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The models that *blew me away* after years of testing.

84% Of Gen Z Democrats Back Socialism; New Poll Finds

Authored by Pedro Rodriguez via The Daily Signal,

A groundbreaking new poll conducted ahead of November's midterm elections has uncovered that over 30% of Americans have a favorable view of socialism.

According to the OnMessage poll, which surveyed 800 American voters from July 12-16, 35% of respondents identified as Democrats, 84% of whom identified as Gen Z.

"Embracing socialism is no longer a fringe talking point for Democratic voters. Our data shows that a majority of Democrats of all ages hold favorable views of socialism, including 84% of Gen Z Democrats," Henry Parkhurst, the OnMessage pollster who carried out the survey, told the Daily Signal.

The findings confirm that the Democratic Party's claim that socialism is a "fringe issue" is no longer true, and that socialism has spread into the party's core.

Marxist Utopia Debunked by Survivors of Communism

The Daily Signal's Journalism Fellow, Pedro Boccalato Rodriguez, and the Manhattan Institute's Policy Fellow, Daniel Di Martino, draw on their experiences under Marxist rule to debunk the communist talking points pushed by… pic.twitter.com/FdIJJmDb1e

— Daily Signal (@DailySignal) August 9, 2026

"While the national Democratic Party may claim to be divided on how far they're willing to lean into socialism, their voters clearly show they're encouraging the party to move in that direction," Parkhurst added.

The survey came months after the Democratic Socialists of America touted a historic increase in membership, coupled with the rise of DSA-affiliated candidates and officials across the country.

Now, in the next Congress, at least five new DSA members will be sworn into the House of Representatives, adding to the growing number of socialist officials like Seattle Mayor Katie Wilson, New York City Mayor Zohran Mamdani, and Rep. Alexandria Ocasio-Cortez, D-N.Y.

Senate candidates Angie Nixon in Florida and Abdul El-Sayed in Michigan also have a fair shot at winning their races this November.

OnMessage revealed the findings after conducting text-to-web interviews and recording historic respondent turnout.

The survey also oversampled voters under 45, resulting in approximately 600 Gen Z and Millennial voters for in-depth analysis.

The margin of error for this survey is +/- 3.5%.

Tyler Durden Mon, 10/05/2026 - 09:45

The Post's Week 5 college football rankings

Spain Joins The Party: Snap Election Adds Madrid To Europe's "Red October" Bond Crisis

For the past week, the only question that mattered in European fixed income was whether France's fiscal meltdown would stay French. On Monday morning, Madrid volunteered an answer, or at least a new variable.

Spanish Prime Minister Pedro Sánchez called a snap general election for November 29, roughly eight months before his term was due to expire, after a fragmented parliament killed his emergency housing decrees on Friday. It's a high-stakes gamble for a Socialist leader who trails in nearly every poll, and it lands in a eurozone where the OAT-Bund spread just touched levels last seen in the 2011 debt crisis and EURUSD is sliding to a 17-month low.

Goldman trader Rich Privorotsky summed up the Street's first read in his morning note (available to pro subs):

"EUR getting hit. Potential Spain snap election risk is another political wobble, but France is still the bigger issue. OAT/Bund spread acceleration and fiscal anxiety is clearly bleeding into the currency. Spain itself isn't a huge tail, but it adds to the broader sense of political instability."

In other words, Spain isn't the fire, it's more dry kindling next to one.

Below we break down why Sánchez pulled the trigger, how markets (barely) reacted, and why Goldman thinks Spain is precisely the kind of country the ECB would rush to protect... as long as nobody confuses it with France.

The Gamble: Housing Fails, Sánchez Folds... Forward

The proximate cause for the Sanchez announcement was housing. As Bloomberg reports, Sánchez's emergency package sought to freeze rents, make rental contracts indefinite, ban evictions of vulnerable tenants and regulate short-term tourist apartments. Nationwide protests boiled over after an 87-year-old disabled woman was evicted from her apartment. Then on Friday the package died in parliament, with Catalan separatists Junts, the same party that put Sánchez back in office in 2023, arguing that more intervention in the housing market would only make the problem worse.

"We need to renew people's support," Sánchez said in a televised address, per Reuters, while conceding he had "made mistakes" and fallen short of campaign promises. Translation: the minority government that hasn't passed a budget since 2023 has run out of road, and would rather fight now on housing (a rare issue where the left can mobilize) than in 2027, when the migrant crisis in Ceuta and the corruption cases swirling around his party and his family return to centre stage. As Freemarket's Lorenzo Bernaldo de Quiros told Reuters: "If he does not call elections fast, (those topics) will return to center stage."

Regular readers are familiar with those topics, from the 500,000-person migrant amnesty (Feb 7) to the chaos in Ceuta, where roughly 80,000 undocumented migrants arrived this summer ("Spain Gasses Its Own People; Police Probe Migrant/Soros NGO Acid Buys In Ceuta", Sep 4). And as we discussed earlier today in "Left Under Pressure", Sánchez is hardly the only left-wing incumbent having a rough Monday.

The opposition was, to put it mildly, ready. The People's Party posted "AT LAST" on X, and leader Alberto Núñez Feijóo said: "Finally! What's at stake is no longer merely a change of government, but the urgent need to undertake a process of national reconstruction." The math explains the enthusiasm: the latest 40dB poll (Sept 25-28) has the PP at 31.6%, Vox at 18.4% and Sánchez's PSOE at 27.4%. Feijóo has signalled he could govern with Vox, which would put a far-right party in Spain's central government for the first time since Franco.

That said, Vox leader Santiago Abascal is wisely not counting chickens: "Surveys said the same thing in 2023 and Sanchez managed to form a majority with all his accomplices." Sánchez has spent eight years assembling coalitions that weren't supposed to exist, so we wouldn't write the obituary just yet.

"Spain Itself Isn't A Huge Tail"... But The Timing Is

Spanish assets, for their part, took it in stride. The IBEX was flat after the announcement, benchmark 10Y Bonos were little changed at 4.08%, and the spread over Bunds widened a modest 3bps to 65bps, per Bloomberg. JPMorgan's Andrew Tyler even noted that among major European markets, "Spain [is] leading and France lagging" this morning, while Goldman's Spain Domestics basket (GSXEESDO) was up 40bps.

The reason for the shrug: the Street has been pricing a change of government for months. Goldman's EMEA execution desk wrote that "feedback on Friday was supportive on elections given PP leading in the poll," before adding a dose of humility courtesy of Sunday's Brazil shock: "perhaps what we have learned from Brazil is the fact that polls are not always accurate. So perhaps it creates a bit of volatility in Spain to start with."

The problem isn't Spain, it's the calendar. Here is Goldman's FX desk (Matt Atherton) on why the euro broke below 1.12:

"Speculation that Spanish government officials were preparing for an early election – now confirmed. This development follows the defeat of two emergency housing bills in Parliament last week – a core issue for their supporters. Our view is that both of these issues independently would not be a cause for concern nor trigger any real EUR depreciation, but the timing is much more the issue amid broader European stress."

Goldman's Jonathan Lightowler listed the full rap sheet behind EURUSD's slide from 1.1260 to a 1.1161 low overnight: "talk of EUR selling from Asia investors selling European FI Friday; plus ongoing French fiscal focus; plus headlines around a snap election in Spain which has now been called; plus Italy's Friday fiscal revisions."

So four separate catalysts, and all in one direction. Diversification at its finest.

Patient Zero Is In Paris

For context on just how "broad" the broader European stress is: last week the Franco-German 10Y spread widened 32bps to 141bps, which Deutsche Bank's Jim Reid called "the biggest weekly widening in available Bloomberg data back to 1990, the year of German reunification." At one point on Friday it hit 160bps, "so we were on the edge of a mini panic." Italy's 10Y spread widened 23bps to 114bps, the biggest weekly jump since April 2020.

Regular readers saw it coming in real time. As we wrote on Thursday in "Debt Crisis Back? European Bond Markets Crash, CDS Explode Amid France Budget Panic Contagion" (Oct 1), "It's starting to smell awful sovereigny crisisy in Europe all over again." Or, as we put it on X that afternoon:

it's been a while since we had a European sovereign debt crisis *FRANCE-GERMANY 10-YEAR YIELD SPREAD WIDENS 8BPS TO 135BPS France CDS widest in 13 years https://t.co/9opJUmD2uS

— zerohedge (@zerohedge) October 1, 2026

The key question for Spain is whether French stress stays French. Goldman's FX strategist Mike Cahill says it rarely does, and that's exactly when the euro starts to care. In his framework, "contagion is the trigger - idiosyncratic stress, especially in smaller member states, barely moves FX until it infects regional risk sentiment (best proxied by GDP- or market-weighted spreads...)." His second principle is the one to tape to the screen:

"Second, the beta jumps when credit is in focus: the Euro depreciates roughly 4-5% per 100bp of spread widening on average, but in practice the response is near zero most of the time and spikes only in acute stress - spreads don't matter for the currency until they're the only thing that matters."

