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Airlines Plan 'Rescue Flights' For Stranded Israelis In UAE After FlyDubai Incident

Via The Cradle

Israeli national airline El Al announced on Friday that it had canceled flights scheduled to bring Israelis home from Dubai after the UAE withdrew landing permits for Israeli carriers.

"Due to the cancellation of approval for Israeli companies to land in Dubai, as was reported by the authorities in Israel, we are forced to cancel, at this stage, our rescue flights," the airline said in a statement posted on social media.

AFP/Getty Images

El Al said it remains prepared to operate charter flights to Dubai to bring Israeli citizens home as soon as it receives official approval.

The Israeli airline did not explain why the landing permits had been withdrawn. Emirati authorities have not provided an explanation.

Israeli passengers were stranded in the UAE after an incident on a FlyDubai flight from Dubai to Tel Aviv. The plane’s copilot allegedly stabbed the captain and tried to crash the aircraft before passengers and crew managed to enter the cockpit to restrain him.

Other FlyDubai pilots who happened to be passengers on the flight made an emergency landing in the Saudi city of Tabuk.

Emirati authorities ordered an investigation to establish the circumstances and motives behind the incident. Israeli authorities quickly claimed the incident was a terror attack.

Israeli Prime Minister Benjamin Netanyahu claimed in a Fox News interview that the copilot had undergone "Islamist radical indoctrination" and that the man was suicidal. Netanyahu gave no evidence for the claim.

Israeli Defense Minister Israel Katz went further, calling the incident an “attempted jihadist terrorist attack” and saying the copilot intended to crash the aircraft with everyone aboard.

One of the passengers, 50-year-old Yaniv Hayun, claimed that he ran to the cockpit after the stabbing and stabilized the plane after it plunged 20,000 feet toward the ground. 

Hayun, the owner of a plumbing company in Israel, has no background in aviation. He claimed​ he knew how to pull the plane out of its nose-dive, saving more than 170 people, after watching an aircraft crash TV show.

A pilot interviewed by CNN said that aspects of the plane's fall “did not make sense” and that, had the plane plunged so fast, it would have “disintegrated completely.”

The pilot in the CNN OutFront clip is Aaron Murphy, a commercial pilot and flight instructor. He is sitting in a flight simulator recreating the Flydubai FZ1073 incident so viewers can see what the cockpit and the aircraft itself would have looked like during the sudden… https://t.co/SV6zmXfCCa pic.twitter.com/JOZiSn9nwv

— xpos (@blame_d_cat) October 1, 2026

One day before the incident took place, Netanyahu held a security establishment assessment and talks with opposition leader Yair Lapid over an alleged, pre-Israeli election “security threat” that the premier had announced earlier on Tuesday. 

The FlyDubai incident has proven politically useful for Netanyahu, who met with Hayun in front of the media, hailing him as a hero. Netanyahu is seeking a seventh term as prime minister in Israel’s upcoming Knesset elections, scheduled for October 27.

Tyler Durden Fri, 10/02/2026 - 13:55

Relatives Of Renee Good Sue Government, ICE Agents Over Fatal Shooting

Authored by Zachary Stieber via The Epoch Times,

Renee Good's family on Oct. 1 sued the U.S. government and Immigration and Customs Enforcement (ICE) officers, alleging violations of the law occurred in the fatal shooting of Good in January.

The civil complaints were lodged in federal court in Minnesota, where Good was shot by an ICE officer after she declined to stop her vehicle and drove toward an agent during a traffic stop.

The complaints say that the agent who shot Good violated the U.S. Constitution's Fourth Amendment, which bars unreasonable searches and seizures; government policy that only permits deadly force when there is an imminent threat of death or serious injury; and federal law by committing battery without any legal justification for the shooting.

He and other Department of Homeland Security (DHS) personnel at the scene also inflicted emotional distress upon Good by illegally confining her even though she had not committed or threatened any violence, nor broken any law.

The filings say Good, who was with her wife, Becca Good, had stopped in her neighborhood and honked her horn to alert neighbors that federal officers were there to conduct immigration enforcement operations. They claimed Good was attempting to "drive slowly away" when she was shot.

The lawsuits seek damages. One requests a bench trial; the other requests a jury trial.

"Renee told masked agents she wasn't mad at them; her last words clearly reflected her state of mind. Renee had the right to speak, express herself, assemble, observe and leave the scene unharmed and alive," said Antonio M. Romanucci, founding partner of Romanucci & Blandin and one of the lawyers representing Good's family.

"Today, these lawsuits are the beginning of the ultimate legal weapon in uncovering the truth behind this unlawful use of deadly force and the nefarious conspiracies behind the invasion of American cities by American law enforcement officers."

Brett Ganger, Renee Good's brother, said in a statement, "I stand here with fierce determination to do what is right for my sister, for her children, and for our country - and that is to insist on accountability."

Becca Good added: "What happened to us should never happen to any family. No child should grow up without a parent because of it. No one should lose their sister or their daughter. No one should have to live without their soulmate. Accountability - real accountability - is the only way to make sure that no other family has to go through what we have."

The White House and DHS did not return requests for comment by the time of publication.

A Department of Justice spokesperson told The Epoch Times via email that it does not comment on pending litigation or investigations.

Tyler Durden Fri, 10/02/2026 - 13:25

Digging Starts On New $16 Billion Train Tunnel Project Under Hudson River

Elected officials in helmets and yellow jackets gathered in New Jersey on Monday for the ceremonial launch of a massive boring machine that in days will begin drilling through the solid rock of the Palisades Cliffs in New Jersey, the initial phase of the Hudson Tunnel Project from New Jersey to New York Penn Station.

The new tunnel is just one part of a massive infrastructure project designed to ease the congestion of trains traveling in and out of New York City.

The existing tunnel was built in 1910.

The project will add two tunnels under the Hudson River for Amtrak and NJ Transit trains, which transport hundreds of thousands of commuters daily between New York and New Jersey. Its estimated cost is $16 billion, and completion is projected for 2035.

Under President Joe Biden, the Department of Transportation authorized $11 billion in grants and financing for the Hudson Tunnel portion of the project.

In October 2025, White House Office of Management and Budget Director Russell Vought announced it was freezing federal funding for the project over "unconstitutional DEI principles."

But, as Nicholas Zifcak reports for The Epoch Times, New York and New Jersey sued the federal government, which was forced to reinstate funding on June 29 after U.S. District Judge Jeannette Vargas ruled Vought's move unlawful. The federal government initially appealed, but on Sept. 17 the Department of Transportation dropped the appeal.

"Did they try to stop us in two thousand different ways? Did they try to put a log in our path, whether it was from Washington, New York, New Jersey, did we say ... we are building this tunnel?" said Sen. Chuck Schumer, speaking in North Bergen, New Jersey, at the drilling launch.

The Hudson Tunnel Project is part of the Northeast corridor modernization being implemented by the bi-state Gateway Development Commission. It is just one of 10 projects intended to upgrade the rail lines from Newark, New Jersey, to New York Penn Station.

The Vargas ruling allowed the Hudson Tunnel Project to move to the next phase: Two boring machines will begin drilling through one mile of hard rock under the Palisades Cliffs in New Jersey. The first phase is expected to be completed within one year, then the next phase of drilling under the river will begin.

A main part of the Hudson Tunnel Project is revamping the North River Tunnel.

The existing two-track North River Tunnel serving Amtrak and NJ Transit is one of the main reasons for delays in and out of Penn Station for hundreds of thousands of daily passengers.

The North River Tunnel will be updated so that once complete there will be four rail lines in and out of Penn Station.

  OCTOBER ONLY.$10 OFFYOUR NEXT ORDER.$30 min. Ends Oct 31. One per customer.GET MY $10 OFF →Signs you up for ZeroHedge Store emails. Can't be combined. Every order helps support ZeroHedge. Tyler Durden Fri, 10/02/2026 - 12:55

Another Tanker Struck & Damaged By Iran In Strait Of Hormuz

Update(1233ET): On Friday there are reports of another foreign tanker which has been struck and damaged in the Strait of Hormuz. Several similar drone attacks have occurred this week, and over the last few days - however unlike with prior attacks these latest are not being heavily featured in the media, and have also made surprising little impact on oil prices.

New UKMTO alert: Another tanker struck and damaged.

6th alert in last couple of days pic.twitter.com/CTMHttKNET

— Chris Shipping 🚢🚢 (@christankerfund) October 2, 2026

*  *  *

The US has deployed two additional Patriot missile batteries to Saudi Arabia and Qatar to protect energy infrastructure from aerial threats, according to a new report, reinforcing the urgent need to defend allied energy infrastructure ahead of potential renewed strikes on Iran. The report came before Thursday's news that the Department of War is sending a third aircraft carrier strike group and additional Marine Corps ships to the region.

Axios reported late Thursday that one Patriot battery was sent last month to protect a key Saudi oil facility, while another was deployed to defend a natural gas plant in Qatar.

"The U.S. military transferred batteries and interceptors to the Middle East from other regional commands, raising concerns about readiness in other parts of the world," the report said.

Trump told reporters yesterday that he was considering renewing a bombing campaign in the coming weeks. "Now I have to make a decision: either Iran signs the deal, or it won't exist any longer," he warned.

The urgent need for two more Patriot batteries in the region, designed to intercept aircraft, cruise missiles, certain ballistic missiles, and one-way attack drones, comes as Iran and proxy forces have hit critical energy infrastructure in Saudi Arabia and Qatar.

The latest attack on Saudi infrastructure came last month, when Iranian proxies hit the critical East-West pipeline, rendering it inoperable for weeks. Flows were restored only last week. Meanwhile, the latest Goldman data shows Hormuz crude flows have returned to pre-war levels as Tehran's grip on the critical maritime chokepoint erodes.

Also overnight, a report said the DoW is preparing to send a third aircraft carrier strike group and additional Marine Corps ships to the Middle East, adding 9,000 to 10,000 more troops to the region. That news sent Brent crude futures to nearly $104 a barrel overnight, but the oil benchmark slipped below $100 as trading moved through Asia and Europe and into the early US session.

Tyler Durden Fri, 10/02/2026 - 12:33

CNN Concedes Republicans Will Keep The Senate If The Polls Miss Like They Have Before

CNN chief data analyst Harry Enten said Wednesday that Republicans have beaten their September polling in Ohio, Iowa and Michigan by wide margins in recent election cycles. If that pattern repeats in November, the GOP could keep control of the Senate despite current Democratic leads in all three states.

With just over a month before the midterms, Democrats have spent weeks enjoying a Senate map that looked impossible a year ago. Democrats need to net just four seats to win the majority. Republicans started the second half of President Donald Trump's term with what looked like a firm hold on the upper chamber. The Democrats' original plan was to defend Michigan, Georgia, and New Hampshire, then take Republican seats in Alaska, Maine, North Carolina, and Ohio. Then the map got bigger for the Democrats. Trump's falling approval numbers and voters' frustration with the economy gave Democrats openings in states the party had long given up on. Senate Democratic Leader Chuck Schumer took a victory lap almost immediately.

"We now have multiple paths for the majority," Schumer said. "We found new states - Iowa, Texas - which people a year ago weren't even paying attention to."

However, Michigan and Maine, two races Democrats once treated as near-certain wins, have become real contests. That forces the party to win more of its new territory just to stay even. Every "reach" state Schumer adds to the list has to make up for a seat that was supposed to be in the bag.

