Stellar 3Y Auction Blows Away Expectations With Huge Stop-Through, Near Record Foreign Demand, Record Low Dealers

With interest rates in freefall in recent days, but reversing modestly this morning, traders were wondering if today's auction of $58BN in 3 year paper would accentuate the modest reversal or extend on the positive momentum observed over the past week. The answer was resoundingly the latter, and here's why.

First, the auction stopped at high yield of 3.485%, down sharply from 3.669% last month, and the lowest since Sept 2024 when the Fed was about to cut rates by a jumbo 50bps on another huge downward jobs revision print. The auction stopped through the When Issued 3.492% by 0.7bps, and following 3 straight tailing auctions, was the biggest through since Feb 2025.

The bid to cover was an impressive 2.726%, up 20bps from August and the highest since February.

The internals were even more impressive, with Indirects taking down a near record 74.24%, up from 53.99% in August and the 2nd highest on record!

And with Directs awarded 17.39%, Dealers were left with just 8.37%, the lowest on record. 

Overall this was a blowout 3Y auction, easily one of the top 3 on record, and the bond market certainly liked it: with yields moving higher after today's record negative revision (on expecations of steepening that will follow the inflation that rate cuts usher in) we have seen renewed buying across the curve.

Tyler Durden Tue, 09/09/2025 - 13:29

"A Flashing Red Warning Light": Big Oil Is Making Big Job Cuts

Oil and gas producers worldwide are bracing for a prolonged downturn, with job losses and investment cuts spreading through the industry, according to a new report from Financial Times. ConocoPhillips, Chevron, and BP have all announced large-scale layoffs, while others are shelving or selling projects to conserve cash. “This isn’t just a Conoco problem,” said Kirk Edwards of Latigo Petroleum. “It’s a flashing red warning light for the entire US oil and gas industry.”

FT writes that the sector is under pressure as crude prices, which spiked after Russia’s invasion of Ukraine, have since dropped by half. Opec+ has shifted strategy, increasing output to regain market share, a move that adds further price strain. Analysts at Wood Mackenzie predict Brent could slide under $60 a barrel by early 2026 and stay there “up to a few years.” Below that level, western majors struggle to fund both shareholder payouts and new projects.

The cuts are hitting hardest in the US, where shale drilling requires around $65 a barrel to stay profitable, according to the Dallas Federal Reserve. ConocoPhillips has warned that as many as 3,250 staff may lose their jobs by Christmas, while Chevron has been working through 8,000 cuts since February. BP has already trimmed 4,700 positions. “The way we protect the most jobs for the most people is by remaining competitive,” said Chevron’s Mike Wirth.

State-owned producers are also retrenching: Saudi Aramco raised $10bn by selling part of its pipeline network, and Malaysia’s Petronas shed 5,000 jobs. Capital spending worldwide is forecast to fall 4.3% this year to $341.9bn — the first decline since 2020 — and US output is expected to contract for the first time since 2021.

Some companies are leaning on outsourcing and digital tools to offset the downturn. “AI is giving operators new ways to optimise in a challenging market,” said Andrew Gillick of Enverus. But industry veterans warn that shrinking investment may have long-term consequences. “Domestic oil producers are finding it hard… which is costing jobs,” said Roe Patterson of Marauder Capital. “The problem is that our domestic oil production may not be there when the country needs it in the future.”

Tyler Durden Tue, 09/09/2025 - 13:25

Wall Street Giant Cantor Debuts Bitcoin Fund With Gold Insurance

Authored by Mat Di Salvo via Decrypt.com,

The fund will supposedly protect investors from Bitcoin's sometimes huge dips by using the precious metal...

• Cantor Fitzgerald has debuted a new Bitcoin fund.

• The fund also gives investors exposure to gold—for downside protection.

• Gold rose to a record high near $3,680 on Monday, while BTC is trading about 9% off its all-time best, set last month.

Wall Street giant Cantor Fitzgerald debuted a new fund Monday that aims to give investors exposure to Bitcoin's gains and downside protection with gold. 

The fund, the Cantor Fitzgerald Gold Protected Bitcoin Fund, which was announced in May at the Bitcoin 2025 conference in Las Vegas, Nevada, aims to address the concerns of investors scared of Bitcoin

Monday's announcement said that the fund "minimizes the risk of short-term volatility and reduces the impact of correlation spikes while continuing to benefit from the long-term upside trend of Bitcoin." 