And the GDP-weighted spread is now moving. Goldman's chart below shows the broad EGB-Bund spread, which drifted lower for most of 2025-26, finally turning higher alongside the OAT vertical:

Zoom into the front end and you see the spillover more clearly: Spain's 2Y spread to Germany, which spent August and September hugging single digits, has jumped to roughly 20bps alongside Portugal, while France and Italy lead the charge. Spain is no longer immune, it's just less sick.

The "Innocent Bystander" Clause

Which brings us to what may be the most important line of Goldman research for Bonos holders this week. In their Sunday note, "ECB—Potential Implications of Rising Sovereign Stress" (available to pro subs), Goldman economists Sven Jari Stehn and Alexandre Stott walk through the ECB's likely reaction function and draw an explicit line between Madrid and Paris:

"TPI activation would likely require significantly more intense and broad-based sovereign stress, especially with inflation well above target. That said, the bar for TPI purchases to protect 'innocent bystanders' from contagion (such as Spain) seems much lower than intervention in markets where current fiscal policies are inconsistent with the stabilisation of public debt (such as France). The TPI could possibly be used temporarily under disorderly market conditions to buy time for a policy adjustment (in a parallel to the mini-budget episode in the UK). But addressing fundamental sovereign risk requires a fiscal rather than an ECB solution."

Put differently: if Spain gets dragged into France's mess, the ECB's cavalry may show up. If France keeps digging, it's on its own. That's a powerful distinction, and it helps explain why Spain's 10Y spread sits at less than half of France's.

There is a catch, however. Goldman notes the euro area FCI "has tightened by nearly 40bp since the start of July, potentially substituting for one 25bp ECB rate hike," but the bank still keeps its call for a third and final hike in December, with euro area September CPI at 3.8%. Before reaching for anti-fragmentation tools, Goldman sees the balance sheet (slowing QT) as "the more likely first lever," calling TPI "the last resort, not the next step." Translation: the ECB is trying to tighten financial conditions while simultaneously being asked to loosen them for half the periphery. As we tweeted on Friday:

France-Germany 10Y spread less than 40bps away from taking out sovereign debt crisis highs. Europe once again on the verge of the abyss, and desperately in need of QE although soaring inflation means "nein" https://t.co/Nx1OcPcnp8

— zerohedge (@zerohedge) October 2, 2026 Who Gets Hurt: Data Centers And CaixaBank

Beyond the macro, the snap vote throws a wrench into some very specific trades. Goldman's real estate team (Jonathan Kownator, Maria Grego Llacer) flagged that Madrid had planned to approve a new data-centre Royal Decree during October, a key swing factor for Merlin Properties (MRL.MC):

"While it is too early to assess the ultimate impact on the legislation, the election introduces additional uncertainty around both timing and final content. This comes against a backdrop of rising opposition to the current proposal with the PP publicly criticising the draft decree, while recent opinion polls point to a potential PP-Vox parliamentary majority."

Goldman nonetheless remains Buy rated with c.48% upside to its €17.9 price target, which is either conviction, or a reminder that price targets tend to be the last thing to update.

On the banks, Goldman's EU Financials specialist Gaelle Jarrousse is going the other way, pitching a short in CaixaBank into Q3 on numbers that sit 2% below consensus NII for both Q3 and FY26, adding that "Spanish elections can create a bit of volatility even if the PP is leading the polls and seens as more business friendly." She also flagged hedge funds as sellers of Caixa this morning, while BBVA saw one of the biggest week-over-week increases in short interest on Goldman's stock lending desk.

And for those wondering why any of this matters for the broader European tape, Goldman's Sharon Bell has the rule of thumb: "Each 10bp widening in the average spread of OATs and BTPs to Bunds takes 0.9% from Europe's PE." Spain isn't in that formula... yet.

Bottom Line

On its own, Spain's snap election is a mostly domestic affair. Bloomberg Economics put it bluntly: "The near-term economic impact should be limited. Spain was already mired in policy paralysis." And Spain's economy remains the fastest-growing among Europe's majors, with unemployment at its lowest since the financial crisis. A PP-led government would likely be seen as more market-friendly, which is why Friday's desk feedback was "supportive."

But markets don't trade countries in isolation when spreads are blowing out, and Goldman's own framework says contagion, not fundamentals, is what moves the euro. Spain heads into seven weeks of campaigning just as France debates its budget (RN's counter-budget lands Tuesday, plenary debates start Oct 13), Italy revises its deficit targets higher and the ECB keeps hiking into 3.8% inflation. Goldman thinks Spain qualifies for "innocent bystander" status. We agree it does today. But as anyone who has ever stood next to a sovereign debt crisis knows, bystanders tend to get hit first and rescued last, especially when the rescuer is busy fighting inflation. The far more likely path is that Bonos trade with French headlines, not Spanish polls, for the next seven weeks.

Then again, Sánchez has made a career out of surviving elections everyone said he'd lose. We'll check back after Spain's September PMIs (due today) and France's budget debate kicks off on October 13.

Much more in the full Goldman "ECB—Potential Implications of Rising Sovereign Stress" note and the "Merlin Properties: Spain calls snap elections" note, both available to pro subs.

Tyler Durden Mon, 10/05/2026 - 09:20

"The mental toll that followed was overwhelming," the "Love Story" actress candidly shared with her Instagram followers over the weekend.

"The mental toll that followed was overwhelming," the "Love Story" actress candidly shared with her Instagram followers over the weekend.

ST. PETERSBURG, Fla. — Down 1-0 in a best-of-five AL Division Series, the Yankees could not ask for a better potential savior than Cam Schlittler in Game 2. 

UBS Says Watch Beaten-Down Consumer Stocks, But Is "Reluctant To Call Outright Bottom"

The Conference Board's Consumer Confidence Index has fallen to its lowest level since April 2014, but UBS equity trader Mark Paski is watching closely for signs of a bottom in beaten-down consumer stocks.

Paski explained:

Some of the US consumer sector's biggest laggards are beginning to outperform despite little improvement in the underlying data, a potential sign that prices may be bottoming before fundamentals. The sector remains deeply unloved, with investors heavily underweight, tax-loss selling still dominating conversations and expectations reset sharply lower over recent months.

Lower rates, easing energy prices and quarter-end positioning helped fuel a bid in discretionary stocks this week, particularly across retail, restaurants and housing-related names. The strongest moves have come in areas where bearish positioning had become most stretched, suggesting flows and positioning are starting to matter more than deteriorating fundamentals.

Investors remain reluctant to call an outright bottom, but there is growing interest in owning select consumer names if confidence in the backdrop improves. That leaves Q4 as a key test. 

While the macro picture remains challenging, the focus increasingly appears to be shifting from how bad conditions are to whether the rate of deterioration is slowing. For many consumer stocks, the debate is no longer about valuation but whether fundamentals can stop getting worse.

The S&P 500 Consumer Discretionary Index is back near the lower base of the highlighted 1,800-to-2,000 trading range after repeatedly failing to sustain a breakout. 

At roughly 1,829, the index is approaching a key test: whether buyers defend the 1,800 area or renewed selling opens the door to further losses. Much of that will likely hinge on where gasoline and diesel prices go from here, as well as the interest rate path. 

Professional subscribers can read more on the consumer here at our Marketdesk.ai portal. 

Tyler Durden Mon, 10/05/2026 - 09:10

Prince William and Kate Middleton's eldest child is in his first year at Eton College, while his siblings attend Lambrook Prep School.

Prince William and Kate Middleton's eldest child is in his first year at Eton College, while his siblings attend Lambrook Prep School.

"They were robbed of their innocence and robbed of their youth by the monsters that were their former parents.” 

The streamer boasts a diverse blend of sensational and journalistic stuff.

Nets fans sat through two tanking seasons — and suffered through almost 120 losses — to land first Egor Dëmin and then Mikel Brown Jr. as the payoff.  It’s no surprise, then, that those fans have pinned their hopes on the pair of 20-year-olds as the backcourt of the future and the foundation of their...