If Democrats win a majority in the Senate, they'll be able to block presidential nominees, including judges. A Democratic majority would turn every confirmation vote into a two-year war of attrition. However, some of the races Democrats are banking on going their way have a history of being wrong.

"But here's the question, what if the polls are wrong?" CNN anchor John Berman asked the network's chief data analyst Harry Enten.

"We've had really good Democratic polls coming out from Ohio, Michigan, Iowa," Enten told CNN. "And, you know, fool me once, shame on you. Fool me four times, I just have to ask the question, could it happen again?"

His data suggests it might. "In Iowa, where the Democrats have been getting really good polls, Republicans outperformed their September polls by nine points back in 2024. How about Ohio? Six points. How about Michigan? Five points."

He continued, "And I will note that the leads that the Democrats have in all of these races right now are under how much the GOP outperformed back in 2024."

Enten went back to 2018, Trump's first midterm, when Trump wasn't on the ballot, and the trend was the same.

"You can go back to Donald Trump's first midterm election. And it's the same exact story. Look at this, the GOP outperformed September polls in the major 2018 statewide races by six points in Iowa, six points in Ohio and eight points in Michigan."

The miss wasn't just a Trump-on-the-ballot effect. It showed up in every cycle Enten checked except 2022. "The bottom line is this," Enten said. "Over the last few cycles, whether it be 2018, 2016, 2020, 2024, Republicans have outperformed their September polls by at least five points in all these three states where Democrats right now are ahead, but not by a wide enough margin whereby if Republicans outperform their September polls again, it could become very, very interesting."

So, if the trend continues, the Senate map looks really good for Republicans.

"Let's just say that the GOP outperforms their Midwest polls, like they did in 2018 and 2024," Enten said. "Well, what do you get? You get a red Michigan. You get a red Ohio. You get a red Iowa. And all of a sudden, even if Democrats carry states like Texas, Georgia, and North Carolina and Alaska, well, guess what you get? You get a 50/50 Senate with J.D. Vance casting the tie-breaking vote."

The party could pull off a historic upset in Texas, hold Georgia, and flip North Carolina and Alaska, and still end up in the minority because three Midwestern states have behaved the same way in four of the last five cycles.

The prediction markets are less sure than the polls, according to Enten. "Well, the Kalshi prediction market says that Abdul El-Sayed is still a favorite in Michigan, but not an overwhelming one, 73 percent. Sherrod Brown in Ohio, 61 percent. That's basically a toss-up territory. And Josh Turek in Iowa, where he got a really good poll earlier this week, a 42 percent chance."

"In these midwestern Senate races, yes, Democrats have gotten good polls," Enten said. "But I would just say, hold on just a brief second here because history says, you know what, it might not end for them as well as the polls currently suggest it will."

Tyler Durden Fri, 10/02/2026 - 12:20

DOJ Alleges UCLA Law School Discriminated By Race In Admissions

Authored by Aaron Gifford via The Epoch Times,

The University of California - Los Angeles (UCLA) School of Law allegedly denied admission to whites and Asians in favor of lower-performing black and Hispanic applicants, the Department of Justice announced Thursday.

Under federal Civil Rights Laws and a 2023 U.S. Supreme Court decision that ruled against affirmative action practices in university admissions, the public institution could lose federal funding if it doesn't take corrective actions, Assistant Attorney General Harmeet K. Dhillon said in an Oct. 1 news release.

"Like many of its peer institutions, UCLA Law School runs a two-tiered admissions system whose academic bar for acceptance shifts up or down depending on the color of your skin," she said. "The use of race as a thumb on the scale that helps or disadvantages any student is illegal. The Department will continue to enforce equal treatment under the law everywhere - including in our nation's law schools."

The Department of Justice (DOJ) reviewed student application materials for the incoming classes of 2023, 2024, and 2025, which included personal statements and essay prompts that allegedly are designed to "elicit information about race."

Additionally, UCLA Law admissions staff allegedly instructed prospective students how to reveal their race in those sections of the application. This happened during race-based recruitment events, such as the Diversity Admissions Open House, Dhillon said.

Investigators also said they found that the university rejected white and Asian applicants who had the same LSAT scores as admitted black and Hispanic candidates. For 2024 and 2025 combined, half of the admitted black applicants had LSAT scores that were at or below 90 percent of the admitted white applicants, according to the news release.

The DOJ also reviewed internal university documents that Dhillon said showed intent to discriminate. This includes a statement allegedly from an assistant dean: "We are proud of the fact that 58 percent of this year's incoming class are students of color."

Another document from an assistant dean of admissions allegedly said, "If information about your ethnic/racial background would be helpful for law schools to gain a better sense of who you are, include it."

Dhillon said in a letter to UCLA officials disclosing the findings of her investigation that the University of California higher education system doubled down on its commitment to affirmative action practices after the 2023 Supreme Court decision, issuing a memo from the president's office that read, "student diversity remains a top priority for the University of California."

The DOJ examined seven years of UCLA Law applicant data, from 2019 to 2025, and found that the university did not "meaningfully change its admissions practices" in response to the Supreme Court decisions.

The federal agency recently announced similar investigative findings at UCLA Medical School, UC David Medical School, UC San Diego Medical School, George Washington University Medical School, Yale University Medical School, Duke University Law School, and UC Berkeley Law School.

Dhillon said her agency will engage in settlement negotiations with UCLA to bring the university's admissions practices into compliance. If those efforts fail, the DOJ will file a lawsuit.

UCLA Law School issued a statement on Oct. 1, maintaining that its admissions practices are not unlawful or discriminatory.

"UCLA School of Law is committed to making admissions decisions in compliance with all applicable laws, including the California Constitution and Proposition 209, federal statutes, and the U.S. Constitution," the statement said. "Students are admitted through a comprehensive, merit-based review process that considers each applicant's achievements and experiences. We are confident in our process."

Tyler Durden Fri, 10/02/2026 - 12:00

Judge Denies Lawyer's Motion To Find Lindsay Clancy Not Guilty In Murder Of 3 Children

Authored by Jill McLaughlin via The Epoch Times,

The judge in the Lindsay Clancy murder case denied a motion by her lawyer asking to find his client not guilty in the deaths of her three children on Oct. 1.

Judge William Sullivan found county prosecutors had presented enough evidence for any reasonable jury to potentially conclude beyond a reasonable doubt Clancy was responsible for the murders.

"There was evidence introduced, both physical and circumstantial, that would permit a rational trier of fact to find beyond a reasonable doubt the elements of the charge of murder," Sullivan wrote in his ruling.

Attorney Kevin Reddington told the judge in a hearing earlier this week that prosecutors had not provided proof that Clancy killed her young children, despite having previously argued that Clancy was not guilty by reason of insanity. The first trial ended in a deadlocked jury on Sept. 4.

Reddington told the court his client seemed to have false memories of that night and any admissions she made were "uncorroborated." He asked the judge to issue a finding of not guilty and throw the charges out because the state did not prove its case.

Reddington declined to make a statement on the court's motion Thursday, his special adviser Daniel Nardo said in a post on X.

Clancy allegedly admitted guilt several times in January 2023.

Plymouth County District Attorney Timothy Cruz told reporters he has not yet decided whether to pursue a second trial following the mistrial. Cruz's office didn't immediately return a request for comment about the decision.

During the first trial, prosecutors argued that, despite struggling with mental health problems, Clancy knew what she was doing when she strangled her children - ages 5, 3, and 8 months - and then tried to kill herself.

In his ruling Thursday, Sullivan said it was up to the jury, not the judge, to decide whether to believe expert witnesses for the defense who testified that Clancy suffered from postpartum psychosis and was not responsible for her actions.

The judge declared a mistrial after the jury split 11-1 in favor of acquitting Clancy by reason of insanity.

Clancy's case is ongoing and she remains charged with murder. She remains at a psychiatric hospital awaiting the resolution of her case.

If convicted, she faces life in prison. She could also be acquitted and ordered to be confined to a mental health facility for treatment.

The next hearing in Clancy's case is on Nov. 2, when the two sides will meet with the judge for a post-trial mistrial motion hearing to discuss whether prosecutors want to dismiss or retry the case.

Tyler Durden Fri, 10/02/2026 - 11:25

Trump Says "It's Possible" Iran War Could Cost Him November Midterms

Trump in Thursday remarks to the press said he was "ensuring that Iran will be very quickly ended," while claiming the Iranian theocratic government is "ready to fold up".

As far as a timeline, he stressed once again his view that the US will 'win' but it will be "right after the election." Around 9,000 more troops are headed toward the Middle East from San Diego, as the USS Roosevelt strike group newly deploys.

On the election front, Trump conceded something that his Republican party is not going to want to hear:

President Trump on Thursday said “it’s possible” that the Iran war could cost him the November midterm elections by risking Republican control of the House, Senate or both.

“Well, it’s possible. It should help,” Trump told reporters outside the White House before heading to a campaign rally in the Choctaw Nation in Oklahoma. “Because Iran will not have a nuclear weapon. So when you say, ‘Is it OK for Iran to have a nuclear weapon?’ I would say 100 percent of the people say no, including worldwide. So, when you say it that way, it would help. If you don’t say that, it could hurt.”

via AP

Republicans in Congress know this risk or likelihood too, and yet oddly they have overwhelmingly voted down every War Powers resolution.

Trump had earlier this month told GOP voters to act is if it is he that is on the ballot.

"I’m asking you to pretend that I’m on the ballot," he told the Republican National Committee’s midterm convention in Dallas. "Just one more time, because if we lose, you’re going to lose your border, you’re going to lose your tax cuts. You’re going to lose your safety and security. You’re going to lose your wealth."

He has since reiterated it while addressing large crowds of Republican voters...

Trump: We do great when I'm on the ballot. Pretend I'm running please. If we don't win, they'll end up impeaching me pic.twitter.com/HZK4olngJv

— Headquarters (@HQNewsNow) October 2, 2026

In the meantime the White House keeps doubling and tripling down when it comes to the Iran conflict and Hormuz Strait standoff.

For example, despite warnings of dwindling defensive missile stockpiles, Washington has rushed more Patriots to the Gulf, as the region braces for more possible fighting between the US and Iran.

On Thursday Axios reported based on unnamed US officials that two additional Patriot missile batteries to Saudi Arabia and Qatar to help protect oil and gas facilities.

Getty Images

In the case of Saudi Arabia, it is now being hit also by the Houthis of Yemen, having suffered multiple drone attacks on refineries and the crucial East-West pipeline.

But sending more Patriots at a moment of a global shortage strongly suggests the White House plans to resume hostilities, after talks have essentially collapsed and there does not appear to be a deal shaping up anytime soon.

Axios underscored that the "U.S. wanted to reassure both allies that it would protect their key energy facilities in case President Trump decides to resume major combat operations against Iran."

The best part is we’ll be able to find awful takes like this years from now

— Phil Kennedy (@PhillipAKennedy) February 28, 2026 More Iran War Latest

via Newsquawk...