"This gold-protected Bitcoin strategy spans five years and tackles both risks head-on: it captures Bitcoin's upward trajectory while gold provides a safety net that historically performs well when markets decline," Global Head of Cantor Fitzgerald Asset Management Bill Ferri said. 

He added:

"With risk assets at or near all-time highs, timing and protection matter."

Decrypt reached out to Cantor Fitzgerald for comment. 

Bitcoin, the largest and oldest digital asset, has in the past made massive gains but experienced huge drops throughout its 16 year history.

Bitcoin was recently trading at under $112,182, up about 1% over the past 24 hours and more than 20% year-to-date according to cryptocurrency markets data provider CoinGecko. But the leading cryptocurrency by market cap has fallen nearly 9% since reaching an all-time high of $124,128 last month. 

To be sure, experts recently told Decrypt that with the approval of spot Bitcoin ETFs, which institutions have flooded into, the asset should experience less volatility. The digital coin's volatility has significantly dampened this year. 

But during the last bull market of 2021, the asset hit a high of over $69,000 per coin only to plunge to under $16,000 the following year. The current up cycle has likely yet to see an end, many analysts believe. 

Cantor's Bitcoin lending business has carried out its first transactions, the investment banking giant announced on Tuesday, underscoring its increasing presence in the crypto space. Prime broker FalconX and crypto lending protocol Maple Finance were the first companies to draw on the financing. The New York-based Cantor, part of Cantor Fitzgerald, expects to make up to $2 billion in financing available in this first phase, the company said. “Early on, Cantor recognized the transformative impact...

Gold, the traditional save haven asset, hit a new high Monday near $3,680 per ounce and is up more than 37% year-to-date, amid ongoing concerns about the U.S. economy, inflation and other macroeconomic uncertainties.

Cantor was among the early, vocal Wall Street supporters of Bitcoin. The firm helps custody the Treasury reserves for stablecoin giant Tether's USDT stablecoin product. Its former chairman and CEO Howard Lutnick, an advisor to Donald Trump during his 2024 presidential campaign, is now U.S. Commerce Secretary.

Tyler Durden Tue, 09/09/2025 - 13:05

Nepal Descends Into Chaos After Social Media Ban, PM Resigns, Finance Minister Dragged Through Street

Chaos has descended on Nepal amid raging mass protests against a short-lived ban on social media, and accusations of widespread government corruption. The small Himalayan country has descended into hellish conditions in less than a mere 48 hours of raging anti-government demonstrations.

The protests appear mostly led by the young, after several popular social media sites were blocked and clashes with police led to authorities firing on crowds, resulting in 19 people dead. 

Attack on Nepalese communist party office Tuesday, via AP

But even after the social media ban was lifted amid the pressure and mayhem, demonstrators set fire to the homes of top Nepalese leaders and and even parliament building. 

Specifically Facebook, X, Instagram, and YouTube were blocked among some two dozen others, after the government said the companies failed to comply with local law by failing to register for requred government oversight.

Parliament burned and surrounded by thousands...

In Nepal, politicians ban social media use and citizens burn down parliament. Politicians flee by helicopter. pic.twitter.com/6Sju9CH7Jm

— RadioGenoa (@RadioGenoa) September 9, 2025

The airport was also shuttered and army helicopters were seen deployed to rescue government ministers from the mob. Apparently, the country's finance minister wasn't so lucky...

India Today: Nepal's Finance Minister Bishnu Prasad Paudel reportedly chased by protesters and kicked after a video showed him fleeing down a street.

❗️ Nepal's Finance Minister reportedly chased by protesters and kicked after a video showed him fleeing down a street — India Today https://t.co/n3CzE7ntOD pic.twitter.com/w21FIFRzpu

— RT (@RT_com) September 9, 2025

According to reports, "Nepal's finance minister was chased and beaten by demonstrators Tuesday as Prime Minister KP Sharma Oli resigned following days of violent student-led protests against corruption and a ban on social media."

⚡️ Nepali Finance Minister dragged along street by angry protesters https://t.co/OUC8A1q4g8 pic.twitter.com/UX3DwLN7YV

— RT (@RT_com) September 9, 2025

Residents of top politicians in Kathmandu have been reported attacked and in some cases damaged or set on fire, including the prime minister of the country, KP Sharma Oli. He has since stepped down in the wake of the protester killings.

"Oli’s private home was among those set on fire, as were those of the president, home minister and the leader of the country’s largest party, Nepali Congress, which is part of the governing coalition," AP reports.

"Oli’s family was at the official residence at the time. The home of the leader of the opposition Communist Party of Nepal (Maoist) was also set ablaze," AP adds.