Cris Collinsworth did not hold back for the Lions sake.

Supreme Court To Hear Pivotal Climate Case With Billions At Stake

Authored by Kevin Stocklin via The Epoch Times,

The Supreme Court will hear oral arguments on Oct. 5 regarding a lawsuit from Boulder, Colorado, demanding compensation from energy companies for local weather damage allegedly caused by global greenhouse gas emissions.

The question before the court, however, is not whether global warming theories hold water. It's whether local courts throughout the United States should have the authority to extract billions of dollars from energy companies for damage allegedly caused by global emissions.

The energy companies argue that giving such power to local courts would allow municipalities to effectively impose a massive nationwide carbon tax with the potential to bankrupt the U.S. energy industry.

Experts say the court's decision in this case could have a dramatic impact, both on U.S. energy production and on what Americans pay for oil, gas, and electricity.

"It is actually bigger than climate change," O.H. Skinner, executive director of the Alliance for Consumers, told reporters at a pre-hearing conference. "It's about [climate activists'] overall ability to weaponize courts to accomplish policy goals that are sweeping, that are multi-billion dollars in scale, and that could end up with an order that basically rewrites the American economy."

Boulder County originally brought its suit in 2018, charging that the products of Suncor, a Canadian energy company operating refineries in Colorado, and ExxonMobil, the largest U.S. energy company, caused climate-related damage, and that these companies concealed information about those risks.

The lawsuit argues that the defendants are liable under local tort laws for creating a public nuisance, trespassing, unjust enrichment, conspiracy, and failure to warn consumers that use of their products could cause extreme weather events.

In a brief supporting Boulder county's authority to apply local tort law, the American Association for Justice, a nonprofit legal group, wrote that "states have a manifest interest in both applying their own laws when their citizens are affected and in providing residents with a convenient forum for redressing injuries inflicted by out-of-state actors."

The energy companies, and their backers, including the Justice Department, counter that federal law, including the Clean Air Act, precludes, or preempts, state law because the emissions that allegedly cause global warming extend beyond state borders. The Supreme Court will separately consider whether it has jurisdiction to hear the challenge.

Claiming federal preemption, the Justice Department has sued Minnesota, Hawaii, and Michigan to block climate lawsuits brought in those states, and sued New York and Vermont over "polluter pays" climate superfund laws that seek to tax fossil fuel companies according to their CO2 emissions.

"When states seek to regulate energy beyond their constitutional or statutory authority, they harm the country's ability to produce energy and they aid our adversaries," Acting Assistant Attorney General Adam Gustafson said in a statement.

Billions at Stake

Boulder County's suit is one of dozens of climate lawsuits currently moving through courts across the country. While Boulder's lawsuit has not named a dollar figure for damages, a similar climate lawsuit in Multnomah County, Oregon, is claiming $50 billion from Exxon, Chevron, and other energy companies for damages and for an abatement fund against heat waves and wildfires.

Critics of the lawsuits say that, in the wake of failed attempts to pass climate legislation like the Green New Deal, these climate lawsuits are an attempt by activists to achieve a similar outcome through municipal courts.

"They're going around to these cities and states, using tort litigation and public nuisance lawsuits in a coordinated way to effectuate the same result, but without having to go through their democratically elected officials," former Alaska Attorney General Stephen Cox told reporters at a pre-hearing conference. "They're essentially trying to regulate through litigation."

The outcome of the suits, should they succeed, will likely be to drive up the cost of energy for consumers, restrict the use of fossil fuels, and potentially bankrupt oil and gas companies altogether, Cox said.

Oral arguments in the case will begin on Oct. 5, and a ruling is expected some time between late fall 2026 and June 2027. If the Supreme Court allows Boulder's lawsuit to proceed, dozens of other climate lawsuits across the country will likely also proceed to discovery and trial.

If the Court dismisses the suit, "it will kick the legs out from this public nuisance approach," Skinner said. "It would basically conclusively end this type of attack by the left in state courts to reshape our energy industry and our nation."

On Sept. 28, Justice Samuel Alito announced that he would recuse himself from the Boulder case, without citing a reason, creating the possibility of a 4 - 4 split decision.

Litigation Versus Legislation

The proliferation of climate litigation extends well beyond U.S. cities and states. According to a 2025 United Nations Environment Program (UNEP) report, there are more than 3,000 such lawsuits against energy companies worldwide.

"Climate litigation has evolved into a powerful global tool for advancing climate action, and accountability," UNEP's executive director Inger Andersen said in a statement.

However, many U.S. courts have disagreed with this view, ruling that national legislation in which the voting public has a voice is the appropriate way to set national energy policy.

In dismissing climate lawsuits, numerous courts have pointed to federal legislation, in particular the Clean Air Act of 1970, as the proper legal authority on issues that cross state borders. Even in blue states like New York, New Jersey, Maryland, and Delaware, appellate judges have rejected local tort litigation as a tool to address global warming.

In dismissing a New York City lawsuit in 2021, the Second Circuit Court of Appeals stated that local CO2 emissions "may contribute no more to flooding in New York than emissions in China," and that "such a sprawling case is simply beyond the limits of state law."

And in 2024, Baltimore Judge Videtta Brown dismissed the case of Baltimore City v. BP, et al., stating that the suit was an attempt to regulate CO2 emissions and "simply a way to get in the back door what they cannot get in the front door."

One foreign government recently came to the same conclusion. On May 12, New Zealand outlawed climate lawsuits in the country.

On the New Zealand government's website, Justice Minister Paul Goldsmith stated: "The courts are not the right place to resolve claims of harm from climate change, and tort law is not well-suited to respond to a problem like climate change, which involves a range of complex environmental, economic and social factors."

By contrast, state supreme courts in Colorado and Hawaii have ruled that municipal tort law is appropriate in these cases, and have green-lit them to proceed. Before Boulder v. Suncor made its way to the U.S. Supreme Court, the Colorado Supreme Court in 2025 rejected defendants' claims that federal environmental law preempted local jurisdiction.

In order to avoid a conflict with federal regulations, climate litigants have claimed that they are merely seeking compensation for local injuries and that their cases are not intended to regulate emissions.

Presenting arguments in 2025 before Maryland's Supreme Court for climate lawsuits brought by Baltimore, Annapolis, and Anne Arundel County, plaintiff's attorney Victor Sher stated the suit "does not involve capping, regulating or limiting emissions by the defendants or anybody.

"It doesn't involve changing pollution control measures or installing equipment or anything like that by these defendants or anyone else," Sher stated. Rather the lawsuit was about local residents getting compensation for "nuisance, trespass and failure to warn."

Contradicting this claim, David Bookbinder, an attorney who formerly represented Boulder Colorado in its climate lawsuit, stated at a 2025 Federalist Society panel discussion that "tort liability is an indirect carbon tax. You sue an oil company; an oil company is liable; the oil company then passes that liability on to the people who are buying its products.

"The people who buy those products are now going to be paying for the cost imposed by those products," Bookbinder said, calling the lawsuits "a convoluted way to achieve the goals of a carbon tax."

According to Skinner, this process of achieving political goals through litigation, if it succeeds, is unlikely to end with energy companies.

"These cases should matter to everybody," Skinner said. "If they are able to bring lawsuits over energy companies producing oil and gas, then they'll go after utilities, they'll go after car manufacturers making the wrong kind of cars."

A Network Supporting Climate Lawsuits

Although the scientific theories underpinning the lawsuits are not at issue in the upcoming U.S. Supreme Court hearing, critics have charged that a concerted effort has been ongoing both to fund the climate lawsuits and to convince local judges that the plaintiffs' claims have merit.

In January, Reps. Jim Jordan (R-Ohio), chairman of the House Judiciary Committee, and Darrell Issa (R-Calif.), chairman of the Subcommittee on Courts, Intellectual Property, and the Internet, told the Federal Judicial Center in a letter that the manual it produced to educate judges on climate issues included "biased programming" with the "underlying goal of predisposing federal judges in favor of plaintiffs who allege injuries from the manufacturing, marketing, use, or sale of fossil-fuel products."

In a July Truth Social post, President Donald Trump stated that the National Academies of Sciences, Engineering, and Medicine (NASEM), which wrote climate sections of the Federal Judicial Center's manual, had "published fraudulent, biased, and misleading Manuals on Climate Change" and that "taxpayers should not be funding Climate Fraud, and Judges should never have relied upon it."