• US President Trump reiterated that Iran will never have a nuclear weapon and has no navy or army, while he stated that Iran has not been able to get one of its vessels through the Strait of Hormuz for months. Trump also said huge quantities of oil have passed through the Strait of Hormuz and the US is taking out millions of barrels of oil, claiming that in some cases, it is more than before the war.
• US President Trump said the Iran war will be ending soon, one way or the other, and that it looks like Iran was involved in the UK base incident. Trump warned that Iran will be hit very hard if it is behind the copilot who tried to crash a flight to Israel, while he separately commented that based on what he heard, Iran was connected to the attempted attack on the plane.
• The Iranian National Security Commission said that Iranian management of the Strait of Hormuz will be applied. Ships to Zionist or hostile regimes will not be able to pass through the Strait, others will have to get permission. Bill is queued for parliament.
• IRGC said three UAE-linked tankers attacked recently in the Strait of Hormuz were on the PGWA's non-compliance list, and had transited the Strait repeatedly over the past two months.
• Saudi‑led coalition intercepted and destroyed ballistic missiles launched by Yemeni Houthis towards Khamis Mushait.

Tyler Durden Fri, 10/02/2026 - 11:05

France Should Grok How To Solve Its Fiscal Crisis, Please Make No Mistakes

By Benjamin Picton, Senior Market Strategist At Rabobank

European equity indices fell sharply yesterday, pacing gains in sovereign yields for France, Italy and Greece. The spread between 10-year OATs and Bunds blew out to more than 140bps as the French government unveiled plans for €43bn worth of spending cuts and higher taxes in an effort to tackle France’s yawning fiscal deficit. The plan contains cuts to France’s social security system, including partial freezes to pensions indexation, trimming of retiree tax benefits, and a slower projected pace of healthcare spending growth.

Nevertheless, the market reaction suggests that investors are not optimistic about the prospects for reform. Firstly, the projected result is not exactly stellar. If all the measures are enacted the fiscal deficit would only fall from 5.4% to 5%. Secondly, social security retrenchment has proven an intractable challenge that has outlasted several governments and the prospects for successfully steering reform through a fractured national parliament a few months out from a contentious Presidential election where the leading candidates on the populist left and right generally oppose pension reform are not strong.

The sense that the French administrative state lacks the capacity to reform itself is reflected in the fact that the sovereign spread to bunds is now substantially worse than is the case for Italy and Greece. Those two were among the ‘PIIGS’ during the European sovereign debt crisis of the early 2010s and were previous viewed as the worst offenders in terms of fiscal responsibility. No longer.

The French government now says that debt interest costs are expected to rise 15% next year to €91bn, which is almost double what the republic plans to spend on core defense this year (i.e. excluding pensions) even as pressures to commit more funding to military are only increasing. Obviously, rising borrowing costs come at an unhelpful time as European leaders issue ever more urgent warnings about Russian hybrid warfare, and as Russia threatened to use nuclear weapons if NATO were to blockade the Kaliningrad. In such an environment European re-armament and sovereign supply chain capacity is surely a necessity rather than a nice to have.

Regarding the latter, Europe is off to a slow start. Politico carried a story yesterday regarding the EU’s rollout of ‘Element Pro’, which it describes as an internal sovereign backup to Microsoft Teams that could be used in the event of a “disruption”. Anonymous EU officials quoted in the story were less than impressed, describing the system in unflattering terms and suggesting that in any tech conflict with the United States the U.S. would “instantly win the war”.

Sovereign capacity over critical supply chains is a theme that we have been banging on about for many years now. The importance of that capacity is now highlighted almost daily. A case in point is reports yesterday that the Trump administration had told European counterparts to release diesel stockpiles or face the risk of a US export ban. Brent crude oil prices were down by almost 1.2% to $102.31/bbl yesterday as markets continued to price in the effects of rising flows out of the Strait of Hormuz, but diesel prices remain one of several political sore points for the Trump administration ahead of the upcoming midterm elections.

The US now has enormous influence over flows of crude and refined products from the Americas and the Middle East. With little oil of its own, and an outsized appetite for diesel, Europe again finds itself bargaining from a position of relative weakness. Several market analysts have noted that a US diesel export ban could prove to be self-defeating, prompting refineries to cut production runs that would raise prices for even more politically sensitive gasoline, while logistics issues conspire to prevent meaningful falls in retail diesel prices.

Mindful of this, European leaders might choose to call the US’s bluff, but differing views regarding the rationality of the US President could create dissent on that score that again exposes the political frailties inherent in the EU’s status as a collection of nations with varying interests, rising nationalistic fervour, and relatively powerful national governments. By contrast, and despite their own challenges with political polarisation, the US, China and Russia are internally coherent nations with much stronger central government.

Reclaiming lost sovereignty was supposed to be one of the rationales for Britain’s 2016 decision to leave the EU, but new PM Burnham has now made it clear that a fresh in-out referendum on EU membership could be a feature of Labour’s next election manifesto. Meanwhile, former PM Truss – who was famously outlasted by a wilting lettuce – noted with some schadenfreude yesterday that 30y gilt yields had breached 6% for the first time since the late 1990s and asked in a not-so-subtle dig whether the Bank of England would “Bailey” the government out again.

Gilt yields hit 6%.

Will the Bank of England Bailey the Government out again? pic.twitter.com/GJ1Lu2WKPx

— Liz Truss (@trussliz) October 1, 2026

Truss has publicly implied that she was effectively deposed in a liberal deep state coup after her government unveiled a mini budget replete with tax and spending cuts that precipitated a disorderly move higher in sovereign yields and her swift replacement with the more politically orthodox figure of Rishi Sunak. The Bank of England holds responsibility for ensuring the stability of the financial system, but in an era of fiscal dominance the lines of demarcation between independent monetary authorities and elected officials are increasingly in dispute. As Treasury yields and US mortgage rates soared to new highs this week Donald Trump’s efforts to exert more control over the Fed again came to the fore via renewed legal threats to Jerome Powell.

Speaking of renewed threats, the US just deployed a third carrier strike group to the Middle East and has reportedly sent new missile defence systems to gulf allies to assist in protecting vital energy infrastructure. That’s as Trump recently threatened that the US may resume bombing of Iran after the midterm elections (which has been our geopolitical base-case), or if it is found that the Omani co-pilot who attempted to hijack a FlyDubai flight to Tel Aviv had links to Iran.

Just as at the start of the war, three carrier groups in the region would be an unusually large concentration of firepower if the US didn’t intend to use it. With that context, it may be the case that President Trump has already decided to resume bombing, or it may not. There are reports circulating today that claim President Trump spent “hours” seeking the counsel of the GrokAI chatbot regarding the likely response of Venezuelans to a US capture of Nicolas Maduro. The chatbot reportedly advised Trump that the Americans would be welcomed as liberators.

Perhaps France could ask Grok how to solve its fiscal woes? Please make no mistakes.

Tyler Durden Fri, 10/02/2026 - 10:45

RTX's Raytheon Awarded $24.4B Missile Contract as Trump Finally Admits Stockpiles "A Little Bit Lower"

The Pentagon on Thursday announced a massive new defense contract at a moment many Congressional members are concerned over America's dwindling arsenal of both defensive and offensive missiles and weapons systems.

Raytheon, an RTX unit, has been awarded a $24.4 billion contract for the accelerated production of SM-6 missiles, amid the scramble to replace them in the wake of Trump's Operation Epic Fury bombing campaign of Iran.

A Pentagon statement described the missiles as "critical anti-air and anti-surface warfare munition" and previewed that "this five-year agreement, with two additional option years, will drive faster production."

SM-6 military file image

The announcement further described that the deal "provides the defense industry with the long-term predictability needed to expand workforce capacity and secure critical supply chains."

Additionally, "The Navy said the multiyear contract is meant to provide a steady and reliable supply of the Standard Missile-6 interceptors, which can carry out both offensive strikes and missile defense missions."

President Trump has stretching back over weeks and months consistently denied that the Pentagon is suffering a weapons shortage due to the Iran war. Instead, he has blamed any shortfall or stockpile concerns on his predecessor Biden and his Ukraine war policies.

But certainly the Pentagon is acting like there's a problem, given it is quickly handing out these large contracts in order to establish "faster production" and greater "long-term predictability". This after a mid-July report from the Pentagon's inspector general did point to a serious and growing problem.

Trump had slammed the report as "mostly fake news" at the time; however, just this week he finally did acknowledge that some munitions "are a little bit lower" in the wake of the seven-month long Iran conflict. Trump's new remark this week is as follows:

"Some forms of ammunition are a little bit lower than other forms," the president said in an interview with TIME magazine published Thursday, adding: "We're stocking up at levels we've never done before."

Some critics among MAGA have underscored that the munitions crisis reveals an abandonment of 'America First' policy, also given the immense amounts of interceptors expected on Israel and Gulf allies of late.

Ultimately the only winners in all of this are Israel and the major defense contractors, who will continue to see huge returns with the help of the US taxpayer.

Tyler Durden Fri, 10/02/2026 - 10:30

40 Percent Error Rate Found In Afghan Refugee Vetting Samples, Inspector General Finds

Authored by Naveen Athrappully via The Epoch Times,

A Department of Homeland Security (DHS) Office of Inspector General review has found errors in 40 percent of sampled asylum files for Afghan nationals who entered the United States under a Biden-era refugee program.

Afghan families walk to a bus that will take them to a refugee processing center at Dulles International Airport in Dulles, Va., on Aug. 24, 2021. Joshua Roberts/Getty Images

The report analyzed data from Operation Allies Welcome, which was initiated in the aftermath of the U.S. withdrawal from Afghanistan in 2021 and aimed to resettle roughly 97,000 Afghan nationals in the United States.

The DHS Office of Inspector General (OIG) analyzed a sample of 678 applications from 13,682 adjudicated applications filed by Afghan nationals resettled in the United States under the program.

The analysis identified a 40 percent error rate in adjudicating asylum files, including 303 missed aliases, 45 unresolved records, 23 missing security checks, and 115 other documentation issues, the OIG said in a Sept. 23 report.

"Most errors resulted from missed aliases or incomplete documentation, including two cases related to potential inadmissibility on terrorism-related grounds," the report states.

One of the terrorism-related errors involved an asylum officer failing to include an applicant's Terrorism-Related Inadmissibility Grounds worksheet in the case file. The second error involved officials failing to indicate whether they approved or disapproved an asylum officer's analysis of an applicant subject to Terrorism-Related Inadmissibility Grounds.

In a Sept. 29 statement, DHS said that Operation Allies Welcome led to many criminal immigrants being released into the United States, including those accused of sexual battery, kidnapping, drug possession, hit-and-runs, and lewd or lascivious acts with a minor.

For instance, in November 2025, DHS assisted the FBI in arresting an Afghan national who was charged with threatening to kill Americans. He was in the United States as part of Operation Allies Welcome.

In December 2025, a member of the ISIS terrorist group's Afghanistan affiliate who entered the United States under the operation was arrested. And in March this year, an Afghan national allowed into the country under the program who previously was convicted of indecent exposure to a minor was arrested.

In a June 2022 statement, U.S. Citizenship and Immigration Services (USCIS), under the Biden administration, had announced that Afghans who have supported and worked with the United States in Afghanistan and have undergone rigorous vetting could qualify for protection and other immigration benefits.

Then-DHS Secretary Alejandro N. Mayorkas said in the statement that this would "allow eligible individuals who pose no national security or public safety risk to receive asylum, refugee status, or other legal immigration status, demonstrating the United States' continued commitment to our Afghan allies and their family members."

