has yet to confirm whether Xi will attend.

Just days later, on Sept. 29, Washington again expanded its export control list, which substantially increased the number of Chinese entities affected.

Round 4 (Oct. 9)

Beijing retaliated by announcing sweeping export controls on rare earth elements, effective Dec. 1. The measures expanded licensing for 12 of the 17 rare earth metals and restricted the export of refining equipment and related technologies. Foreign companies would be required to obtain licenses for any product containing more than 0.1 percent Chinese rare earth content, with all military-related exports outright banned.

China controls roughly 70 percent of global rare earth mining and an estimated 93 percent of magnet production, materials essential for electronics, semiconductors, electric vehicles, jet engines, and advanced defense systems. The move signaled that Beijing was prepared to weaponize its resource dominance.

Round 5 (Oct. 10)

Trump hit back within hours on Truth Social, announcing an additional 100 percent tariff on Chinese goods, effective Nov. 1, “over and above any Tariff that they are currently paying.” He also threatened export controls on “any and all critical software.”

In the same post, he called the Chinese measures an “extraordinarily aggressive position on Trade” and “a moral disgrace in dealing with other Nations.”

Markets plunged. The Dow fell 878 points (1.9 percent), the S&P 500 dropped 2.7 percent, and the Nasdaq tumbled 3.5 percent.

The move made clear the gloves were off, turning the trade war into a full-scale economic brawl.

Round 6 (Oct. 10)

Both nations quickly opened a new front at sea. China imposed “special port fees” on U.S.-built or operated ships, effective Oct. 14.

The United States had introduced similar fees in April to discourage Chinese vessel purchases and curb Beijing’s influence over global shipping routes.

Round 7 (Oct. 12–13)

Verbal Sparring. As tensions escalated, Beijing defended its rare earth export controls as “legitimate” under international law, accusing Washington of having double standards and “abusing” export controls. A statement from China’s Commerce Ministry declared, “China’s position on the trade war is consistent: we do not want it, but we are not afraid of it.”

U.S. Treasury Secretary Scott Bessent fired back, calling China’s actions provocative and warning, “They have pointed a bazooka at the supply chains and the industrial base of the entire free world.”

The exchange underscored how quickly the trade war had shifted from economic maneuvering to open confrontation, each side wielding words as forcefully as tariffs and sanctions.

Round 8

Bessent confirmed that U.S.–China trade talks were still alive.

Trump struck a conciliatory tone on Truth Social: “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment … The U.S.A. wants to help China, not hurt it!!!”

Markets rebounded on hopes that the worst was over.

The calm didn’t last. On Oct. 14, Trump reignited tensions, threatening to halt all cooking oil trade with China over its refusal to buy American soybeans. In a Truth Social post, he called the move “an Economically Hostile Act.” The statement revived fears of renewed escalation and showed how volatile the standoff remained.

Trump and Xi are expected to meet at the APEC summit this week, and both have a habit of escalating tensions before negotiations, only to pull back at the last minute. The question now is whether they’ll do so again. It’s no longer a boxing match but a game of chicken, and whoever blinks first loses.

Tyler Durden Fri, 10/24/2025 - 07:45

Trump "Terminates" All Trade Negotiations With Canada After Ontario Launches Information War Targeting Americans

President Trump has terminated all trade talks with Canada amid an information war waged by the Ontario provincial government, which has criticized U.S. tariffs. Canada's propaganda ad campaign has appeared on Newsmax and Bloomberg, with additional placements scheduled for Fox News, Fox Sports, NBC, CBS, CNBC, ESPN, ABC, and local channels.

The advertisement uses audio from former President Ronald Reagan to remind Americans of the negative consequences of tariffs. 

"High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars," Reagan said, adding, "Then the worst happens: Markets shrink and collapse, businesses and industries shut down, and millions of people lose their jobs."

Late Thursday night, President Trump wrote on Truth Social, "The Ronald Reagan Foundation has just announced that Canada has fraudulently used an advertisement, which is FAKE, featuring Ronald Reagan speaking negatively about Tariffs."

"The ad was for $75,000,000. They only did this to interfere with the decision of the U.S. Supreme Court, and other courts. TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED," Trump emphasized. 

Before Trump's Truth Social post, on X, the Ronald Reagan Foundation blasted the "ad campaign using selective audio and video of President Ronald Reagan delivering his "Radio Address to the Nation on Free and Fair Trade," dated April 25, 1987," adding, "The ad misrepresents the Presidential Radio Address, and the Government of Ontario did not seek nor receive permission to use and edit the remarks." 