Clashes in the streets, via AP

The moment at which police opened fire on crowds was the tipping point. Even after the social media ban was reversed, the rioting became more intense.

“We are here to protest because our youths and friends are getting killed, we are here to see that justice is done and the present regime is ousted,” one eyewitness interviewed by international press outside the damaged parliament building said Tuesday. "K.P. Oli should be chased away."

Protestors set Nepal’s Energy Minister’s house ON FIRE — Prez house STORMED

Banknotes RAIN down as Gen Z rioters start looting the houses pic.twitter.com/t1ggYZ07Dz

— RT (@RT_com) September 9, 2025

A key part of what's driving the outrage related to the protests dubbed 'Gen Z' is that those killed by police were found to have been shot in the head and chest, according to hospital staff who received the dead and wounded.

One protester told the BBC, "Rather than the social media ban, I think everyone's focus is on corruption." She added, "We want our country back - we came to stop corruption."

Tyler Durden Tue, 09/09/2025 - 12:45

Why Billions In AI Investment Can Be A Pitfall For Some Companies

Authored by Autumn Spredemann via The Epoch Times (emphasis ours),

The artificial intelligence (AI) gold rush has reached American businesses, but despite billions being spent, many companies aren’t seeing a return on their investment in the emerging technology.

Photo illustration of a phone screen with AI logo, on May 16, 2025. Oleksii Pydsosonnii/The Epoch Times

The United States is the world’s leading investor in AI technologies. Tech giants such as Amazon, Google, Meta, and Microsoft have led the way in private sector investment and announced more than $100 billion in additional AI expenditures this year.

An analysis from CMS developer Storyblok noted that eCommerce businesses are spending, on average, nearly $400,000 on AI solutions for enhanced customer service experiences. However, only 32 percent reported even a “slight improvement” in operations resulting from their AI investment.

Massachusetts Institute of Technology (MIT) published research showing that despite U.S. companies spending upwards of $40 billion on AI investments, 95 percent have seen zero monetary return.

The study found that only 5 percent of integrated AI pilot programs are producing millions of dollars worth of value. Businesses stuck in the start-up phase of integration suffer what AI developer and vice president of Vapor IO, Kamil Mansuri, called “magic wand” thinking.

“Companies stuck in pilot hell usually have three issues: unclear success metrics, trying to solve everything at once, and treating AI as the goal instead of the solution,” Mansuri told The Epoch Times.

Mansuri said the MIT study findings didn’t surprise him because, in his experience, companies tend to treat AI like a magic wand instead of a tool for specific problems. Mansuri said the best way to avoid this pitfall is to steer clear of what he called “vague AI transformation.”

“At Vapor IO, we saw real ROI [return on investment] because we targeted concrete use cases like infrastructure optimization and automated failover systems,” Mansuri said.

“The difference is focus …. We cut cloud spend from $1.5 [million] to $800,000 by using AI for resource optimization because we knew exactly what problem we were solving.”

Mansuri believes the key to monetary return on AI investments comes from starting small and choosing an area with a measurable impact.

“The companies seeing results pick one specific pain point, prove value there, then expand,” he said.

Trial and Error

Mansuri is among many trying to peel back the corporate hype to expose what lies behind the investment-returns gap: a disconnect between integration and workflows. The MIT report also pointed to a lack of feedback loops or a misalignment with individual business needs.

“We invested a significant amount of money in making use of AI at Ranko Media and, overall, replacing humans didn’t work at all. Enabling our team to produce more output is where we found the best ROI,” Nick Rubright, CEO of Ranko Media, told The Epoch Times.

“For example, we create lots of content for our clients ... We tried to automate content with AI, but the problem for us was that in GEO [generative search optimization] and SEO [search engine optimization], it’s winner-take-all. So we had to go back to leveraging human writers with real-world subject matter expertise because we needed to create content that would be competitive on the internet,” Rubright said.

A smartphone and a laptop displaying the logos of the artificial intelligence OpenAI research laboratory and ChatGPT robot, in Manta, near Turin, on Oct. 4, 2023. Marco Bertorello/AFP via Getty Images

He added that his company still uses AI to create content, but only the tools that are useful to his workforce and with the specific goal of expediting repetitive tasks.

By taking the focused integration versus human replacement approach, Rubright said AI has significantly improved his company’s content profitability.

“We make about 4x margin on content now, and the performance of that content has improved significantly across the board. I think it’s because humans have instinct from prior experience, but AI just sort of does what everyone else is doing and uses data, not experience,” he said.