Mullin: 'Dangerously Mismanaged'

DHS Secretary Markwayne Mullin said in the recent statement: "Our asylum system should be as strict as possible. If even one dangerous criminal or terrorist slips through and enters our country, it endangers countless American lives."

The Operation Allies Welcome program was "dangerously mismanaged" and disregarded "the thorough and well-established procedures of [the U.S.] asylum system," Mullin said.

OIG said in its report that it initiated the evaluation after receiving complaints that an agreement made by DHS would result in asylum adjudication issues. DHS made the settlement with certain plaintiffs in September 2023, agreeing to adjudicate 90 percent of asylum applications from the Operation Allies Welcome population within 150 days.

This went against standard procedures, in which applications from non-Operation Allies Welcome groups can take up to 180 days.

According to the OIG, USCIS employees complained that the shortened time frame could negatively affect proper review of applications. OIG included a response by USCIS to a redacted draft copy of the latest report.

USCIS Director Joseph B. Edlow said in a letter to DHS OIG that the draft report failed to consider that instances of missing aliases or improper security checks were taking place amid "broader, established, and robust screening, vetting, and security checks safeguards already in place that minimize the impact of these errors."

Edlow said that the agency's security check requirements include biometric and biographical checks of individuals against multiple law enforcement and watchlist databases. The agency also continues to enhance vetting requirements for people who have applied for asylum, according to the letter.

A December 2025 report by the Center for Immigration Studies said that more than 200,000 Afghan nationals had entered the United States under the previous administration's policies after the U.S. withdrawal from Afghanistan.

"Contrary to popular narratives, most Afghans admitted during and after the evacuation had nothing to do with the U.S. government or any of its contractors," senior researcher Nayla Rush said in the report. "They were not U.S. 'allies,' nor were they 'persecuted' individuals in need of refugee resettlement."

Tyler Durden Fri, 10/02/2026 - 10:20

Oil Dips As Europe Folds - G7 Agrees To 100-Million-Barrel Emergency Release

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.

*  *  *

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 - 10:05

Jobs Huge Miss: Sept Payrolls Plunge To 29K, Below All Estimates As July Revised Negative... But Employment Soars

In 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:

• The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged  at 1.9 million in September. The long-term unemployed accounted for 27.1 percent of all unemployed  people. 
• Both the labor force participation rate, at 61.8 percent, and the employment-population ratio, at  59.2 percent, changed little in September. These measures showed little net change since January.  
• The number of people employed part time for economic reasons changed little at 4.5 million in  September. These individuals would have preferred full-time employment but were working part time  because their hours had been reduced or they were unable to find full-time jobs. 
• In September, the number of people not in the labor force who currently want a job changed little  at 5.8 million. These individuals were not counted as unemployed because they were not actively  looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force decreased by 236,000 to 1.5 million in September. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, changed little over the  month at 414,000. 

Next, looking at the actual industries in today's report, we find the following: 

• Health care employment continued its upward trend in September (+17,000), but at a slower pace than the average monthly gain over the prior 12 months (+33,000). In September, employment continued to trend up in ambulatory health care services (+13,000) and in hospitals (+12,000), while nursing and  residential care facilities lost jobs (-9,000).
• Employment in construction changed little in September (+11,000). The industry had added an average of 10,000 jobs per month over the prior 12 months. In September, employment in nonresidential  specialty trade contractors continued to trend up (+12,000).
• Manufacturing employment was little changed in September (+9,000) but is up by 72,000 since a recent low in December 2025. Over the month, employment increased in plastics and rubber products manufacturing (+5,000) and in machinery manufacturing (+5,000).
• In September, financial activities employment was little changed (-7,000). Employment in financial activities is down by 129,000 since a recent peak in May 2025, with most of the job loss in insurance carriers and related activities (-90,000).
• Employment also showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; professional and business services; social assistance; leisure and  hospitality; other services; and government.

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 - 09:55

"Can We All Just Admit This Is Just Absurd?!"

Thousands 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!?"

Let’s pretend that data is valid and go through the motions under the assumption that this is anything other than a wild guess, using methods and technologies that should have been updated years ago, if not decades ago.

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 Line

We 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

Tesla Delivers 486,432 Vehicles In Q3, Handily Beating Wall Street Forecasts

Tesla handily beat expectations on deliveries for Q3 this morning, handing the electric vehicle maker a sizable beat against Wall Street forecasts.

The company delivered 486,532 vehicles during the quarter, well above the roughly 461,000 units analysts surveyed by FactSet had been expecting. Tesla’s own compilation of sell-side estimates had put the consensus at 461,974 vehicles, meaning actual deliveries came in roughly 24,500 vehicles, or about 5.3%, above that figure.

Of the 486,532 vehicles delivered, Model 3/Y accounted for 478,237 vehicles.

The better than anticipated result helped Tesla shares rise about 2% Friday morning.

Tesla’s quarterly delivery report remains one of the clearest measures of the health of its core business, even as Elon Musk has increasingly argued that the company’s long-term value will be determined by businesses that have little to do with selling conventional electric vehicles.

Musk has spent much of the past year directing investor attention toward autonomous driving, artificial intelligence and Tesla's Optimus humanoid robot. He has repeatedly described Tesla as an AI and robotics company rather than simply an automaker, while arguing that autonomous vehicles and Optimus could eventually become much larger businesses than vehicle sales.

Musk has also continued to emphasize Tesla’s planned Cybercab network and the expansion of its autonomous driving technology as central pieces of the company’s future.

For the time being, however, automobiles remain Tesla’s primary source of revenue and cash flow. That makes quarterly deliveries an important indicator of consumer demand, pricing conditions and utilization at the company’s factories in the United States, China and Germany. 

The result also arrives as Musk continues to divide his attention among several companies. His other major venture, SpaceX, recently recorded an important success with Starship's first orbital flight, moving the company closer to commercialization. 

Tyler Durden Fri, 10/02/2026 - 09:35

Trump Admits Diesel US Export Ban Could Raise Gasoline Prices

Authored by Tsvetana Paraskova via OilPrice.com,

A potential ban on U.S. diesel exports could have "a negative impact on gasoline," U.S. President Donald Trump said late on Wednesday, although he didn't rule out such a move from the Administration.

The President told reporters in the Oval Office that he and the Administration continue to discuss the pros and cons of a diesel export ban every day, "but it just seems that it would have a negative impact on gasoline."

Earlier this week, Goldman Sachs analysts also warned that a U.S. diesel export ban would push domestic gasoline prices higher as refiners could be forced to reduce processing rates.

President Trump on Wednesday appeared to be less inclined to ban diesel exports than a few days ago, but he has not yet ruled out the idea that emerged last month as retail diesel prices in the United States hit $6 per gallon nationwide average for the first time ever, and then $6.50 a gallon.

As a result of the jump in crude oil prices and a worsening global crunch for fuels, U.S. gasoline prices are also at a record high level for this time of year, even as demand is easing after the end of the peak driving season. At an average nationwide price of $4.43 per gallon, the price of regular gasoline is higher than the $4.08 from a month ago and way higher than $3.15 per gallon on this day in 2025.

Diesel prices have hit record highs in many economies amid refinery constraints in the Middle East and Russia, which refineries elsewhere cannot offset even if they run at maximum utilization rates, as is the case in the United States.

Refinery capacity is constrained in the Middle East due to Iranian strikes on refineries and the trickle of fuel flows through the Strait of Hormuz. Then there is also severely restricted capacity in Russia due to Ukrainian drone strikes at Russian refineries. Russia has just extended its ban on diesel exports through October 31.

Tyler Durden Fri, 10/02/2026 - 09:10

'Massive Short Squeeze': Yields, Rate-Hike Odds Plummet After Piss-Poor Payrolls Print

With nonfarm payrolls printing below even the weakest analyst's forecast, the market's reaction has been uniformly dovish with rate-hike odds plummeting, treasury yields tumbling, stocks soaring, dollar down and gold and crypto higher.

The biggest impact of the piss-poor payrolls print was the market basically pricing out a hike in October...

With less than one total hike (22.5bps) now priced in for 2026 (and only 2 more hikes in 2027)...

Yields are all down, led by the short-end...

Which makes sense given that heading into the print (as we previewed perfectly), Goldman's Brian Garrett says the bank's CTA model shows managers "extremely short global bonds (~$390bn notional)."

US 10Ys are at 99% of max short and 30Ys at 100%.

With systematic funds that short, a weak print, or even a 4.2% unemployment rate, could set off a massive short squeeze in bonds. 

Stocks spiked on the report, led by the most rate-sensitive names (Small Caps) and longest duration tech names...

And gold is rising (as the dollar dips)...

Tom Simons, chief US economist at Jefferies, said this payroll number “should be the nail in the coffin” for an October hike.

“We had been expecting that they would continue with successive 25 bp moves, but it now looks more likely that the policymakers emphasizing that they have some more time before another hike is needed will remain patient.”

With these revisions, employment in July and August combined is 60,000 lower than previously.

Makes you wonder if Warsh would have hiked at all if he had accurate data.

Finally, Christopher Hodge at Natixis doesn’t think these numbers move the Fed debate by a lot:

"This data won’t shift the broader decision making calculus for the Fed as inflation remains the supreme concern, but with wages lower and the jobs picture a bit less rosy, it certainly decreases the urgency to hike in October."

But with Jefferson and WIlliams already in the dovish/hold/wait-and-see camp, and the proximity to the Midterms, it seems October's hike is well and trul off the table (after topping 75% odds just a week or so ago).

Tyler Durden Fri, 10/02/2026 - 08:53

Futures Rise, Yields and Oil Drop Ahead Of Key Jobs Report

US futures climbed and bond yields reversed an earlier rise, as a drop in oil prices provides a tailwind in calm trading following a week in which markets were lashed by sharp swings in yields, with the US payrolls report still to come. As of 8:15am ET, S&P 500 futures were up 0.4% after Thursday’s close left the index headed for its worst week since August; Nasdaq 100 contracts have added 0.8%. In premarket trading, chipmakers rallied while all Mag 7 are higher, with NVDA (+1.7%) the outperformer. The stabilization in yields overnight, in addition to the Treasury rally yesterday, was supportive of risk assets. Overnight, there weren’t many new macro headlines, with investors waiting for NFP today. See Feroli’s preview below. Yet under the hood, tighter financial conditions are crushing equity breadth, which is now at levels last seen during the dot com bubble.  Bond yields are 1-2bp lower across the curve amid a -3.8% decline in oil. Treasuries gained across maturities with 10-year yields down 1 bp to 5.23% ahead of payrolls. While US rates were calm, Europe's debt crisis is getting worse as the premium on France’s 10-year yield over Germany’s hit its highest level since 2011 as unease over policy gridlock in Paris grew.  Gilts and bunds are rising in lockstep, with UK and German 10-year yields falling 6 basis points each. French bonds are lag peers, widening spreads further. Base metals fell 1-2%; precious metals were unchanged. The dollar snapped a four-day run of gains as it headed for a third weekly advance, which would be its longest under the current Presidential term. Bitcoin climbed. Today's US economic data slate also includes August factory orders 10 a.m. Fed speaker slate includes Dallas’s Logan (10 a.m.) and Chicago’s Goolsbee (12 p.m.)