Listen to President Reagan's unedited remarks here: https://t.co/1gQUcbR4eZ pic.twitter.com/iqmjSuypp0

— Ronald Reagan Presidential Foundation & Institute (@RonaldReagan) October 24, 2025

In markets, UBS analyst Jason Poh told clients that "USDCAD has a knee-jerk jump, 30+ pips" after Trump announced all trade talks were terminated. 

Foreign governments attempting to shape U.S. trade policy or U.S. politics is not new, but this was certainly a bold move by Canada during trade talks.

. . . 

Tyler Durden Fri, 10/24/2025 - 07:20

'Convulsonomics': Steve Quayle Warns Of "A Freedom-Ending Plan For The World"

Via Greg Hunter’s USAWatchdog.com,

Renowned radio host, filmmaker, book author and archeological dig expert Steve Quayle is back with a global economic warning. 

So many things are going haywire, it appears the world is going into economic convulsions.  Quayle has coined the term “Convulsonomics” to describe what we are facing.  Let’s start with the exploding record high gold and silver prices that have just sold off dramatically.  Quayle, who has sold precious metals for four decades, is not worried and explains:

“This is one of the most extreme movements in gold and silver.  I want people to understand something; it is normal for a pullback when a market has gotten so hot.  

Gold is down $230 an ounce, but people forget it went up $100 every other day for over a week.  Silver is the same, and silver is in extreme short supply. . .. The London Bullion Metals Exchange is delivering to people who want physical delivery, who have bought silver on paper and now they want the real metal. . .. This is going to be the biggest silver short squeeze in the world.  Weeks ago, I said I would not be surprised if we see $100 to $200 down moves in gold and $200 and $300 moves up. 

It’s going to be slingshoting up and down or a yo-yo effect. . .. The media does not tell you the truth about gold.  They just say this was the greatest sell-off in history.”

Quayle goes on to say, “There are huge events coming to this country..."

"I think we are going to see full scale civil war.  

I am transitioning here and saying we know the dollar is dying on purpose. 

We know digital currencies are being promoted and they are a cage, and once you get into it, you will never get out of it. 

I am with Catherine Austin Fitts on this.  It’s an endgame that will force you into a digital prison...

It’s a freedom ending plan for the world.”

Quayle says credit will, at some point, get cut off for people spending too much.  Quayle also warns of coming bank bail-ins where depositors’ money is used to bail out the banks.  There are lots of things coming to an end.  Quayle says:

“We are watching the end of NATO.  We are watching the end of the EU.  We are looking at the time of paper currency failure.  We are looking at commodities backing whatever units of trade.  The true purpose of geoengineering is they are killing the soil.  They are killing the water.  They are killing the growing season by all of the aerosolization in the upper atmosphere.  Add into that the vulcanization, the volcanos going off and the dust going up in the atmosphere and the stratosphere. 

We are seeing global dimming, which is done by global dimwits.  It’s the perfect storm.”

On the political side, Quayle points out a nasty side to the government shutdown, and it has to do with food for more than 40 million people who depend on government assistance to feed themselves.  Quayle says,

“We are 10 days away from the cut off of the SNAP program and Electronic Benefit Transfers, EBT.  That all ends on Halloween.  That is not a costume you shed.  There are 42 million SNAP beneficiaries.  What happens when this stops?  The Democrats are holding up the budget, but I think it goes much deeper.  I think the Deep State wants total famine and upheaval...

This is going to be so volatile.  The word I coined decades ago is Convulsonomics.  When they shut this down, it’s going to be totally Mad Max urban style. . ..  It will be dangerous. . ..  Please rush to prepare.  You have 10 days.  Prepare as if your life depends on it because it does.”

In closing, Quayle says, “There is no political solution to a spiritual problem.”

There is much more in the 61-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes one-on-one with Steve Quayle warning you to prepare for violent financial and society meltdowns coming for 10.21.25

Tyler Durden Fri, 10/24/2025 - 06:30

German Economy Unravelling: Hospitality Crisis, Jobs Vanishing & Industrial Decline

Submitted by Thomas Kolbe

While the federal government is desperately waiting for the start of the multi-billion euro debt package, the real economy is burrowing ever deeper into the ground. The numbers from the hospitality sector speak a clear language: things continue to go downhill.

On Monday, Chancellor Friedrich Merz visited the six-day congress of the trade union IG BCE (Industrial Union for Mining, Chemicals, Energy). There he emphasised the high importance of social partnership between workers, employers and politics and assured the union that he was well aware of the increasingly difficult situation of many people in the country.

In these days Merz would have done better to visit the German hospitality industry. There, without the glamorous distraction of a functionary congress, he could have seen first-hand the reality of the German economy: The interest in uplifting speeches by the Chancellor among restaurateurs, hoteliers and caterers is likely vanishingly small — business is simply too bad.