In September, a coalition of 25 state attorneys general called on the federal government to defund NASEM, stating that it used taxpayer money to produce reports in support of global warming narratives and so-called attribution methodology, which is a way to calculate specific dollar claims of harm to local communities from greenhouse gas emissions.

The Federal Judicial Center has since removed the chapter on climate science from its judicial manual, and NASEM pledged an internal investigation into how its reports were produced.

In addition, a 2024 Senate Commerce Committee report stated that Sher Edling, a law firm that represents more than 20 municipalities in climate lawsuits, will "not only … receive approximately one-third of any amount it extracts from energy companies if it is somehow successful, far-left funds are offsetting any risk the firm would otherwise have in pursuing these absurd claims by bankrolling Sher Edling to the tune of millions of dollars each year."

The report stated that left-wing nonprofits such as the Resources Legacy Fund and the New Venture Fund have given Sher Edling more than $13 million since 2017.

The Epoch Times reached out to Sher Edling for comment but did not receive a response as of publication time.

Tyler Durden Mon, 10/05/2026 - 08:50

Russian Lab Worker's Abrupt Death Sparks Plague Crisis Concerns; Trump Team "Monitoring Outbreak"

With wars in Eastern Europe and the Gulf already sending the world down a dangerous trajectory toward worsening instability ahead of the Northern Hemisphere winter (see the global refining crisis), a suspected plague case at a Russian research institute has added a potential public health crisis to that risk landscape.

Axios reports that a laboratory worker's death in Siberia's Irkutsk region has prompted medical observation of nearly 200 potential contacts.

The Trump administration "is aware, monitoring the outbreak, and assessing options," the outlet said, citing an administration official.

.@SecRubio on the possible Russia plague outbreak: "We're watching and monitoring it closely. I don't think it's cause for alarm, but it is cause for focus." https://t.co/pWbvfmV6uE

— Rapid Response 47 (@RapidResponse47) October 5, 2026

Last week, a 28-year-old worker of the Anti-Plague Institute died of severe pneumonia. Local Russian media outlets reported that the worker may have been exposed to the bacterium responsible for pneumonic plague after breaking a test tube.

BREAKING: 5 hospitals have been closed for quarantines in Siberia due to a possible plague outbreak. The 28-year-old lab technician Darya Shipilova, died yesterday after breaking a test tube with live Yersinia pestis the Irkutsk Anti-Plague Institute on September 25th while handling samples. A mask mandate has now been introduced at the huge aluminum plant in Irkutsk. Some U.S. politicians are now calling for commercial air travel to and from Russia to be stopped until the situation is clarified. This first symptoms of pneumonic plague typically start about 4 to 7 days after exposure. 200 people are under observation.

— Visegrád 24 (@visegrad24) October 4, 2026

Maxim Modin, the mayor of the Shelekhovsky district in eastern Russia, near the Mongolian border, said local authorities have implemented a "comprehensive set of anti-epidemic measures."

According to Rospotrebnadzor, the Russian agency that handles infectious diseases, "no micro-organisms associated with the employee's professional duties were detected in samples taken from the patient," Modin said.

A nearby aluminum smelting plant told staff to wear masks as a precaution last week. The director of the Irkutsk Aluminum Plant, Artem Fominikh, also urged calm and noted that "there are many rumors and conflicting reports circulating."

A US State Department spokesperson told CNN on Sunday that it is aware of the possible plague case in Russia: "We are monitoring the situation closely with the CDC and our other interagency partners. Many details have not been confirmed. We encourage Russian authorities to share accurate information quickly and openly."

Tyler Durden Mon, 10/05/2026 - 08:40

Stock Futures Drift As Attention Turns To European Debt Crisis

Futures are lower to start the week and global markets struggle for direction, as political upheaval and mounting concern over Europe’s public finances dampened risk sentiment and sent the euro to a 17-month low against the dollar while the US yield curve twists steeper and USD appreciates. As of 8:00am ET S&P futures are down 0.1% and Nasdaq futures slip 0.2% from their record close on Friday, as most Mag 7 stocks are lower although Nvidia climbs another 0.6% after partner Hon Hai Precision Industry reported better-than-expected quarterly revenue, pointing to sustained and elevated spending on AI infrastructure. In premarket trading, tech is lower with Semis / Memory lagging, Mag7 and Software flat. Intel tumbles 4% after a report on discussions of a potential collaboration between Taiwanese chip giant TSMC and Elon Musk’s Terafab, which Intel joined in April. Cyclicals ex-Energy are flat to Defensives with the market looking to broadening if yields stabilize. Brazil-related names are higher following preliminary election results which show Bolsonaro defeating Lula, and EWZ +11.9% pre-market. The CAC 40 in Paris was the main weak spot in Europe. Asian stocks played catch-up with Friday’s US rally. US bond yields fluctuated, with the short end leading as the selloff in Treasuries showing few signs of abating, and traders on alert for signs of bond market contagion in Europe. German bunds affirmed their haven appeal as they outperformed in Europe. French bonds were mixed, while Spanish debt lagged. Currency markets showed the biggest reaction as the euro dropped 0.5% against the dollar. Commodities are higher led by Ags and Metals with Precious leading Base; crude is lower despite unconfirmed, opposing headlines that the Saudi East/West pipeline has been shut. US economic data slate includes September services PMI (9:45am) and ISM services index (10am). Fed speaker slate empty for the session.

In premarket trading, Mag 7 stocks are mixed: Nvidia climbs 0.6% after partner Hon Hai Precision Industry reported better-than-expected quarterly revenue, pointing to sustained and elevated spending on AI infrastructure (Alphabet unchanged, Amazon -0.1%, Apple -0.2%, Meta -0.2%, Microsoft +0.4%, Tesla -0.3%)

• Align Technology Inc. shares (ALGN) are down 2.8% after Evercore ISI downgraded the medical-device company to inline from outperform, writing that “the dental macro picture has meaningfully weakened.”
• Alvotech shares (ALVO) jump 8% after the US FDA approved additional US manufacturing capacity for Simlandi, the biotech’s biosimilar to Humira.
• CH Robinson Worldwide shares fall 7.8% after the freight broker announced an agreement to acquire peer RXO (RXO +20%) for stock and cash for an implied value of $30.25 per share.
• Cboe Global Markets Inc. (CBOE) rises 1.8% as it is being upgraded to buy from hold at TD Cowen, which sees an improving outlook for the exchange operator, especially in the wake of it signing an extension of its licensing agreement with S&P Dow Jones Indices.
• Cenovus Energy Inc. shares (CVE) fall 3.1% after the Canadian energy company agreed to buy Athabasca Oil Corp. for C$12 per share at an enterprise value of C$5.7 billion ($4 billion), with the deal expected to close in December.
• Cerebras Systems shares (CBRS) rally 4.5% after OpenAI CEO Sam Altman said the company is “a close partner” of OpenAI and the two firms have “a deep engagement pushing on the frontiers of speed.”
• DraftKings shares (DKNG) are up 4.6% as BofA raises the recommendation on the online sports betting company to buy from neutral, with the analyst citing her more positive view of the predictions markets (PM) impact.
• Estée Lauder Cos. shares (EL) rise 2.8% as Barclays raised its recommendation on the beauty company to overweight from equal-weight, citing its attractive sales growth and earnings profiles.
• Harley-Davidson Inc. shares (HOG) are up 5.7% after Citi upgraded the motorcycle company to buy from neutral, writing that an acceleration in retail growth is “tough to ignore.”
• HubSpot Inc. shares (HUBS) are down 1.4% after Raymond James downgraded the software company to market perform from outperform, citing near-term uncertainty.
• Mosaic Co. shares (MOS) fall 1.1% after RBC Capital Markets cut its recommendation on the fertilizer firm to sector perform from outperform on delayed phosphate recovery.
• PTC (PTC) surges 36% after Schneider Electric agreed to acquire the company.
• Samsara Inc. shares (IOT) are up 0.9% after Jefferies started coverage on the stock with a buy rating and $50 price target, seeing strong AI-related growth prospects for the hardware-software platform.
• TSMC shares (TSM) gain 1.6% in Taipei on Monday with sentiment boosted by discussions between the Taiwanese chip giant and Elon Musk’s Terafab on potential collaboration, while shares in Intel (INTC), which joined the Terafab initiative back in April, fell 3.9%.
• Texas Roadhouse Inc. shares (TXRH) are up 2.2% after Evercore ISI upgraded the restaurant chain operator to outperform from inline, seeing a buying opportunity in the wake of recent weakness.
• US-listed stock of Brazilian companies and firms exposed to the country (NU +13%, BBD +12%) rallied as Flávio Bolsonaro surged to a surprise lead over Luiz Inácio Lula da Silva in the first round of the presidential election.
• Vaxcyte shares (PCVX) soar 56% after the pharmaceutical firm said that VAX-31, its experimental vaccine to prevent invasive pneumococcal disease (IPD) and pneumococcal pneumonia, met all primary endpoints in the OPUS-1 pivotal Phase 3 adult trial, compared to PCV20 and PCV21.
• Virtu Financial Inc. shares (VIRT) are up 3.3% after JPMorgan upgraded the market-making firm to overweight from neutral, citing a strong outlook ahead.
• Wells Fargo & Co. shares (WFC) are up 2.2% after Morgan Stanley upgraded the bank to overweight from equal-weight, seeing “a clearer path to improving profitability in 2027.”