In premarket trading all Mag 7 stocks are higher (Nvidia +1.7%, Alphabet +0.4%, Tesla +0.7%, Amazon +0.5%, Microsoft +0.9%, Meta Platforms +0.4%, Apple +0.2%)

• Airbnb (ABNB) rises about 2% after KeyBanc Capital Markets upgraded the online travel company to overweight, seeing positive growth trends.
• Edison International (EIX) falls 2% after Jefferies cut its recommendation on the utilities company to underperform on California wildfire liability risk.
• Fair Isaac (FICO) falls 8% as the FHFA is planning to direct Fannie Mae and Freddie Mac within weeks to require lenders to pull credit data from two major credit reporting bureaus instead of three, according to a person familiar with the plans. TransUnion (TRU) falls 3% and Equifax (EFX) slumps 3%.
• Nike (NKE) slumps 9% after the sneaker and sportswear maker’s revenue guidance for the full year fell short of consensus estimates.
• Twilio (TWLO) rises 1% after S&P Dow Jones Indices noted that the stock will replace Warner Bros Discovery in the S&P 500 effective Oct. 6.
• ON Semi (ON) climbs 8% after the chipmaker said it will buy Synaptics for $123 per share, revising their earlier all-stock deal to an all-cash transaction. Synaptics (SYNA) rises 15%.
• Vylor (VYLR) climbs 3% after the Corteva Inc. seed spinoff was initiated with buy ratings on its growth profile.
• Western Digital (WDC) falls 8% and Seagate Technology (STX) drops 12% after Nikkei reported that Toshiba would invest ¥60 billion to double its production capacity for hard disk drives.

In other corporate news RTX received a deal worth as much as $24.4 billion to accelerate production of a key anti-air and anti-surface missile for the US Navy;  Amazon is exploring a deal to shift about $8 billion worth of top-end Nvidia chips off its balance sheet into a special-purpose vehicle, according to the FT. Netflix reported a collaboration agreement with independent Spanish streamer Filmin.
Twilio will replace Warner Bros Discovery in the S&P 500, Vylor replaces Corteva in the S&P 500 and Moderna replaces Warner Bros Discovery in the Nasdaq 100. Nike is cutting jobs and embarking on a sweeping overhaul of its business as results deteriorate, a restructuring plan that it said will save $2.5 billion over the next five years. The FHFA is said to be planning to direct Fannie Mae and Freddie Mac within weeks to require lenders to pull credit data from two major credit reporting bureaus instead of three.

Sentiment was lifted after Brent fell below $100 a barrel as European countries were said to discuss the release of strategic reserves. The retreat took some pressure off the inflation outlook, helping traders pare expectations for US rate hikes to only one move this year. The odds of more than three over the next 12 months also receded.

Yet divisions are emerging at the Fed, with Lorie Logan wanting more hikes to cool inflation, while members of the central bank’s troika have been calling for patience to see how data unfolds over the coming weeks.

On that front, payrolls are first on the slate for today. The September jobs report is expected to show nonfarm payrolls increased 90k vs August’s 162k increase and unemployment rate steady at 4.1%; Bloomberg crowd-sourced whisper number for payrolls is currently 86 while Bloomberg Economics expects 55k, which would point to a labor market stuck in low-hiring mode with the drivers of job growth shifting. This mix — along with early tracking of cooler September core CPI — would do little to strengthen the case for another rate hike, according to Bloomberg (our full preview is here).  The US jobs report will be key at a time when resilient data are supporting riskier assets while giving the Fed room to fight inflation. 

“If we get a very high number or materially higher than 90,000, you could expect more pressure on yields from here,” said Sotirios Nakos, head of multi-asset portfolio management at Aviva Investors.  For Mabrouk Chetouane at Natixis IM, strong data will bode well for third-quarter earnings and see traders price “growth and Fed hikes accordingly.”

Andrea Tueni at Saxo Bank warned that a blowout report could put stocks at risk. “US equity markets have so far managed to cope with really elevated bond yields, but I’m not sure how high these can go from here before something breaks,” he said.

The S&P 500 Equal Weight Index is on track for its seventh-consecutive weekly loss, which would be its longest streak since May 2022. BofA’s Hartnett describes a market “trading long artificial intelligence” (Nasdaq 100), “short artificial irrelevance” (S&P 500 Equal Weight). US equities saw $2.7 billion exit in the last week of the quarter, according to BofA citing EPFR Global data, while global bond funds drew $18.8 billion. Flows provide evidence of investors shifting to the safest paper, with Treasuries enjoying the 14th consecutive week of inflows.

High oil prices, AI giants’ surging demand for capital and a crowded short base in Treasury futures have fueled a spike in bond volatility that has rippled across asset classes. Thursday brought an unusual divergence, with Treasuries rallying on haven demand while riskier debt came under intense selling pressure.

Meanwhile,high-grade debt has lost some of its haven appeal as spreads on global corporate bonds blew out this week to their widest in six months. Fresh evidence of building price pressures came from the euro area, where inflation quickened to a three-year high. At the same time, bond traders were nursing losses after Paramount’s debt issue, to fund the biggest Hollywood buyout ever, cratered in initial trading. Meanwhile, Broadcom’s Wall Street syndicate are starting to gather $60 billion of fresh AI chip financing to benefit Anthropic and other companies.

In politics, Trump predicted that Democrats would impeach him for a third time if they retake control of Congress, seeking to boost voter enthusiasm for Republican candidates, as his approval rating hits new lows. The US administration has diverted aid set for EMEA countries to conservative-leaning governments in Latin America, the Washington Post reported.

Separately, governments around the world are running out of room to shield consumers from higher energy prices, with fuel subsidies potentially costing more than $1 trillion this year, according to a United Nations study.

In Europe, the Stoxx 600 has climbed 0.7% after three days of losses, with technology stocks leading gains. Still, Europe is set for a weekly drop, the fourth in five weeks. as bond markets remained under pressure from inflation concerns. IG Group slumped after it issued an unscheduled third-quarter update. Here are the biggest movers Friday:

• Universal Music Group shares rise as much as 3.3% after an upgrade to overweight at Barclays. The music label company’s stock is inexpensive for the first time after a period of underperformance, according to the bank
• Hensoldt shares rise as much as 5.2% as the German defense firm is upgraded to buy from hold by Kepler Cheuvreux, which says earnings and order momentum are poised to accelerate
• BT shares rise as much as 4.4% on Friday after the Financial Times reported that the telecom firm has opened talks with UK government officials over the possibility of buying TalkTalk
• J D Wetherspoon shares rise as much as 8.9%, to the highest level since March 2022, as analysts are encouraged by robust current trading, boosted by favorable weather
• IG Group falls as much as 27%, the most since 2016, after an unscheduled third-quarter update in which it cut its 2026 revenue growth outlook to the mid-single digits from 10%-15%
• Sanofi falls as much as 4.6%, the most since July, as Citi flags skepticism surrounding the French drugmaker’s announcement yesterday of an expanded partnership with Regeneron
• Kering falls as much as 6.5% as JPMorgan flags a tougher luxury backdrop and slower Chinese recovery for the French luxury-goods company after discussions with Kering’s investor relations team
• European sportswear stocks are sliding this morning after US firm Nike fell in extended trading on Thursday, following weaker-than-expected quarterly sales and a disappointing outlook for full year revenue. Analysts at Vital Knowledge described the sales guidance as “pretty ugly”

For Europe, “the key issue from a monetary policy perspective is any adverse spillovers from higher energy prices,” noted Pia Fromlet and Marcus Widen at SEB. “The test for how strong this effect will be is still ahead of us. Up until October the narrative of little evidence of indirect effects remains.”

Asian stocks fell to head for their worst week since mid-July, pressured by rising yields and US troop deployment concerns in the Middle East. The MSCI Asia Pacific Index was down as much as 1% on Friday before paring some of the losses. The gauge is still on track to close the week down 1.1%, the most since the week ending July 17. The stock markets in Hong Kong and Japan slumped, while South Korea and Taiwan gained.    Hong Kong was the region’s worst-performer, down the most since March, as investors fretted over tech companies’ potentially higher borrowing costs. Alibaba, Tencent and Xiaomi were some of the lead decliners in the Hang Seng Index.  Asia’s bank stocks, including HSBC, were also trading lower, tracking moves in global peers amid concerns over higher yields and potential UK tax hikes targeting the sector.

In FX, the Bloomberg Dollar Spot Index is down 0.4%. The Japanese yen and Swiss franc are the best performing G-10 currencies, rising 0.3% each.

In rates, treasuries hold small gains in early US session led by intermediate- to long-end tenors, slightly flattening the curve. US 10-year yield is down about 2bp near 5.22% vs declines of 9bp and 7bp for German and UK counterparts; European government bonds rallied out the gate this morning and remain in the ascendancy as a drop in oil prices provides an additional tailwind.  French 10-year is about 3bp cheaper on the day.  Bunds and gilts outperform amid lower oil prices and haven bid as French bonds weaken. IG dollar issuance slate is blank so far and expected to remain quiet. Weekly volume stands at about $33 billion vs dealers’ $50 billion projection; they anticipate $100 billion of supply in October. US session features September jobs report at 8:30 a.m. New York time. 

In commodities, Brent crude futures have fallen 3% to around $99 a barrel while WTI crude oil futures, down nearly 4%, support European bonds as France proposed developed nations release strategic reserves to ease surging prices at the pump. Precious metals are heading higher while Bitcoin has added 2%.

Today's US economic data slate also includes August factory orders 10 a.m. Fed speaker slate includes Dallas’s Logan (10 a.m.) and Chicago’s Goolsbee (12 p.m.)

Market Snapshot

Top Overnight News

• Iran is preparing a broader and more forceful response if the United States resumes large-scale military attacks, sources said, while continuing a diplomatic push that Iranian officials privately see as unlikely to succeed. RTRS
• Vladimir Putin has instructed his military leaders to abandon the rules of war, prompting a steep increase in strikes on civilian targets amid a major push to regain the advantage in the conflict, according to intelligence intercepted by Kyiv. FT
• Governments around the world are running out of room to shield consumers from higher energy prices resulting from the Iran war and other crises, with fuel subsidies potentially costing more than $1 trillion this year, a United Nations study found. BBG
• World food prices rose in September, as transportation disruptions and weather concerns limited supplies and lifted prices for several crop-based commodities, the United Nations’ Food and Agriculture Organization said. WSJ
• Amazon’s exploring a deal to shift about $8 billion of high-end Nvidia chips into a sale-leaseback SPV vehicle backed by outside investors to help strengthen its balance sheet. FT
• European countries are in crisis talks over the release of diesel stocks, as the US threatens them with a diesel export ban unless they release strategic reserves of the oil product. FT
• Tokyo’s key inflation gauge rose sharply as the effects of some temporary government measures faded, backing the Bank of Japan’s stance on continuing to raise the benchmark rate after authorities accelerated the pace of policy normalization. BBG
• Eurozone CPI for Sept ran hot on the headline (+3.8% vs. the Street +3.7% and vs. +3.2% in Aug) and was inline on core (+2.5% vs. +2.4% in Aug). BBG
• Trump posted "Republicans in the Senate have to get moving on what I call the “No More Changing of Clocks Act,” officially known as The Sunshine Protection Act".
• Goldman estimates nonfarm payrolls rose by 80k in September, slightly below consensus of +88k. On the positive side, the level of layoffs remains low and big data indicators of job growth picked up sequentially. On the negative side, September payroll growth has tended to underperform its recent trend when Labor Day is later in the month—like it was this year—and last month’s sharp increase in nonfarm payrolls was boosted by outsized increases in leisure and hospitality and local educational services payrolls that we do not expect to repeat. GS Research
• BofA Flow Show (w/e 30th September): USD 18.8bln to bonds, 15.8bln to stocks, 0.9bln to crypto, 0.7bln to gold, 118.0bln from cash on quarter-end; Bull and Bear indicator 8.8 (prev. 9.3).