Cold shower in the holiday season

The Statistisches Bundesamt (Destatis) delivered catastrophic figures for August for the entire German hospitality industry, i.e., both gastronomy and hotels: Even in the most important vacation month, restaurants, hotels, caterers and snack bars lost a real turnover volume of 3.5 per cent compared with the previous year. Nominally there was still a minus of 0.6 per cent in the overall balance. Also compared with the previous month, July, the hospitality sector lost real turnover of 1.4 per cent.

Such a poor development, of all times in the high-volume holiday months, is a fatal proof that nothing seems to be running smoothly anymore in the German economy — exactly now you would have had to cash in. Here, the until now weak year with a minus of about 4 per cent at least should have offered a small glimmer of hope. Pfft. The summer months turned into a disaster. 

Consumers are suffering under the political framework conditions, the high energy prices, inflation and the labour market, which has long since entered rough seas.

Those who take a look into the engine room of the German economy will quickly find the causes for this crisis. It is the expression of an economic disaster that remains insufficiently described in media and politics. The industrial core of the German economy could not permanently withstand the shockwaves of the Brussels eco-regulators and the gnawing attacks of interest-driven NGOs such as the Deutsche Umwelthilfe.

General decline 

And so it came to pass, as it had to. Starting from its best year 2018, German industry across sectors lost a production volume of almost 25 per cent — an indescribable exodus of firms abroad, countless insolvencies: an economic knockout, delivered by a self-inflicted uppercut. 

Large parts of the economy hang on this industrial foundation as if on an umbilical cord — once it is severed, the service providers, the suppliers, the hospitality industry, tourism plunge too. Roughly 1.3 million jobs in the private sector have disappeared to date.

The German economy is in a veritable clearance sale — in a spiral of deindustrialisation. From July 2024 to today, more than 270,000 jobs have been lost in the manufacturing industry, the metal, electrical and steel industries. At the same time, the public administration expanded by almost 50,000 new jobs this year.

The crash continues

A shrinking working-age population in the private sector must carry the burden for a growing army of welfare recipients and the grotesquely expanding public administration. That cannot work in the long run. Even Merz should be able to grasp that, who obviously did not use his excursion into the world of BlackRock breakfast directors to deepen his study of economic interrelations.

This glaring imbalance — of a growing state apparatus on one side and a rapidly shrinking private economy on the other — no economy in the world can offset. Especially not in the context that the German economy has been continuously losing productivity since 2018. A home-made disaster that is now supposed to be flooded with gigantic credit packages.

In total, it is therefore by no means surprising that going out for a meal, holiday travel, even the evening beer has become a luxury for many. Not inflation alone, but the structural collapse of employment and purchasing power, coupled with a crushing tax and levy burden, are driving people into consumption abstinence. Energy prices remain high, the middle class groans under bureaucracy and ancillary wage costs.

Insolvencies and no end in sight

The catastrophe year for the industry is also reflected in insolvency activity: As the industry association DEHOGA Bundesverband reported, the number of insolvencies in the sector rose by about 27 per cent by summer. Measured against the previous year, it is thus to be assumed that around 2,500 hospitality businesses will exit the market this year.

The situation in the hospitality industry is even more dramatic compared with other crisis sectors: 52.7 bankruptcies per 10,000 businesses — significantly more than in the also strongly shrunk construction or transport sectors. Expression of this misery is the employment restraint that has persisted for more than ten years. The precarious personnel situation, poor remuneration — all this mirrors the crisis in the industry.

Fundamentally, the Federal Republic is heading towards a record year for insolvencies. According to figures from Destatis, company insolvencies in the first half of the year were 12.2 per cent above the previous year’s figure, consumer insolvencies 7.5 per cent higher. This means that probably 25,000 companies will exit the German economy in the current year. The insolvency-related damage is likely to exceed the €60 billion mark. 

VAT to be cut again

And what is politics doing? From 1 January 2026, the VAT on food served in the hospitality industry is to be reduced from the current 19 per cent to 7 per cent, as during the Corona period. But it is foreseeable that the industry, given rising energy and personnel costs, will use these margins to stabilise its own capital base. For customers little will then remain.

Guido Zöllig, President of the DEHOGA federal association, recently issued a clear warning of the dying off of gastronomic diversity. For him the VAT reduction is an essential measure to save the industry. With the numerous failures of restaurants and snack bars Germany — Germany’s cities — lose quality of life. Germany bleeds economically and in its urban structure — also this is an aspect of the general cityscape that politics should openly discuss.

Yet a real policy reversal, an end to regulation, the high fiscal burden, the migration chaos or the grotesque climate regulation — all of which influence consumer behaviour — is not in sight for now. Politics shows no willingness to change course.

* * * 

About the author: Thomas Kolbe, born in 1978 in Neuss/ Germany, is a graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Fri, 10/24/2025 - 03:30