In other corporate news OKX filed with the SEC to launch a tokenized-stock trading platform, making it one of the first major crypto exchanges to take advantage of new US rules. Digger, the last film to be released from Warner Bros. Discovery before its acquisition, was a major disappointment at the box office, taking in $8 million on its opening weekend. CME Group shelved plans to launch a round-the-clock oil contract following industry pushback. In  deals, Schneider Electric agreed to acquire industrial software firm PTC for about $22.6 billion, stepping up its effort to tap into the AI boom. North Sea oil and gas producer Ithaca Energy struck its first international deal, agreeing to buy assets in Canada from Suncor Energy.

US equity futures are slightly lower on the day. Oil slipped after Saudi Arabia cut prices of its benchmark grade to Asia as flows recover, offsetting a lift from intensified fighting in Yemen. Markets are starting the week with strains in Europe firmly in focus after policy gridlock in France sparked a selloff in the region’s more vulnerable debt.  French government bonds are underperforming regional peers, widening the 10-year yield spread with Germany by ~5 bps as budget concerns persist. The unease threatened to spread to Spain on Monday as Prime Minister Pedro Sánchez called an early election amid mounting social protests over housing, sending Spanish bonds slightly lower. Treasuries and bunds are higher as haven-demand provides support, while the euro tumbles to a 17 month lows against the USD. 

“Europe is out of favor with investors and bond market vigilantes are watching developments in the euro zone closely,” said Kathleen Brooks at XTB. “The question now is, will Spain be next?”

As Goldman wrote over the weekend, stocks continue to be disconnected from everything. Equity resilience has a simple explanation, according to Barclays’ Ajay Rajadhyaksha. “The equity market is repricing the earnings power of a technology cycle that comes along once in a generation,” he wrote. In normal times, the forces driving bonds would be expected to eventually spill over into stocks. “But these are not normal times.”

Meanwhile, Brazilian assets were set to jump after Senator Flávio Bolsonaro finished ahead of President Luiz Inácio Lula da Silva in the first round of the election, making him the overwhelming favorite to win, with Brazil likely to see a big shift to the right. Bolsonaro, seen as a more market-friendly name than Lula, had 47% of the vote, compared with the incumbent’s 45%. Fabrício Taschetto at Ace Capital saw the real strengthening some 3%. Retailers, homebuilders, shopping-mall operators and consumer and apparel companies were set to lead the rally, according to Felipe Arslan at Morada Capital.

Strategists at Citi and JPMorgan reckon that strong earnings can keep equities going despite bond market noise. JPMorgan’s Mislav Matejka sees big differences to the 2022 inflation surge, highlighting the tech outlook and backdrop for wages and labor, while Citi strategists forecast about 6% gains for global equities to year-end, driven by earnings growth.

While markets remain fragile, many stocks have already priced in the risk from higher oil and tighter financial conditions, said Alberto Tocchio, a portfolio manager at Kairos Partners.

“If oil stops rising and bond volatility calms, the next move could be less about another Nasdaq-high and more about a much healthier broadening of market participation,” Tocchio said. “France is clearly the main European risk. For now, however, I would still view this primarily as a French rather than a systemic euro-area crisis.”

Macro data and events to watch this week include services ISM this morning, FOMC meeting minutes on Wednesday and University of Michigan sentiment on Friday. The ISM Services PMI should show the economy continuing to expand in September, but at a slower pace, according to Bloomberg Economics, who note regional Fed surveys point to softer activity and demand after August’s strong readings.

Minutes from the Federal Reserve’s September meeting count among the highlights of a week with a relatively sparse economic calendar. Since policymakers raised rates at that meeting, investors have dialed back bets on a second straight increase following softer US jobs data and weaker-than-expected inflation.

In Europe, the Stoxx 600 is up 0.3% while the CAC 40 is falling 1% although that’s largely down to weakness in Schneider Electric shares. Here are the biggest European movers: 

• European stocks exposed to Brazil rise after Flávio Bolsonaro surged to a surprise lead over Luiz Inácio Lula da Silva in the first round of Brazil’s presidential election. Brazilian assets are set to jump.
• Santander rose as much as 2.7% before paring gains; Telefonica advanced as much as 2.2%, Carrefour rose as much as 1.7%; all three generate more than 20% of their revenue in Brazil, according to data compiled by Bloomberg
• Italian financial stocks are on the move after Intesa Sanpaolo said its improved offer for Banca Monte dei Paschi di Siena has won the backing of the target’s biggest shareholder. While shares in Monte dei Paschi, Intesa and Unipol gain, Mediobanca slips.
• BT shares gain as much as 1.9% after the British telco agreed to buy struggling broadband provider TalkTalk in a deal that will inflict a £400 million hit on the company’s cash position, but should help protect the payments it receives from TalkTalk.
• Genmab climbs as much as 5%, to the highest since October 2023, after the Danish biotech firm releases Phase 2 data for Rina-S in ovarian cancer. Jefferies says this further de-risks the bull case for the upcoming Phase 3 readout.
• Air Liquide shares rise as much as 4.1% to the highest since July 27. Analysts reacted positively to the industrial gas supplier’s new strategic targets through 2030, including plans for a €4 billion share buyback program over 2027-2028. This comes ahead of the group’s virtual capital markets day later Monday.
• Schneider Electric falls as much as 9.2% in Paris, the most since April 2025, as an agreement to acquire PTC draws a cautious initial response from analysts. Concerns center on the size and financing of the transaction, as well as uncertainty over AI disruption and whether the deal can strengthen Schneider’s competitive position.
• IG Group falls as much as 4%, extending Friday’s 23% selloff, after Panmure and RBC analysts trim estimates and price targets for the stock following the trading platform’s profit warning on Friday.

Asian stocks played catch-up with Friday’s US rally, rising as softer US jobs data alleviated pressure on the Federal Reserve to keep raising interest rates and investors scooped up tech shares. The MSCI Asia Pacific Index climbed as much as 1.3%, the most in about a month, with Taiwan Semiconductor Manufacturing Co., MediaTek and Tokyo Electron as the biggest contributors.  Mainland China and South Korea were closed for a holiday. Other markets traded higher following Friday’s report that showed US employers added fewer workers than forecast in September. Investors are also assessing Middle East developments, after Yemen launched a military campaign to recapture all Houthi-held territory. Shares of TSMC jumped 3% in Taiwan following a report that the chip giant is in discussions with Elon Musk’s Terafab on potential collaboration.

In FX, the Bloomberg dollar spot index rose 0.2%, closing in on its highest level of the year as EUR/USD dropped as much as 0.8% to 1.1611, its weakest since mid-May

In rates, German bunds affirmed their haven appeal as they outperformed in Europe. French bonds were mixed, while Spanish debt lagged. Treasuries fluctuated, with the short end leading.  US yields cheaper by 1bp across long-end of the curve while front-end outperformance steepens 2s10s and 5s30s spreads by 2bp and 1.5bp on the day. US 10-year yields trade near unchanged at 5.27% with gilts lagging by 2bp and bunds, along with French debt, slightly outperforming. Treasuries curve twist steepens with front-end outperforming, where 2-year yields are lower by around 1bp on the day. Price action supported by bigger steepening move seen across German bonds where front-end yields are lower by 5bp on the day, along with WTI futures which trade down 1%. German bunds affirmed their haven appeal as they outperformed in Europe. French bonds were mixed, while Spanish debt lagged. Treasuries fluctuated, with the short end leading. IG dollar issuance slate empty so far. Dealers are expecting around $100 billion in new debt sales for October, compared with $195 billion seen in September. Multiple issuers stood down last week as unfavorable credit conditions kept funding costs elevated. Treasury auctions this week kick off Tuesday with $58 billion 3-year notes, followed by $39 billion 10-year and $22 billion 30-year reopenings Wednesday and Thursday

In commodities, Brent crude swung between gains and losses as traders remained wary of disruptions to Middle East flows. While Saudi Arabia cut prices of its benchmark grade to Asia, the kingdom’s state producer warned about the risk of low stockpiles and fighting in Yemen intensified. WTI futures lower by around 0.70%. Precious metals are advancing, with spot silver up over 2%.