Rubright also believes executives who view AI as a cheap replacement for human labor likely won’t see the returns they expect.

“There’s a lot of talk about AI being a human replacement, and lots of AI startups claim their tools can replace workers, but I’ve never found this to be true because these new tools still need management,” he said.

The phenomenon of high AI-tool adoption and low industry disruption rates is something the MIT report observed across 300 publicly disclosed AI projects, interviews with 52 organizations, and responses from 153 senior leaders at four key industry conferences.

So far, industries showing the most successful AI transformation include telecommunications and professional services.

The report also noted that established large language model AI programs such as ChatGPT have higher rates of successful corporate deployment than their custom-made counterparts. Many of the failed attempts to integrate custom AI tools into businesses were attributed to “brittle workflows, lack of contextual learning, and misalignment with day-to-day operations.”

Mansuri said he sees three main barriers come up regularly for companies struggling to get a return on their AI investment.

“First, data quality. You can’t build reliable AI on messy data. Companies rush to implement models without cleaning up their data infrastructure first. This is like trying to cook gourmet meals with spoiled ingredients,” he said.

The second one he noticed is unrealistic expectations at the executive level. Mansuri said many CEOs expect to see an “immediate transformation” after sinking money into AI technologies.

Finally, he said, many leadership teams try to retrofit existing roles instead of hiring people who actually understand both the tech and the business applications.

“You need engineers who can bridge the mercurial gap between cutting-edge AI capabilities and practical business value,” Mansuri said.

A software company’s booth is seen during the AI+Expo Special Competitive Studies Project in Washington on June 2, 2025. As AI technology advances, its use in company administrative work has become more common. Madalina Vasiliu/The Epoch Times Fixing Bottlenecks

Starting small and having clarity around what AI tools are being used for has helped many business owners steer clear of an investment sinkhole, experts said.

“We’ve seen tangible ROI from AI because we started small and applied it to specific bottlenecks rather than chasing a big project,” Eric Turney, president of custom product manufacturing firm The Monterey Company, told The Epoch Times.

Turney said his company uses AI to generate SEO-optimized content and streamline customer responses, which has significantly reduced their cost per lead and improved lead response times.

“Unlike companies that stall, we’ve turned AI into a revenue driver by tying it directly to measurable outcomes,” he said.

Nick Strada, the founder of ad agency Bruiser Creative, is also seeing a fast return on his AI investment because he put it into production immediately. It has paid for itself, even with big projects.

“AI tools aren’t lab toys, they’re embedded in workflows that affect both cost and revenue,” Strada told The Epoch Times.

He said on the cost side, automation through AI tools has saved money on labor hours with tasks such as parsing briefs, scraping campaign data, and generating research reports. In terms of revenue generation, Strada said his company is seeing returns there, too.

He used a recent example of when a client came to his company with a seemingly impossible schedule and modest budget, which AI was able to help solve.

“By combining human craft with AI-enhanced workflows, including image generation, scaling tools, [and] automated asset preparation, we produced work that reached Cannes Lions scale. That success generated new client opportunities and reinforced relationships,” he said.

Strada said reaping the rewards from smart AI investments isn’t a theoretical concept: “It shows up as reduced operational overhead, new project wins, and the ability to make ideas come to life in ways that were previously not possible.”

Turney said successful AI integration in a business requires clarity on its place within the company workflow.

In his experience, Turney has noticed “companies often overinvest in experimental tools or broad strategies, but fail to integrate AI into their daily operations with accountability effectively.”

He said another corporate pitfall is treating AI like a “magic bullet,” rather than continually refining its role.

Mansuri said the formula for successful AI investment is simple: Industries with clear, measurable processes see faster returns. For example, he said logistics and supply chain optimization manifest revenue quickly because route planning and inventory management have direct cost savings that can be measured in real-time.

Alternatively, Mansuri said industries that are heavily regulated, such as health care, can take longer to show returns on AI investment.

“Industries with quantifiable processes and clear success metrics see faster ROI than those with subjective or heavily regulated outcomes,” Mansuri said.

In a March report, Morgan Stanley noted many company executives are optimistic about seeing a return on their AI investments amid rosy forecasts of hundreds of millions in profit gains over the next few years.

However, the investment bank tempered this enthusiasm by acknowledging that AI-investments with long-run payoff are challenging to identify.

“AI adopters are already outperforming the broader market,” Andrew Pauker, a director at Morgan Stanley Equity Research, said in a statement.

