Update (1000ET): French President Macron has just confirmed what we reported earlier, that the G7 has agreed to release as much as 100 million barrels of emergency oil and diesel stocks after pressure from the Trump administration to quell rising fuel prices.
The release, being coordinated by the International Energy Agency, will take place over the next four months, Emmanuel Macron, France’s president told journalists in a briefing on Friday. He is also the current chair of the G7 nations.
The G7 would like to trigger a drop in fuel prices, he said.
Trump was quick to respond too, with no real gloating yet...
Oil prices fell back towards the low of the day on the news...
Both US and EU diesel prices are also lower...
With little oil of its own, and an outsized appetite for diesel, Europe again found itself bargaining from a position of relative weakness... and bending the knee.
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As we detailed earlier, Bloomberg's reported that France proposed that other European countries and International Energy Agency members release 100 million barrels of diesel and crude oil from emergency stockpiles would signal that Brussels is caving to President Trump’s demand.
Europe's dependence on US fuel supplies gives the Trump administration major bargaining power as the continent approaches winter with below-average energy supplies and exposure to higher costs if a cold snap or further supply disruptions materialize.
The report has not been officially confirmed and is based on sources, but it says European countries are considering releasing 50 million barrels of diesel, with International Energy Agency members making another 50 million barrels of crude available.
One day earlier, Reuters reported that the Trump administration asked Germany and France to release emergency diesel inventories to help create a buffer against the supply squeeze in the industrial fuel or face a potential US diesel export ban.
The art of wheeling and dealing is all about leverage, and it appears the US threat of a diesel export ban might be enough to make Europeans come to their senses and dump emergency fuel and crude supplies onto the market.
Bloomberg also mentioned that French President Emmanuel Macron and President Trump spoke overnight and that G7 leaders are set to convene around 0830 ET.
"It is in Europe's best interest to work with the United States as we pursue multiple pathways to boost the supply of refined products and lower costs for consumers," one source, a US official, told Reuters on Thursday.
Tyler Durden Fri, 10/02/2026 - 10:05In our jobs preview post, we told readers to "beware a bond squeeze as august seasonals reverse" and boy were we right: yields are tumbling from 5.22% to 5.16%, a new weekly low, as all those record TSY shorts get bigly squeezed following what was a big miss in the September jobs print which tumbled from a downward revised August (as we said it would be) 133K vs 162K originally to just 29K.
It wasn't just August that was revised down by 29,000, from +162,000 to +133,000: July was also revised down by 31,000, from +21,000 to -10,000. This means that the original negative print of -23K, and which was revised up to 31K last month, is now once again negative and that had the Fed known this, it most likely would not have hiked last month. With these revisions, employment in July and August combined is 60,000 lower than previously reported.
More notably, the 29K job print was below all estimates, which is amusing since August was originally above all estimates, but has since been revised sharply lower and just in line.
While the headline payrolls print was a big miss, the unemployment rate actually rose to 4.2%, from 4.1%, and above estimates of an unchanged print, as the number of unemployed workers rose to 7.109MM from 7.031MM, up 78K, while the labor force rose by 485K to 170.262MM. Among the major worker groups, the unemployment rate for people who are Black (7.0 percent) jumped in September. The jobless rates for adult men (3.9 percent), adult women (3.6 percent), teenagers (14.5 percent), and people who are White (3.6 percent), Asian (2.9 percent), or Hispanic (4.7 percent) showed little change over the month.
As for the specific reason why the unemp rate rose despite the drop in payrolls, that's because the Household Survey showed a 406K surge in the number of employed workers, the second highest since Jan 2025 (only August's 569K was higher)...
... which pushed the total number of employed workers to 163.152MM, the highest since January.
It's also why the participation rate has jumped sharply in the past two months after dropping to a 5 year low in July.
There was some more relief on the inflation front as average hourly earnings rose just 0.1%, below the 0.3% expected, which pulled the annual wage growth to just 3.0%, down from 3.1% and below estimates of an unchanged print.In September, average hourly earnings of private-sector production and nonsupervisory employees rose by 7 cents, or 0.2 percent, to $32.60.
The average workweek for all employees on private nonfarm payrolls remained at 34.4 hours in September. In manufacturing, the average workweek was unchanged at 40.6 hours, and overtime held at 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.8 hours.
Taking a closer look at the numbers in the report, we find the following:
Next, looking at the actual industries in today's report, we find the following:
And visually:
There were no major surprises below the surface, as part-time jobs rose by 205K to 28.746MM while full-time jobs rose by 88K to 134.376MM.
Finally, looking at the breakdown in native vs foreign-born, there were no surprises here too, as the number of US born workers rose by 298K while foreign-born workers surged by 473K, on other words, back to the old normal.