US economic data slate includes September services PMI (9:45am) and ISM services index (10am). Fed speaker slate empty for the session

Market Snapshot

Top Overnight News

• Oil fluctuated in jittery trading, as Saudi Arabia cut prices of its benchmark grade to Asia, the kingdom’s state producer warned about the risk of low stockpiles and as fighting in Yemen intensified: BBG
• Yemen’s internationally recognized government launched a full-scale military campaign to recapture Houthi-held territory after weeks of escalating conflict between the Iran-backed group and Saudi Arabia: BBG
• Flávio Bolsonaro surged to a surprise lead over Luiz Inácio Lula da Silva in the first round of Brazil’s presidential election, making him the overwhelming favorite to win the runoff and take Latin America’s biggest economy sharply to the right: BBG
• The euro fell to its weakest level since May 2025, as France’s deepening fiscal crisis and the prospect of fresh political upheaval in the region rattled European markets: BBG
• Spanish PM Sanchez gambles on snap election to end parliament deadlock: BBG
• Democrats Inch Into Red Territory, but Have Problems on Home Turf: WSJ
• Intel stock slides as TSMC explores Terafab tie-up, analyst flags share losses: RTRS
• Savills’ Prime London index is down about 27% since its peak in 2014, as a cocktail of taxes, political and economic shocks have created more than a decade of misery for the owners of the city’s finest homes. When combined with the consumer price index, the real-terms drop is more than 49%: BBG
• US goes into midterm elections with a less dynamic form of full employment: RTRS
• US Senators Warren (D) and Hawley (R) are reportedly beginning a probe into how home and auto insurers process claims: WSJ.
• US Army tests counter-drone tech at Mexican border as cartel drone use rises: RTRS
• All B-1 Bombers Returning to U.S. From U.K. Base: WSJ
• Bank Stocks Are Haunted by the Ghosts of 2023: WSJ

A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the week mostly higher in holiday-thinned conditions and following the gains last Friday on Wall St, where stocks were underpinned as Fed rate hike bets were unwound in a knee-jerk dovish reaction to the weak jobs data. ASX 200 eked marginal gains with upside in miners, materials and healthcare helping keep the index afloat, although gains were limited by weakness in utilities and consumer stocks. Nikkei 225 rallied and briefly reclaimed the 70,000 level amid strength in tech stocks, which seemed to also benefit from the holiday closure in South Korea. Hang Seng lagged amid the continued absence of mainland participants and stock connect flows, while automakers were also pressured following reports that the UK is considering imposing tariffs on Chinese electric vehicle imports amid concerns that Beijing is flooding the market with state-subsidised cars.

Top Asian News

• Brazilian President Lula won around 45.2% of votes, and Flavio Bolsonaro won around 47% of votes in the first round of Brazil's Presidential Election and will head into a runoff on October 25th. Brazil's President Lula said it was an unexpected result and he was convinced that he would win in the first round, while Bolsonaro said he is very happy with the results and that Brazil wants change.
• Japanese PM Takaichi said that realising strong, lasting growth is her starting point and will achieve virtuous cycle through GDP growth. Takaichi said that they will seek to draw in domestic investment with massive long term fiscal expenditure, deployed in a well-planned and predictable manner. On debt, she said the government will control the annual debt issuance amount appropriately while scrutinizing the economy, prices, tax revenues, interest rates, debt servicing costs and market developments.

European bourses start the week mixed, with Spain's IBEX 35 outperforming after Brazil’s Bolsonaro took a surprise lead over current President Lula in the Presidential Election. A factor which has helped buoy those companies with exposure to Brazil. Elsewhere, France's CAC 40 lags following recent M&A and broker updates in the luxury sector. Sectors highlight a positive bias. Chemicals lead, with Optimised Personal Care and Food, Beverages & Tobacco following, while Industrials is the only sector in the red.

Top European News

• Spanish PM Sanchez called for an early election, to be held on November 29th, after the government failed to pass a housing bill through the Spanish Congress.
• UK government is to announce plans for a social media ban for under-16s in the coming weeks amid concerns that children are being exposed to harmful content, according to The Times's Swinford.

FX

• Snapshot: G10s are mixed against the USD, with the Aussie leading whilst the EUR lags on regional political woes.
• DXY is a touch firmer this morning and trades within a 101.85 to 102.53 range. Upside is broadly facilitated by a weak EUR, which has been pressured by ongoing French fiscal woes. The narrative is that the latest Budget proposal from PM Lecornu is not sufficient to solve the fiscal situation in France; moreover, the French budget watchdog suggested that current growth assumptions for the plan are optimistic. In the near term, focus will be on whether the draft budget can be passed; as it stands, National Rally Leader Le Pen has voiced her support to amend the current draft, rather than outright block it. Her aim would be to show fiscal responsibility ahead of the 2027 Presidential election. Should the draft budget fail, the likely option for Lecornu is to invoke Article 49.3.
• France aside, there has also been some focus on Spanish politics; PM Sanchez announced an early election for November 29. This comes after he failed to pass emergency housing bills through Congress, which has led to some unrest within the region. The EUR was ultimately little moved on the announcement itself. As it stands, the ruling coalition is losing in polls, with the People’s Party leading with 34%. Sanchez is likely banking on using the blocking of the housing bill by the far-right in his party’s favour; however, other key talking points such as immigration and the economy remain at the forefront of minds.
• JPY held firmer for much of the overnight action, but has held around the unchanged mark throughout the European morning. Initial strength was perhaps associated with positive commentary from PM Takaichi, where she told markets to “rest assured” over the country's spending plans; she essentially pledged fiscal discipline.

Central Banks

• ECB's Lane said underlying inflation indicators indicate that an upward shift in medium-term inflation has not taken hold but that the recent surge in energy prices can be interpreted as a second wave of the energy supply shock, following the initial jump at the start of the Middle East conflict and the temporary fall-back during the summer. This second wave of the energy supply shock poses direct upside risks to the inflation outlook but also downside risks to the growth outlook. In any event, the overall size and duration of the energy supply shock remain highly dependent on geopolitical developments. Lane reiterated the meeting-by-meeting and data-dependent basis.
• ECB's Nagel said the inflation outlook faces upside risks and that uncertainty requires a flexible response rather than inaction while there is currently no clear signs that inflation has fed through into price or wage setting.
• BoJ Deputy Governor Uchida said adoption of AI might have positive and negative implications for productivity and labour markets, while he added that AI has become a key topic of discussion among central banks, including at the BoJ's monetary policy meetings. Furthermore, he said AI has implications for several key monetary policy variables, including the output gap, financial conditions and neutral-rate measures, as well as noted that AI represents a strong positive demand shock, adding upward pressure to both the economy and prices, while it could also influence the supply side, potentially in a positive way by lifting productivity and supporting capital accumulation.

Fixed Income

• A mixed start to the week for fixed income. USTs are near-enough flat despite the numerous key energy/geopolitical updates this morning, looking ahead to the ISM print for more timely insight after Friday’s weak Payrolls. Currently, USTs are in a narrow 104-10 to 104-13+ parameter, well within the 104-07 to 105-08 band from Friday.
• Focus this morning, energy/geopolitics aside, has been firmly in Europe. Firstly, OATs find themselves under further pressure as the fiscal situation remains fraught and is likely to continue to be so well into next year, a point that has spurred much commentary around ECB-level intervention in the market. Perhaps more likely, the weakness in European fixed income, particularly if the OAT situation reverberates through the periphery, could dissuade some from supporting a back-to-back hike in October.
• OATs hit a 108.32 low, down by c. 60 ticks, but have since lifted modestly off that to around 108.55. This morning, the OAT-Bund 10yr yield spread hit a 147bps high today, just shy of the 151bps peak from last week.
• Competing with France for the limelight is Spain. After a period of speculation, PM Sanchez has started the process to hold early elections on the 29th of November. Once again, opposition PP is ahead in the polls, but incumbent Sanchez will be banking on the housing bill dispute and the relatively limited chance of PP and moderate parties coming to a coalition agreement.
• Bonos not too reactive thus far, as the early election was on the cards. However, it adds to the fractured European backdrop at the moment and provides further political risk to the region. Bono-Bund hit a 66bps peak today, just shy of the c. 70bps high from last week, which printed alongside the French action.
• Finally, for the UK, domestic updates are comparably light as we count down to the budget. Action is instead driven almost entirely by the energy moves, with Gilts currently lower by around 30 ticks but around 10 off worst levels.