“Companies discussing AI adoption have been rewarded in fourth-quarter earnings.”

Tyler Durden Tue, 09/09/2025 - 12:25

The Mark Of Kaine: How A Senator's Remarks Border On Constitutional Blasphemy

Authored by Jonathan Turley,

Sen. Tim Kaine (D-Va.) this week warned the American people that a Trump nominee for a State Department position was an extremist, cut from the same cloth as the Iranian mullahs and religious extremists.

Riley Barnes, nominated to serve as assistant secretary of State for democracy, human rights and labor, revealed his dangerous proclivities to Kaine in his opening statement when he said that “all men are created equal because our rights come from God, our creator; not from our laws, not from our governments.”

It was a line that should be familiar to any citizen — virtually ripped from the Declaration of Independence, our founding document that is about to celebrate its 250th anniversary.

Yet Kaine offered a very surprising response in the Senate Foreign Relations Committee hearing.

“The notion that rights don’t come from laws and don’t come from the government, but come from the Creator — that’s what the Iranian government believes,” he said.

“It’s a theocratic regime that bases its rule on Shia (sic) law and targets Sunnis, Bahá’ís, Jews, Christians, and other religious minorities. They do it because they believe that they understand what natural rights are from their Creator. So, the statement that our rights do not come from our laws or our governments is extremely troubling.”

The idea that laws “come from the government” is the basis of what is called “legal positivism,” which holds that the legitimacy and authority of laws are not based on God or natural law but rather legislation and court decisions.

In my forthcoming book celebrating the 250th anniversary, Rage and the Republic: The Unfinished Story of the American Revolution, I detail how the Declaration of Independence (and our nation as a whole) was founded on a deep belief in natural laws coming from our Creator, not government.

That view is captured in the Declaration, which states, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Kaine represents Virginia, the state that played such a critical role in those very principles that he now associates with religious fanatics and terrorists.

In fact, Kaine’s view did exist at the founding — and it was rejected. Alexander Hamilton wrote that “The sacred rights of mankind are not to be rummaged for among old parchments or musty records. They are written, as with a sunbeam, in the whole volume of human nature, by the hand of the Divinity itself, and can never be erased or obscured by mortal power.”

Although the Framers were clear, Kaine seemed hopelessly confused. He later insisted that “I’m a strong believer in natural rights, but I have a feeling if we were to have a debate about natural rights in the room and put people around the table with different religious traditions, there would be some significant differences in the definitions of those natural rights.”

This country was founded on core, shared principles of natural law, including a deep commitment to individual rights against the government. The government was not the source but the scourge of individual rights.

This belief in preexisting rights was based on such Enlightenment philosophers as John Locke who believed that, even at the beginning when no society existed, there was law, “The state of nature has a law of nature to govern it, which obliges every one,” he wrote. “And reason, which is that law, teaches all mankind.”

Note that a natural law can also be based on a view of the inherent rights of human beings — a view of those rights needed to be fully human. Like divinely ordained rights, these are rights (such as free speech) that belong to all humans, regardless of the whim or want of a given government. They are still not “rights [that] come from our laws or our governments.”

The danger of legal positivism is that what government giveth, government can take away. Our prized unalienable rights become entirely alienable if they are merely the product of legislatures and courts.

It also means that constitutional protections or even the constitutional system itself is discardable, like out-of-fashion tricorn hats. As discussed in the book, a new generation of Jacobins is rising on the American left, challenging our constitutional traditions. Commentator Jennifer Szalai has denounced what she called “Constitution worship” and argued that “Americans have long assumed that the Constitution could save us. A growing chorus now wonders whether we need to be saved from it.”

That chorus includes establishment figures such as Erwin Chemerinsky, dean of the Berkeley Law School and author of “No Democracy Lasts Forever: How the Constitution Threatens the United States.”

Other law professors, such as Ryan D. Doerfler of Harvard and Samuel Moyn of Yale, have called for the nation to “reclaim America from constitutionalism.”

That “reclamation” is easier if our rights are based not in natural law, but rather in the evolving priorities of lawmakers like Kaine. Protections then become not the manifestations of human rights, but of rights invented by humans.

Kaine’s view — that advocates of natural law are no different from mullahs applying Sharia law — is not just ill-informed but would have been considered by the founders as constitutionally blasphemous.

He is, regrettably, the embodiment of a new crisis of faith in the foundations of our republic on the very eve of its 250th anniversary. This is a crisis of faith not just in our Constitution, but in each other as human beings “endowed by their Creator with certain unalienable Rights.”