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the ultimately choppy performance stateside as oil prices climbed, yields pulled back, and participants digested a slew of data, while all eyes turn to the looming NFP report. ASX 200 mildly gained, with the index led by strength in tech and energy, albeit with further upside capped amid a lack of fresh catalysts and with real estate and healthcare at the other end of the spectrum. Nikkei 225 retreated as participants digested the latest data releases, including a surprise uptick in the Unemployment Rate and the hotter-than-expected Tokyo CPI data, which was said to be driven by an unwinding of price suppression effects from targeted government subsidies. KOSPI traded indecisively following the somewhat mixed South Korean CPI data, in which the Y/Y reading slowed to 2.9% from 3.1%, as expected, but remained above the central bank's 2% target. Hang Seng underperformed on return from the holiday closure, with Stock Connect trade remaining shut owing to the week-long closure in the mainland, while pressure was seen in auto names following monthly sales updates and with casino stocks in the red after Macau casino revenue declined last month.

Top Asian News

• Japanese Economy Minister Kiuchi said Japan is no longer in deflation, so there is no need for excessively loose monetary policy that favours higher inflation, while he added that the Takaichi administration's policy is different from reflationary policy that aims to pull Japan out of deflation, and is different from Abenomics in that it seeks to achieve both a strong economy and fiscal discipline and focuses on boosting Japan's supply capabilities.
• Japanese Tokyo Core CPI (Sep YY) 2.7% vs. Exp. 2.4% (Prev. 1.8%).
• Japanese Tokyo CPI (Sep YY) 2.7% vs. Exp. 2.5% (Prev. 1.9%).
• Japanese Tokyo CPI Ex Food and Energy (Sep YY) 3.0% vs. Exp. 2.5% (Prev. 2.0%).
• South Korean CPI (Sep YY) 2.9% vs. Exp. 2.9% (Prev. 3.1%).
• South Korean CPI (Sep MM) 0.3% vs. Exp. 0.4% (Prev. 0.2%).

European bourses (STOXX 600 +0.9%) are firmer across the board as they pare back some of Thursday's losses. A pullback in energy prices seems to be supporting equities, with recent Reuters reporting that France is proposing to release 50mln barrels of diesel from Europe and 50mln barrels of crude oil across IEA members, further weighing on the crude complex. Sectors highlight the clear positive bias. Tech leads sectors higher, with Basic Resources and Travel & Leisure following suit, while Health Care is the sector laggard.

Top European News

• BoE Decision Maker Panel (Sep): Year-ahead CPI inflation expectations 3.1% (prev. 3.1%), Three-year-ahead CPI inflation expectations 2.8% (prev. 2.8%), expected wage growth remained at 3.4%.
• UK PM Burnham is reportedly leaving the door open to a snap general election next year, according to The i Paper.
• Moody's said France's ability to tackle key policy difficulties despite political fragmentation is a key factor for the resolution of the negative outlook.
• European HICP (Sep YY) 3.8% vs. Exp. 3.6% (Prev. 3.2%); Services 3.2% (prev. 3%).
• European HICP (Sep MM) 0.6% (Prev. 0.4%).
• European Core HICP (Sep YY) 2.2% (prev. 2.1%).
• European HICP Ex Food, Energy & Tobacco (Sep YY) 2.5% vs. Exp. 2.5% (Prev. 2.4%).

FX

• G10s are broadly firmer against the USD, which has been pressured alongside pressure yields and pressure in the energy complex. That was facilitated by reports that France has proposed plans to release 50mln barrels of diesel from Europe (vs the US request of 120mln over 180 days), and perhaps more pertinently 50mln barrels of crude oil across IEA members – this would include the US.
• Given the recent pressure in yields, the index is under mild pressure this morning and currently holds towards the lower end of a 101.79 to 102.13 range – but still around the prior day’s peak. A material bout of pressure for the USD would likely require significant progress between US-Iran and/or confirmation of a crude stock release. Bar that, the index will likely trade tentatively around the current range as markets await US NFP later today. The US economy is expected to add 90k nonfarm payrolls in September. Analysts note that the August data, where 162k payroll additions were reported, may have been subject to favourable seasonal adjustments, and will be watching to see if the data is revised lower in September. The unemployment rate is expected to hold at 4.1%, an expectation supported by the Chicago Fed’s flash real-time unemployment rate forecast. (A full preview can be found in the Newsquawk Research Suite).
• CHF is the outperformer across G10s this morning, extending on recent gains. There appears to be a bit of an unwind of the recent carry trade that the CHF was subject to, with net positioning of long-shorts at c. -16.45k over the past 3 months. Further helping is some haven-related demand stemming from the French fiscal situation.
• Elsewhere, JPY also holds towards the top of the G10 pile, also buoyed by the yield situation. Domestically, Tokyo CPI accelerated in September, and broadly topped expectations. A report which will no doubt boost calls for the BoJ to hike; it seems like the BoJ is now dealing with waning sentiment across Japanese businesses (evidenced in the latest Tankan survey), and rising inflation in a key leading indicator.
• EUR is a touch firmer this morning, with focus ultimately on the region’s inflation report. Headline Y/Y printed at 3.8% (exp. 3.6%, prev. 3.2%), and Services also rose from the prior. Pertinently, Core HICP moved only a touch higher to 2.2% (prev. 2.1%), which will be welcomed for policymakers, since there is still little evidence of second-round effects. Nonetheless, woes of rising inflation remain – and this data will only further cement calls for another hike later this year

Fixed Income

• A modestly firmer start to the day has extended into one of marked gains across EGBs and Gilts, with the bulk of the move following a constructive report on energy supplies.
• However, while a touch firmer, USTs have not really budged from the unchanged mark, into an afternoon dominated by the September NFP report. In brief, the headline is seen at 90k while the August figure of 162k could be subject to a downward revision after potential distortion from seasonal adjustments. For the Fed, the data isn’t expected to have a significant impact as long as it doesn’t change the broad description of a stable and close to full employment labour market, with inflation very much the focus point.
• Back in Europe, Bunds peaked at 121.37, notching a new high for the week and on track to close the week out with gains of c. 150 ticks (100 of that is from today, at the time of writing), the first positive weekly return since August. While the reported energy stockpile releases will be welcome in the immediacy, it does not change the US-Iran picture, supply risk through Hormuz and the usage of stockpiles now could have a knock on effect during winter. Though, the El Nino will see warmer weather may push any cold spell to later in the season, potentially giving the region some stockpile breathing room.
• EGBs generally trade with the above. For France, OATs hit a 108.76 peak, firmer by 36 ticks at best, but at the lower-end of the WTD 108.02-110.36 band, after the poorly received draft budget. This morning, Moody’s updated on the draft plan and highlighted the clear fiscal and political risks facing France, points that dominate thinking in the French bond space. Reflecting this, the OAT-Bund 10yr yield spread peaked at 146bps this morning, vs 110bps at the start of the week. No real move to the September Flash HICP, with energy once again driving the upside but no overt signs of second round effects as the core components remain at acceptable levels; though, the absolute level means further tightening remains a valid call.
• Gilts also benefit from the energy moves. At an 84.81 session high, firmer by c. 100 ticks at best and set to end the week at highs.
• Australia sells AUD 1.2bln 4.50% April 2033 bonds: b/c 3.00x, avg. yield 5.108%.

Commodities

• WTI Nov and Brent Dec futures are sharply lower after yesterday’s rally, with pressure intensifying during the European morning on reports France proposed releasing 50mln bbls of diesel from Europe alongside 50mln bbls of crude across IEA members. The proposal would be conditional on a US commitment not to impose a unilateral diesel export ban and follows Washington’s request for major European countries to release diesel reserves. WTI fell from USD 90.80/bbl to USD 89.88/bbl on the report, while Brent fell from USD 100.90/bbl to USD 99.76/bbl. European gasoil futures fell over 4% on the reports. Prior to this, the complex was already under pressure despite continued US-Iran tensions, with Trump reportedly telling aides he expects bombing of Iran to resume in November and the Pentagon sending a third carrier strike group to the region. WTI and Brent currently trades at session lows, with the former briefly falling below the USD 89/bbl mark while the latter touches the USD 99/bbl handle.
• Dutch TTF is also softer despite continued European energy-security concerns heading into winter, with attention dominated by discussions around coordinated energy-stock releases. TTF trades towards the lower end of a EUR 71.05-73.61/MWh range.
• Precious metals are firmer ahead of US NFP, helped by the pullback in oil prices and some reprieve in global yields. Spot gold trades towards the upper end of a USD 4,134-4,197/oz range, having recovered further from yesterday’s USD 4,139/oz low, while spot silver is similarly firmer within a USD 60.22-61.56/oz range.
• Base metals were subdued overnight with mainland China still absent for the week-long holiday, but have since clambered into the green on the aforementioned pullback in energy and subsequent boost to risk. 3M LME copper trades in a USD 14,243.03- 14,380.38/t range at the time of writing.
• EU countries discussed a French proposal to release 50mln barrels of diesel from Europe and 50mln barrels of crude oil across IEA members, in response to the US' threat of a diesel export ban, Reuters reported citing sources. The report added that any agreement on further stock releases should include a US commitment to avoid a unilateral diesel export ban.
• France's Elysee said President Macron spoke with US President Trump about energy and fuel prices.
• European Commissioner Jorgensen said the EU is discussing with all IEA members, not only the US, when it is time to release diesel stocks.
• Ukrainian Agricultural Minister said that the area planted to winter wheat in 2027 could decline about 17%.

Trade/Tariffs

• US President Trump said the trade deficit with China has dropped to the lowest in 44 years and that he gets along great with Chinese President Xi, while he added that China used to rip the US badly and that Canada is ripping the US badly.

Central Banks

• Fed's Logan (2026 voter) said the policy rate needs to increase an additional 50bps or more and that without higher rates, inflation will not get to the 2% goal, while she added that policy is not sufficiently restrictive and needs to become modestly tighter. Logan said price stability must be restored and at a minimum, several further rate hikes would reverse last autumn’s cuts. She also stated that it remains uncertain how high the policy rate must go to bring inflation back towards 2%.
• Fed's Bowman (voter) said she sees no urgent need for more rate moves this year, while she touted benefits of a Fed capital plan tied to treasuries.
• ECB's Rehn told Econostream that ECB forecasts are facing extremely high and widespread uncertainty and that the energy surge is nearer to the adverse scenario. Rehn added that one uncertainty is that market sentiment toward AI could reverse suddenly, while higher long-term rates will slow economic growth and reduce the pass-through of energy shocks to prices and wages.