Commodities

• WTI Nov and Brent Dec futures have pared some of the earlier downside following fresh supply and geopolitical developments. The complex initially remained pressured by Friday’s G7 agreement to release 100mln bbls of diesel and crude from emergency reserves, Trump ruling out a US diesel export ban and Kpler data showing Middle East oil exports exceeded pre-war levels last week. OPEC+ also kept November production quotas unchanged, while Saudi Aramco surprisingly cut its OSP to Asia to a USD 5/bbl discount (exp. USD 5/bbl increase).
• The complex caught a bid this morning after AFP sources reported that Saudi Arabia’s East-West oil pipeline halted pumping following a new attack, with “big damage” reported, while Iranian Armed Forces Chief of Staff Major General Abdollahi warned that if a new war is launched against Iran, its consequences will engulf everyone. Focus also remains in the Bab al-Mandeb Strait, after Yemeni government forces now say they have successfully taken control of Bab al-Mandab after earlier claiming to have seized Dhubab, although the Houthis deny this.
• WTI rebounded from a USD 89.31/bbl low towards USD 92/bbl, within a USD 89.31-91.88/bbl range, while Brent recovered from a USD 100.65/bbl low to above USD 103/bbl, within a USD 100.65-103.40/bbl range. Dutch TTF is modestly firmer in relatively contained trade and resides within a EUR 74.20-76.52/MWh range.
• Precious metals are firmer but to varying degrees, with spot gold relatively contained within Friday’s range following post-NFP volatility, as the softer jobs report prompted markets to pare near-term Fed hike expectations, while the subsequent Dollar rebound limits upside. Spot gold trades within a USD 4,124-4,170/oz range, while spot silver outperforms within a USD 60.37-61.79/oz range.
• Base metals are modestly firmer as the reduction in near-term Fed hike expectations provides some support, although upside remains capped with mainland China absent for the National Day holiday and therefore little participation from the complex’s largest consumer. 3M LME copper trades within a narrow USD 14,281.83-14,388.38/t range.
• Saudi Arabia's East-West pipeline is flowing as normal, Bloomberg reported citing sources. It was earlier reported by AFP that Saudi Arabia's East-West oil pipeline pumping reportedly halted after a new attack by the Houthis over the weekend.
• Saudi Aramco CEO said oil market pressure will worsen until the Strait of Hormuz reopens, refilling global oil stockpiles could take two years after the reopening of the Strait and that global oil releases provide only temporary relief for markets. The CEO added that global oil demand needs to rise by at least 2mln BPD over the next 18 months to draw down current inventories. Oil demand is recovering and inventories need replenishment. On Brent, the CEO forecasted that it could have reached USD 200/bbl without the East-West oil pipeline.
• Saudi Arabia set November Arab light crude oil OSP to Asia at a discount of USD 5/bbl vs Oman/Dubai average, while it set the OSP to Northwest Europe at a premium of USD 0.85/bbl vs ICE Brent, and set the OSP to the US at a premium of USD 4.60/bbl vs ASCI.
• Major OPEC+ producers agreed to maintain oil production quotas at current levels for November, according to delegates.
• ConocoPhillips (COP) sees US oil production exceeding 14mln BPD in 2027 if prices remain at current levels.
• Asian gold producers reportedly began hoarding supplies following recent increases in prices and are stepping up efforts to capture more of the value from gold boom through increased refining or discouraging exports through taxes or central bank purchases
• The EU would “significantly limit” Ukraine’s access to the EU’s agricultural markets and lucrative farming subsidies if Kyiv became a member of the bloc, according to proposals for EU enlargement cited by FT.

Trade/Tariffs

• US President Trump said on Friday that they didn't jump the gun on the Alaska pipeline and warned if Korea doesn't do the pipeline, they will charge South Korea more.
• The UK is reportedly preparing plans to impose import tariffs on Chinese EVs to meet a key demand from the EU to ensure it remains part of the Made in Europe local-content rules, The Times reported.

Geopolitics: Iran

• A US official told Semafor that there is a real possibility that Iran may want to inflict some pain on US President Trump before the midterms, and that Iran may do something in the next couple of weeks.
• The US removed all its B-1 bombers from the UK's Fairford air base amid security concerns, while Axios reported that a US official said the base was under threat of attack by Iran.
• Iran said the Strait of Hormuz will not reopen until its conditions are met.
• Iranian Foreign Minister Aragchi stated that Iran is serious and firm in both defending itself and advancing diplomacy, while he emphasised that if the enemies once again take the path of military confrontation, they will face a stronger response than in the past, but noted Iran remains ready to achieve a just and honourable solution through diplomacy.
• Iranian Foreign Ministry senior official said Iran is reviewing Washington’s response to the 7-day proposal sent through intermediaries, as other officials offered differing assessments of whether further negotiations with the US were needed, according to Iran International.
• IRGC's Commander-in-Chief Advisory Group head Fadavi warned that if the US launched a ground attack, Iran will target vessels, bases and any place belonging to the US, while he also stated that Iran has not even wasted a day to strengthen its military capability.
• Pakistan's Deputy PM and Foreign Minister, Federal Minister of Defense and Chief of Army Staff will pay an official visit to Riyadh, Saudi Arabia on Monday to attend a meeting of the SPDC established under the Makkah Joint Defence Agreement.
• Yemeni Government Forces said they have successfully taken control of Bab al-Mandab, while the Houthis denied that government forces made any progress.

Geopolitics: Ukraine

• Ukrainian President Zelensky said Ukraine will strike Russian refineries in response to Moscow's "new doctrine" of airstrikes. In response, Russia's Kremlin said Ukraine will “pay the price” if it strikes Russian oil refineries.
• Russia said it would intensify attacks on Ukrainian infrastructure, while the Russian Foreign Ministry separately warned that diplomats and foreign officials in Kyiv were in mortal danger.
• Russia said it struck a cargo vessel off Odessa and downed 559 drones. It was also reported that Russia struck an infrastructure facility in Zaporizhzhia, although there were no preliminary reports of casualties in the Zaporizhzhia attack, according to Novyny Live.
• German Foreign Intelligence Chief said Germany is at risk of getting into a violent conflict with Russia and that Russian President Putin has passed the point where he could simply stop the war with Ukraine without risking his own power.

US Event Calendar

• 9:45 am: Sep F S&P Global US Services PMI, est. 58.7, prior 58.7
• 9:45 am: Sep F S&P Global US Composite PMI, est. 58.3, prior 58.4
• 10:00 am: Sep ISM Services Index, est. 55, prior 55.4

DB's Jim Reid concludes the overnight wrap

The French situation will dominate markets in the early part of this week. Last week the Franco-German 10yr spread widened by +32bps to 141bps, which is the biggest weekly widening in available Bloomberg data back to 1990, the year of German reunification. At one point on Friday, the spread hit +160bps so we were on the edge of a mini panic. Ironically, the weak US payroll print seemed to turn things around as some global rate hikes got priced out. The big question is whether this is the start of a new euro sovereign crisis or whether markets have already overshot. After listening to Friday’s excellent DB webinar on France that had 600 listening in, my bias is towards the latter — although I suspect markets may continue to force political responses in the near and medium-term. France’s fiscal problem is real and has been building for years, but that is why the timing of the latest move is so interesting: there has been little genuinely new in the fundamentals. Instead, an aggressive ECB hiking cycle had been priced into a market where leveraged investors had become comfortable owning French front-end carry. Once OATs started to see large VAR swings, that positioning was flushed out and the move became disorderly. DB’s rates team now sees OATs as around 40-50bps cheap even relative to France’s already weak fundamentals. So the house view is not that France suddenly looks healthy; rather, a very large political-risk premium is now embedded in prices and the eventual political outcome may be less damaging than the market fears.