Overall, this was a mixed report, with the Household Survey painting a much stronger picture than Establishment (hence unemployment rate higher). But since the market - and by extension the Fed - are mostly swayed by the Payrolls part of the equation, it is not surprising that the market reaction today is one where bonds are getting massively short squeezed after the payroll print which missed all estimates.
Tyler Durden Fri, 10/02/2026 - 09:55Thousands and thousands of people staring at screens. Not teenagers checking out TikTok, but highly educated, well trained professionals, staring at screens. Millions, even billions, maybe even trillions of dollars, yen, euro, etc., poised to move around based on the data that comes out at 8:30 am.
Then we get another mishmash of data, so different than expectations, with revisions bigger than the number itself, and are supposed to make something of the data?
As Academy Securities' Peter Tchir writes, "can we all just admit this is absurd!?"
Only 29k jobs vs expectations of 90k. Ugh.
-60k of downward revisions after last month’s 55k. Ugh.
Only 46k in private payrolls, which also got revised down from the initial guestimate of 127k to 89k. Ugh.
Somehow the 3 month moving average is now 51k this month and last. Hooray??
Hourly earnings dropped, good for wage pressure inflation, bad for anyone trying to make ends meet.
The unemployment rate rose 0.1%, but largely due to an increase in the labor participation rate of 0.2%. I kind of like that, assuming it is remotely accurate, which seems like a silly assumption to make, but one that we are all forced to make. The underemployment rate actually ticked down, which again, if real, is good. All of this is based on the Household Survey which said we added 406,000 jobs in September. One is known to be more wildly inaccurate than the other hugely inaccurate number, but 406k sounds pretty darn good, if it was real, which it probably isn’t.
The birth/death model showed job losses of 190k.That is not seasonally adjusted, and I don’t now how much that subtracted (or possibly added) to the NFP headline number, but again (this time in a different direction), it seems “strange” that a “plug” (or calculation) is in the same order of magnitude of the number it is helping to “true up”.
We will get the obligatory rally in bonds (and the numbers are “tepid” enough) that the bond rally should help equities along, but there is a better chance of me breaking par, than that these numbers are truly useful in judging anything. We will use the numbers because “we have nothing better” but that increasing seems like a giant cop-out!
Seriously, if you were in a class and were told billions of dollars would be made or lost on a number that even the people looking at the number don’t believe, you’d shake your head in incredibility, that this really was going on. Not just for a month or two, but for years and years!
Can’t we use electronic paycheck data to get a pretty accurate number for all those who are getting paychecks? Wouldn’t that cover a big part of the economy. Wouldn’t knowing, with a high degree of exactness, how that part of the workforce (those who receive at least one check in a month) is evolving over time be useful? We could attempt to get the rest, but something that covered a vast swath of the economy, and was reasonably likely to be accurate and real-time, would seem a good goal.
Yes, I continue to hope to somehow land on a data task force committee, because this just seems more and more unbelievable all the time.
It is very good that Warsh in particular keeps telling us not to focus on any one month’s data, nor any one data series. That I’m in full agreement on, which is why I expect this initial reaction to fade.
You’d like to think ADP can capture some of what I’d like to see, and maybe last month’s 36k and this month’s 90k are more accurate? But who knows. But, also a reason not to fully trust today’s data.
Two pieces of data that I think are more difficult to “fake” or (more accurately, get absurdly wrong), are the JOLTS Quit rate which remains low at 1.9%. People could be so happy with their current jobs they aren’t even thinking about another job (I know I am), but generically, I think it represents a “take this job and shove it” vibe, which increases when the perception is that equal or even better jobs are easy to find. The JOLTS Hires rate came in at 3.3% this month. It has been stuck right around this level, which is a little lower than the 3.8% or so we typically saw in 2016 through 2019. Consistent with a no hire, no fire employment situation.
Bottom LineWe can examine data that the Fed may use to hike, pause or even cut, but the big drivers remain the same:
The Iran War.
The Price of Diesel.
Compute Spend. Including the threat of Cheap Chinese Compute.
Whatever is going on with European bond yields. The German 2 year bond yield has declined from 3.31% on Monday to 2.99% as of Friday morning. The French 2 year has moved from 3.62% to 3.77% in that same timespan. From 31 bps to 78 bps in a week is pretty ugly.
Some real weakness in credit spreads. I cannot remember the last time credit spreads seemed particularly interesting on the macro front, but they are again, with CDX moving from 50 to 60 in 2 weeks. Certainly not alarming but can’t help but look.
With the bond market shaky, and the excitement of this data like to fade as the morning wears on, we will all be back to placing bets on the above issues very soon.
Tyler Durden Fri, 10/02/2026 - 09:45