Geopolitics: Iran

• US President Trump reiterated that Iran will never have a nuclear weapon and has no navy or army, while he stated that Iran has not been able to get one of its vessels through the Strait of Hormuz for months. Trump also said huge quantities of oil have passed through the Strait of Hormuz and the US is taking out millions of barrels of oil, claiming that in some cases, it is more than before the war.
• US President Trump said the Iran war will be ending soon, one way or the other, and that it looks like Iran was involved in the UK base incident. Trump warned that Iran will be hit very hard if it is behind the copilot who tried to crash a flight to Israel, while he separately commented that based on what he heard, Iran was connected to the attempted attack on the plane.
• The Iranian National Security Commission said that Iranian management of the Strait of Hormuz will be applied. Ships to Zionist or hostile regimes will not be able to pass through the Strait, others will have to get permission. Bill is queued for parliament.
• IRGC said three UAE-linked tankers attacked recently in the Strait of Hormuz were on the PGWA's non-compliance list, and had transited the Strait repeatedly over the past two months.
• Saudi‑led coalition intercepted and destroyed ballistic missiles launched by Yemeni Houthis towards Khamis Mushait.

Geopolitics: Other

• Russia's Kremlin said Russia will continue operations to completely stop supply of weapons and fuel for the Ukrainian military via the Black Sea.
• Russia's Defence Ministry said they struck a vessel in the Black Sea and an industrial production complex at the port of Izmail in Ukraine’s Odessa region overnight, according to IFX.
• South Korean President Lee said they will take additional measures if Ukraine continues to deny the agreement on North Korean prisoners of war repatriation, while he called on Ukraine to acknowledge the agreement and apologise.

US Event Calendar

 

DB's Jim Reid concludes the overnight wrap

Markets stumbled yesterday as we began Q4, with mounting signs of financial stress focused on Europe. In fact, the daily moves were reminiscent of the Euro crisis in many respects, with sovereign contagion a big talking point. For instance, the Franco-German 10yr spread (+13.9bps) saw its biggest daily jump since March 2020 at the height of the Covid turmoil, the same day that ECB President Lagarde said “we are not here to close spreads”. And over in Italy, the 10yr spread to bunds (+15.9bps) saw its biggest daily jump since July 2022, the day that the ECB delivered their first rate hike in over a decade. Moreover, the impact cascaded across different asset classes, with the Euro (-0.76%) posting its worst day against the dollar since June, whilst the STOXX Banks index (-3.90%) had its worst day since March.

The interesting thing about yesterday’s moves was that there wasn’t a single catalyst driving them. Initially, the day began with a genuinely global bond selloff, driven by higher oil prices and a hawkish batch of US data. Indeed, the 10yr US Treasury yield hit its highest intraday level since 2002, at 5.34%. But as the session went on, it then morphed into a classic risk-off move, with bunds and US Treasuries starting to rally, whilst others like French OATs and Italian BTPs sold off. That went hand in hand with mounting stress for risk assets too, particularly in the affected markets. So France’s CAC 40 (-1.62%) hit a 6-month low, and Italy’s FTSE MIB Index (-2.21%) hit a 3-month low, underperforming the Europe-wide STOXX 600 (-1.30%). French banks came under pressure, with Société Générale (-5.00%), Crédit Agricole (-3.70%) and BNP Paribas (-3.64%) losing significant ground, and this was broadly in line with the broader STOXX Banks (-3.90%) as contagion spread through European markets. Credit took a big hit as well, with European HY spreads (+18bps) seeing their worst session since the start of the Iran war, reaching their widest level in six months.

That financial stress led to growing doubt whether central banks like the ECB could hike rates as aggressively as thought. After all, tighter financial conditions would do some of the work for them in bringing down inflation, and the selloff also raised doubts as to whether the economy could cope with another hike. So when it came to ECB pricing, the number of further hikes priced by December’s meeting fell -6.1bps on the day to 23.5bps. Or in other words, another ECB hike is no longer fully priced by year-end. So that led to a huge collapse in front-end German yields, with the 2yr German yield (-14.2bps) falling back to 3.07%, its biggest drop since April. Meanwhile, the 10yr bund yield (-7.8bps) also fell back to 3.51%.

For Europe, those issues were exacerbated yesterday by the latest rise in energy prices, which hit the continent more given it’s an energy importer (unlike the US nowadays). So Brent crude was up +4.37% by the close to $102.31/bbl, whilst European natural gas futures were also up +2.18%. In part, that followed comments from President Trump, who said in a Time interview that it was “possible” he would resume bombing Iran once the midterm elections had passed. In addition, there were further reports about US military deployments in the Middle East, with Bloomberg reporting the US was sending an additional aircraft carrier, along with 10,000 sailors and Marines to the Persian Gulf. So coupled with the absence of any progress towards a deal, this led to growing pessimism that free shipping via the Strait of Hormuz would resume anytime soon. And in turn, that pushed longer-dated oil futures higher once again, with the June 2027 Brent future up to a new high yesterday of $88.03/bbl by the close.

Whilst European assets struggled yesterday, there was a very different tone in the US. Initially, it looked like Treasury yields would hit new highs, and we did see the 10yr yield hit its highest intraday level since 2002 yesterday, at 5.34%. But that turned in the afternoon, with the 10yr yield ultimately down -4.4bps on the day to 5.24%. Moreover, US equities recovered from their earlier sell-off, with the S&P 500 (+0.19%) ending a run of three consecutive declines, whilst futures for the index are up another +0.27% this morning.

In part, those moves were aided by more dovish commentary from FOMC officials, which added to the sense that officials weren’t in a rush to hike again. So that meant the 2yr Treasury yield (-9.6bps) saw its biggest daily decline since July, closing at 4.79%. Those comments included Vice Chair Jefferson’s, who suggested that deciding on future rate hikes “may take more time”, while Governor Bowman (one of the more dovish voices on the FOMC) said she did not “currently see an urgent need for further action”. That left an October Fed hike just 30% priced by yesterday’s close, down from 37% on Wednesday and 70% on Monday before NY Fed President Williams similarly signalled no urgency for the next hike.

What was also striking was how the financial stress and the Fed commentary outweighed a hawkish batch of US data, which initially put upward pressure on Treasury yields earlier in the day. Collectively, that data painted a picture of ongoing resilience in the US economy, alongside plenty of price pressures, so it was very much in line with the prints of recent weeks. Among others, the weekly initial jobless claims fell to a 10-week low of 197k in the week ending September 26 (vs. 200k expected). Then the continuing claims for the previous week fell to a three-and-a-half-year low of 1.701m (vs. 1.725m expected). And just 90 minutes after that, the ISM manufacturing print came in at 54.5 in September (vs. 55.0 expected), but the prices paid subcomponent surged more than expected to 77.9 (vs. 73.0 expected) and the employment component rose more than anticipated to 52.7 (vs. 52.0 expected). So initially that drove yields higher, but the wider risk-off move then saw that reverse course.

With all that in mind, today’s focus will now turn to the US jobs report for September, which is out at 13:30 London time. Clearly, the monthly jobs reports are always a macro highlight, but this is an important one, as the continued data resilience has been a huge factor supporting US risk assets, and it’s also given the Fed space to start hiking rates. Indeed, last month’s report was very strong, with payrolls up +162k alongside positive revisions to the previous two months. So that added to the hawkish momentum leading up to the Fed’s September meeting a couple of weeks later. This time around, our US economists are expecting payrolls to come in at +60k, with the unemployment rate holding steady at 4.1%.

Ahead of that jobs report, Asian markets have also generally lost ground overnight, with the Hang Seng (-2.64%) sharply lower as it returns after the previous day’s holiday. Then in Japan, the Nikkei is down -0.94%, which comes as the Tokyo CPI data for September was faster than expected. That showed headline CPI rising to +2.7% (vs. +2.5% expected), whilst the core-core measure reached its fastest in over a year, at +3.0% (vs. +2.5% expected). Otherwise in South Korea, the KOSPI is up +0.26% this morning, and the country’s CPI eased to +2.9% in September, in line with expectations. In mainland China, markets are still closed for a holiday.

Looking at the day ahead now, the data highlights will include the US jobs report for September, and the Euro Area flash CPI print for September. From central banks, we’ll hear from the Fed’s Logan, and the ECB’s Moulin, Cipollone, Rehn, Sleijpen, Vujcic and Nagel.

Tyler Durden Fri, 10/02/2026 - 08:27

UK Arrests British Iranian Dual National Over Security Incident Near Airbase

Authored by Ryan Morgan via The Epoch Times,

Authorities in the UK have arrested a dual national of the UK and Iran in connection with a security incident near the Fairford Royal Air Force base in Gloucestershire, England, on Sept. 27.

In an Oct. 1 update, the UK's Counter Terrorism Policing identified the arrested British Iranian dual national as a 25-year-old man. He was arrested on suspicion of preparing to commit terrorist acts.

Counter Terrorism Policing also confirmed searches at a pair of properties in connection with the ongoing investigation into the RAF Fairford security scare.

RAF Fairford hosts U.S. Air Force elements and is a key forward operating location for U.S. bombers such as the B-52 Stratofortress and B-1B Lancer.

In a Sept. 30 interview with the BBC, British Prime Minister Andy Burnham said there are strong indications the recent security incident near RAF Fairford is linked to Iran.

UK Senior National Coordinator for Counter Terrorism Policing Vicki Evans said on Oct. 1: "The investigation into circumstances surrounding events in Gloucestershire is hugely complex, and our specialist teams are interrogating multiple lines of enquiry.

"As we've made clear, we're looking at all possible angles - including possible foreign state involvement."

Authorities initially arrested five men in connection with the security incident near RAF Fairford but released them on police bail soon after. In their latest update, Counter Terrorism Policing said these five individuals remain on bail.

In a previous update on the investigation, Counter Terrorism Policing said it arrested the first five men on suspicion of committing offenses under the UK's Explosives Act. After searching multiple vehicles in connection with the Sept. 27 security incident, authorities said they found no explosive devices but did recover some gasoline.

Tehran has continued to deny any involvement in the incident.

"You're barking up the wrong tree," Iranian Foreign Minister Abbas Araghchi said on Sept. 30.

On Oct. 1, Iran's Ministry of Foreign Affairs said it had summoned British Ambassador to Iran Hugo Shorter to reiterate its criticism of Burnham's recent comments about the ongoing investigation, which the ministry described as "baseless and ridiculous."

"The British ambassador emphasized that he will convey the Islamic Republic of Iran's protest to London," the Iranian Foreign Ministry said in a press statement.

In July, Iran's Islamic Revolutionary Guard Corps said it would treat any bases used to launch strikes on Iranian territory as legitimate targets for retaliation.

The British government has authorized U.S. forces to use some of its bases, including RAF Fairford, to launch strikes on Iranian missile sites that have targeted international shipping.

Reuters contributed to this report.

Tyler Durden Fri, 10/02/2026 - 08:05

September Jobs Preview And How To Trade It: Beware A Bond Squeeze As August Seasonals Reverse

A month ago, our August jobs preview argued that "good news would be bad news." Then August delivered good news in volume. Payrolls rose by 162K, a 4-sigma beat and 38K above the highest estimate on Wall Street. Rate-hike odds jumped, and two weeks later Warsh hiked for the first time since July 2023.

So it's a little awkward that the Street now spends most of its September previews explaining why August didn't really happen. The main suspect is seasonal adjustments. Barclays says that if August had been adjusted with last year's seasonal factors, the "blockbuster" 162K gain would have been a 74K decline, which may very well have prevented a rate hike.