What happens next could therefore be quite different from the early stages of the euro crisis. The pressure itself may become the circuit breaker. Higher French yields are already tightening financial conditions and should make it progressively harder for the ECB to deliver the hikes markets had been pricing; DB economists see the terminal rate nearer 2.75%, perhaps 3%, rather than the 3.5% priced in 8 business days ago and 3.20% now. Interestingly, around the weakest point on Friday when the France-German 10yr spread hit +160bp, the ECB terminal rate slumped to 3.01%. So France and the ECB cycle are inextricably linked at the moment.  

Meanwhile the French budget is more likely to pass than in the last two years, RN is increasingly trying to establish fiscal credibility, and French banks enter this episode with much less of the sovereign-bank feedback problem seen in earlier peripheral crises. None of that means the lows in French assets are necessarily in — our strategists are not yet comfortable simply buying OATs outright — but the faster contagion develops, the greater the pressure on French politicians to produce credible spending reform and on European institutions eventually to provide a backstop if markets materially overshoot fundamentals. In other words, there is a plausible path where things get worse before they get better, but where the sell-off itself accelerates the solution.  

So far this morning the Euro has seen a relatively large slide for this time of day, trading -0.72% lower. However European equity futures are fairly flat alongside US futures. There has been talk overnight about the Spanish government calling for an early election after being defeated in two housing bills on Friday. We may know as soon as today. So another topic to watch in Europe.

Elsewhere, Brazil’s election delivered a sizeable surprise overnight, with right-wing Senator Flávio Bolsonaro finishing ahead of President Lula in the first round and the contest now heading to a run-off on October 25. With virtually all votes counted, Bolsonaro had around 47.0% of valid votes against roughly 45.1% for Lula, having gone into the weekend with private polls generally showing Lula ahead. The result was accompanied by a strong showing for the right in congressional races, with our LatAm team noting that right-leaning parties increased their share of Senate seats from 47% to 63%. Brazilian assets are likely to open strongly today with equity ETFs trading as much as 10% higher in Asia, while our LatAm rates strategists expect a broad rally in DI rates of around 100bp as election premium unwinds and favour front-end receivers.

In Asia, the Nikkei (+2.53%) is leading gains, with technology stocks again benefiting. Elsewhere, the S&P/ASX 200 (+0.14%) and the Hang Seng (+0.02%) are quiet. South Korea’s equity markets remain closed for the National Foundation Day holiday, while mainland Chinese markets will be shut until Thursday.  

Early morning data showed that growth in Japan’s services sector slowed in September and came in below expectations, as weaker business activity and softer new orders offset stronger employment growth. The Services PMI declined to 51.3 in September from 52.5 in August.

Given the high stress and high alert in bond markets, the main focus in the week ahead will be on central banks, with the minutes from the September FOMC meeting on Wednesday and the ECB’s account of its latest meeting on Thursday. There is also a busy run of central-bank speakers, while the data calendar includes US ISM services today and the University of Michigan survey on Friday, a run of German activity data through the week, and Japanese wages on Wednesday.  

In the US, the week begins in the shadow of Friday’s important September employment report. Headline payrolls rose just +29k, compared with +133k expected, while private payrolls increased +46k versus +127k expected. There were also 60k of downward revisions to headline payrolls over the previous two months, and average hourly earnings rose only +0.1% against +0.3% expected. Nevertheless, our US economists think the details still point to a broadly stable labour market. The unemployment rate edged up only slightly to 4.175% from 4.141%, the broader U-6 rate fell a tenth to 7.6%, and participation rose two-tenths to 61.8%, its highest since May last year. Prime-age participation and the employment-to-population ratio also recovered further after their unusually large June declines. So although the headline payroll number was disappointing, the wider labour-market picture remains relatively resilient, particularly alongside recent ADP and jobless-claims readings, and our economists continue to expect two further 25bp Fed hikes over the next couple of quarters. The market is pricing in another 86bps over the next 12 months, down from 100bps early last week but up from 70bps just after the payroll release. So lots of vol on Friday in rates and fixed income as we'll see in the review of the week at the end.  

The highly unsettled bond market makes the incoming US data and Fed communication particularly relevant. The first key release is the September ISM services index today, where our economists expect the headline gauge to rise to 55.9 from 55.4 in August. Tomorrow brings the August trade balance, while Wednesday’s September FOMC minutes should provide more colour on the near-term policy outlook. Since the meeting, Fed communication has broadly reinforced the quarterly pace of rate hikes implied by the September SEP. Vice Chair Jefferson and New York Fed President Williams have both indicated a preference to take some time to assess incoming data before deciding on the next move, but several officials have continued to argue for additional tightening. So the minutes will be worth watching for how the broader Committee is framing the current tightening cycle and for its discussion of the neutral rate, where estimates shifted higher in the September SEP.

The rest of the US calendar is lighter. Thursday brings initial jobless claims and August wholesale trade sales, before attention turns to the preliminary October University of Michigan survey on Friday. Our economists expect consumer sentiment to be broadly unchanged at 48.0, versus 48.1 in September. The survey may attract some extra attention with the November 3 midterm elections approaching. More broadly, our US economists currently estimate Q3 real GDP growth at 3.3% annualised, and this week’s activity data will help refine that estimate.

Moving to Europe, the ECB publishes the account of its September meeting on Thursday, alongside a packed speaker calendar. It'll be interesting to see whether the French situation gets prominent mentions. Germany has a particularly busy run of activity data, with August factory orders tomorrow, industrial production on Wednesday and the trade balance on Thursday. France releases August industrial production tomorrow, while Italy follows on Friday. Sweden publishes September CPI on Wednesday and Norway on Friday. In the UK, the BoE releases its Bank Liabilities and Credit Conditions surveys on Thursday, when Governor Bailey is also due to speak.
In Asia, Japan is the main focus. August labour cash earnings are released on Wednesday, with our Chief Japan Economist expecting same-sample total cash earnings growth to accelerate to 3.6% year-on-year from 2.9% in July. The September Economy Watchers survey follows on Thursday and August household spending on Friday. China’s September foreign-exchange reserves are also due on Wednesday.

Recapping last week now and of course the big story was the European contagion, with genuinely historic moves in spreads last week. As we noted at the top, the Franco-German 10yr spread widened by +32bps last week to 141bps, which is the biggest weekly widening in available Bloomberg data back to 1990. Similarly in Italy, the 10yr spread over bunds widened +23bps to 114bps, the biggest weekly jump since April 2020 during the initial wave of the Covid-19 pandemic. There were also big moves in absolute yield levels too, with Germany’s 10yr bund down -14.0bps to 3.46%, its biggest weekly decline since the week of the Liberation Day tariff announcements in April 2025. And in turn, that had knock-on effects elsewhere, with the STOXX 600 down -1.14% despite a +0.75% rebound on Friday, whilst France’s CAC 40 fell -2.24% (+0.79% Friday). Meanwhile, the Euro itself weakened -1.19% against the US dollar.  

Given the financial contagion, there was growing doubt about whether central banks would hike again in October. And that was cemented after the US jobs report for September was softer than expected. So that led investors to dial back rate hike pricing, with the chance of a Fed hike in October falling from 64% to 23% over the week, whilst an ECB hike in October went from 42% to 14%. Nevertheless, the wider bond selloff still pushed the 10yr Treasury yield up +11.0bps over the week to 5.27%, its 5th consecutive weekly rise. The volatility on Friday was significant with 10yr US yields trading as low as 5.155% just after payrolls.

Whilst geopolitics wasn’t the biggest market story last week, oil prices continued to move slightly higher. Looking at Brent crude, prices were up +4.94% last week to $102.25/bbl, using the December contract for consistency given the roll. But there was some relief for refined products, with European diesel prices falling -7.31% (-6.62% Friday) as the G7 on Friday announced a plan to release as much as 100 million barrels of oil and diesel reserves.  

Meanwhile, US equities were relatively steady, with the S&P 500 only down -0.27% on the week. However, there were big swings over the week, with the index falling at the start, before a +0.73% jump on Friday after the jobs report led to a dovish repricing. Finally, credit spreads widened on both sides of the Atlantic, with US IG (+2bps) and HY (+12bps) widening, while Euro IG (+14bps) and HY (+47bps) saw their biggest weekly jump since the post-Liberation Day sell off last April.

Tyler Durden Mon, 10/05/2026 - 08:38

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