But wait, there's more: the Fed backdrop has also changed dramatically in the past week. On Monday, the market put the odds of an October hike at roughly 70%. Then Williams said there was no "urgency" and core PCE came in soft. By Thursday's close the odds were about 25%, and Goldman had pushed its next-hike call to December. Friday's report is the only one before the Oct 28 FOMC. The market seems to think it won't matter much, which tends to be when it does.

Expectations

Here are the median Wall Street expectations:

• Headline nonfarm payrolls: +90K (prev. +162K). The 3-month average is 71K, the 6-month average 107K, the 12-month average 50K. 
  • Private payrolls: +81K (prev. +127K).
• Unemployment rate: 4.1% (prev. 4.1%, 4.14% unrounded). The Chicago Fed's final real-time forecast is 4.10%. At the September FOMC, officials lowered their end-2026 unemployment projection to 4.1% from 4.3%.
  • Labor force participation rate: 61.6% (prev 61.6%)
• Average hourly earnings: +0.3% M/M (prev. +0.3%), with the annual rate seen at 3.2% Y/Y (prev. 3.1%).
  • Average workweek: 34.3 hours (prev. 34.4).

Forecasts range from Barclays' +50K to Nomura's +130K. Almost every bank is below August's print, and most are below consensus.

Below are the top and bottom forecasts among the 80 total estimates. 

Goldman: +80K, with the unemployment rate down to 4.0%

Goldman published its NFP preview Thursday afternoon (full note available to pro subs): they expect +80K, slightly below consensus but above the three-month average of +71K, and +75K for private payrolls. In the same note, Goldman also cut its unemployment-rate forecast to 4.0% from 4.1% because continuing claims have fallen. It expects a below-consensus +0.2% for average hourly earnings, citing "negative calendar effects." Here is how Goldman lays out the arguments.

Arguing for a stronger report:

• Layoffs. Initial jobless claims averaged 204K in the September payroll month, in line with August. The JOLTS layoff rate fell 0.1pp to 1.0%. Challenger announced layoffs, seasonally adjusted by Goldman, fell 2K to 52K.
• Big data. The alternative measures of employment that Goldman tracks averaged +77K in September. That is up from +31K in August, though still a bit below consensus.

Arguing for a weaker report:

• A late Labor Day. Labor Day fell on Sept 7 this year. In every past September with a Labor Day that late, payroll growth came in at or below its recent trend, as Goldman shows below.
• August was flattered. Rebounds in local government education and leisure & hospitality added a combined 104K to August payrolls. Goldman notes that both series "experience large swings in employment across the summer on a not-seasonally-adjusted basis, making it difficult to seasonally adjust them well." The bank does not expect a repeat.

Mixed/neutral factors:

• Job availability. Averaging JOLTS, Indeed and LinkUp, Goldman estimates job openings were roughly unchanged in August, and Indeed and LinkUp were stable in September. That is a calmer reading than our take on Tuesday's JOLTS release, when a record plunge in real-estate job openings dragged the headline sharply lower. The Conference Board labor differential fell 2.5pt to +1.7.
• Employer surveys. The employment components of Goldman's manufacturing and services survey trackers rose to 53.2 and 51.4. However, Goldman says survey data has been "less useful—and at times misleading" since the pandemic, and gives it little weight.

On unemployment, Goldman says the drop in continuing claims supports a rounded 4.0%. It adds a caveat: its slack tracker, which combines ten measures of labor market slack, stands at 4.6%. That suggests the labor market is "somewhat softer than the unemployment rate alone currently implies." It is a familiar point for anyone who read our note on the long-term unemployment share creeping up to 27% despite August's strong hiring.

The seasonals

Seasonal adjustments are the main source of uncertainty this month, and Barclays (+50K) has done the most work on it. The bank says its usual claims-based models "project strong gains." Its alternative indicators point to "a return to more modest job gains." Barclays also expects August to be revised down:

"Had the August nonfarm payroll employment been adjusted with the August 2025 seasonal factors, it would have registered a drop of 74k jobs instead of the 162k gain. We suspect that the more the August estimate gets revised down, the more the September estimate may appear strong, implying upside risks to our September payroll forecast. Conversely, if the August estimates see little downward revision, we would expect the September payroll estimate to come in relatively weak, lower than our baseline forecast of +50k."

In short: if August gets revised down, September may look strong, and if it doesn't, September may look weak.

Wolfe Research (+70K, UR 4.2%) shows how unusual this year's adjustment was. In a typical August, seasonal factors push the adjusted number below the raw number, often by more than 100K. This August, for the first time since 2021, they pushed it up.

Seasonal factors normally depress August. This year they boosted it.

BofA's Shruti Mishra (+60K, private +50K) has the clearest explanation of the August quirk. Unadjusted job growth in August was actually lower than a year earlier. But this year the seasonal adjustment was "close to zero," versus a 178K subtraction in August 2025, so "most of the underlying NSA gain flowed through to the seasonally adjusted print." BofA's explanation is the survey calendar: August 2026 had a four-week survey interval, while 2024 and 2025 had five. That "raises the risk of September payback in seasonal factors, which could be more or less punitive than what we are penciling in." BofA's advice: "Don't fall for the headline." It still puts underlying job growth at a healthy "100k+."

BofA also flags one more possible drag: about 200K Haitian TPS holders lost their work authorization on July 27. They are concentrated in food services, healthcare, transport and retail, and the loss has "not yet shown up clearly in the payroll data." BofA's base case is a gradual headwind rather than a one-time shock, though it sees "a downside risk from the impact being felt more significantly than we are expecting in September."

Nomura (+130K, the Street high) disagrees. It points out that August is historically the month most likely to be revised up between the first and second estimates.

Labor market proxies

• Jobless claims: Initial claims printed 198K in the survey reference week (vs 207K for the August window). Continuing claims fell to 1.719mn from 1.771mn. Thursday's release showed continuing claims down again to 1.701mn, the lowest since March 2023, which supports the 4.0% unemployment calls.
• ADP: Private payrolls rose +90K (exp. 70K, prev. 36K after revision). It was the first acceleration in hiring since May, led by education/health and leisure/hospitality. Goldman made no change to its NFP forecast after the release.
• Revelio: +56.9K in September, up from an upwardly revised 40.6K in August. Public administration, health care and construction led.
• Challenger: 43,281 announced job cuts, the lowest September total since 2022. AI was again the leading reason cited, and tech had the most cuts. Hiring plans were the lowest for a September since 2011.
• Business surveys: S&P Global's flash PMI said employment rose at the fastest pace since June 2022. ISM manufacturing employment rose 1.5 points to 52.7. Nomura's heat map shows how broad the improvement has been.

• Consumer confidence: This is the outlier. In the Conference Board survey, the "jobs plentiful" minus "jobs hard to get" spread narrowed to just +1.7, and net six-month job expectations fell to -14.4. Piper Sandler (+60K) notes that the survey's "jobs hard to get" share keeps rising, "suggesting consumers feel like the jobless rate is still trending higher." Meanwhile, the share of insured workers drawing continuing claims is at a historically low 1.1%.

Wages and the unemployment rate

Forecasts for the unemployment rate run from 4.0% to 4.2%. The reason is August's unrounded 4.14%.

• Goldman and Nomura expect 4.0%, based on the drop in continuing claims.
• Wolfe expects 4.17%, which rounds to 4.2%.
• BofA expects 4.1% but warns of payback after household employment "surged by 569k in August, after two consecutive declines," which could push the rate to 4.2%. It adds that "even a 4.2% print would be consistent with healthy underlying labor market conditions."
• Deutsche (+60K) warns that "even slight outperformance on labor force participation could push the U-3 rate to round up to 4.2%."

On wages, Goldman and Nomura expect +0.2% on calendar effects, while Deutsche is above consensus at +0.4%. Goldman's broader wage tracker stands at 3.5% Y/Y, up 3.1% annualized in Q3. Wolfe points out that wage growth is still "below the Fed's preferred 3.5-4.0% range for wage inflation" and calls it "surprisingly soft." Not exactly a wage-price spiral.

Fed policy

After its first hike in three years, the FOMC median projected one more hike in 2026. For a moment, the market priced it for October. Then Williams said there was no urgency, August core PCE printed a soft 0.25%, and Jefferson hinted at a pause. October pricing fell from ~17bp on Monday to 6.3bp at Thursday's close, according to Goldman's "What is Priced In." About 25bp of hikes are still priced by year-end, and ~50bp by March 2027.

Goldman's economists now expect a December hike. They see "a strong chance that the FOMC will ultimately conclude that additional rate hikes are unnecessary," since they expect core PCE to end the year at 3.0%, versus the FOMC's 3.4%. Barclays also expects a hold in October and a hike in December. Deutsche's base case is two more hikes, in December and March. Goldman's STIR desk sums up the consensus as "skip-then-hike." BofA, citing Warsh's recent comments on labor market resilience, doesn't expect the jobs report "to be a game changer for October hike pricing. Markets will likely focus on CPI."

Market reaction and how to trade it

Wolfe argues it would take a big surprise to move Fed pricing:

"We estimate that payrolls would need to print below 20k or the unemployment rate would need to rise above 4.3% to materially trim market expectations for Fed tightening. A print in the 20-120k range or an unemployment rate between 4.05-4.24% would likely have little impact on market pricing."

Options traders seem to agree. Goldman's derivatives desk had the SPX straddle for payrolls day at 1.18% on Monday. By Thursday, after the hike odds collapsed, it was down to ~67-70bp, below the trailing 8-session average of ~72bp. The NDX straddle is ~95bp. In FX, Goldman's MarketView puts the implied NFP move at ~42bp in USDJPY and ~38bp in EURUSD. Both are near the top of their 1-year realized ranges, so FX is the one market still paying up for a surprise.

Goldman's Rich Privorotsky says the real issue is the long end, not the front end:

"Rates: Still totally bidless at the back end. PCE came lighter, but it barely changed the long end trajectory. October looks less likely after softer inflation and Fed speak, but the stress remains further out the curve... We have taken hikes out of the front end... the real problem is the back end still doesn't care."

That matters for positioning. Goldman's Brian Garrett says the bank's CTA model shows managers "extremely short global bonds (~$390bn notional)." US 10Ys are at 99% of max short and 30Ys at 100%. With systematic funds that short, a weak print, or even a 4.2% unemployment rate, could set off a massive short squeeze in bonds.

For stocks, Goldman's Nelson Armbrust notes the S&P is ~2% from all-time highs, and "any relief in rates would be a trigger for an equity rally." JPM's Andrew Tyler sees the mirror image: with ADP strong, "NFP tmrw... may have an upside surprise," and "with labor data we may be in a 'Good News is Bad News' mentality." He adds: "if unemployment stays 4.0%, or higher, then bonds will not move to price add'l hikes."

Putting it together:

• Goldilocks: roughly 40-100K, unemployment at 4.0-4.1%, AHE at 0.2%. Bonds rally modestly, stocks follow.
• Too hot: 120K+ (Nomura territory) with unemployment at 4.0% puts October back on the table. Given how quickly the market priced it out, it could be priced back in just as fast.
• Too cold: a sub-20K print or 4.2%+ unemployment means August was a seasonal mirage. Hikes get priced out, and the CTA bond short gets squeezed.

As ever, the revision to August may matter more than the September headline.

More available to pro subscribers including the Goldman, BofA, Barclays, Nomura and other notes.

Tyler Durden Fri, 10/02/2026 - 07:58