Jonathan Turley is the Shapiro professor of public interest law at George Washington University and a best-selling author whose forthcoming“Rage and the Republic: The Unfinished Story of the American Revolution” explores the foundations and the future of American democracy.

Tyler Durden Tue, 09/09/2025 - 10:25

BLS About To Announce Another Huge Payrolls Revision: Here's What To Expect

Two weeks after we first warned readers to "Brace For Another Huge Negative Payrolls Revision, Greenlighting A 50bps September Rate Cut", first Bloomberg and then Reuters... 

And Reuters https://t.co/ADGIR3IOvF pic.twitter.com/AOEweJ2TbP

— zerohedge (@zerohedge) September 9, 2025

... both jumped on the bandwagon.

So for those who did not read our long-form preview of what to expect today at 10am ET - in a nutshell one should expect another huge negative revision to benchmark jobs, potentially as big as 1 million which would make it the biggest on record - here courtesy of Newsquawk is a quick and dirty primer on what to expect.

The BLS will release the preliminary 2025 benchmark revisions to the establishment survey at 10:00EDT on September 9th, 2025.

The final revisions will follow in February 2026, alongside the January employment situation report. Each year, establishment survey estimates are benchmarked to comprehensive counts of employment from the Quarterly Census of Employment and Wages (QCEW) for the month of March, derived from state unemployment insurance (Ul) tax records that nearly all employers are required to file. Bank of America notes that the preliminary estimate is based on QCEW data covering April 2024-March 2025. Importantly, the September release will provide only the implied revision to the March 2025 level of payrolls, with no historical data yet updated.

The Bloomberg consensus shows analysts expected a print of -682k, with estimates ranging between -250k and -900k. For context, the March 2024 nonfarm employment level was ultimately revised down by -598k in the final benchmark, compared with a preliminary estimate of-818k. Meanwhile, Fed Governor Waller warned he expects the prelim revisions will show that monthly job creation will be reduced by an average of 60k a month, indicating a 720k downward revision on an annualized basis.

Bank of America expects a downward revision of 500k to 1mln, implying that payrolls as of March 2025 may have been overstated by 40k-85k per month on average over the April 2024-March 2025 period. BofA also highlights that revisions for April-December 2025, which matter most for the Fed, will only be available with the final benchmark in February 2026.

* * * 

As described in late August, ZeroHedge certainly expects another major negative revision, potentially as large as 1 million..

... which the Trump admin will blame the Obama admin on as part of the ongoing kitchen sinking effort to realign jobs far lower to greenlight a major rate cut by Powell...

And here's the confirmation of the kitchen sink https://t.co/X9uhYmeC8C pic.twitter.com/dmkRfNQFhX

— zerohedge (@zerohedge) September 9, 2025

... only to reboot the labor market some time in November at which point jobs will start ramping higher ahead of the 2026 midterms. 

Tyler Durden Tue, 09/09/2025 - 09:54

Sacre Bleu Monday

By Michael Every of Rabobank

As expected, the French government collapsed yesterday, leaving the country in political chaos just as it needs to deal with massive economic and national security challenges. President Macron has ruled out a snap election. (See here for our pre-confidence vote take.)

As is the way of markets --albeit helped by directionality from the US-- French bond yields were lower on the day. However, markets and realpolitik have not communicated in recent years: is the second largest economy in Europe, and the only one with a nuclear trifecta, looking unable to deal with its fiscal deficit, and perhaps ungovernable, something that can be easily shrugged off?

Le Figaro English recently noted: ‘“Prices Have Literally Exploded”: Have French Restaurateurs Been Too Gluttonous for Their Own Good?”, noting “Empty terraces, silent dining rooms… Despite the heatwave, this summer has been a cold shower for restaurateurs. While the tourist season is in full swing, cafés, bistros and traditional inns are being shunned by the French.” Is this not perhaps tiptoeing towards ‘Let them eat cake’ territory?

Now ex-French PM Bayrou warned just before losing the vote, “Don’t become the UK”, and there the mood remains febrile regardless of Labour’s huge parliamentary majority. The anti-Labour Daily Mail notes ‘Desperate Starmer accused of the 'mother of all stitch-ups' and trying to 'fix' Labour's deputy leadership contest by giving hopefuls just THREE DAYS to get the backing of 80 MPs’. The pro-Labour Guardian says: ‘Revealed: how Boris Johnson traded PM contacts for global business deals’ (Guardian), including being paid £240,000 just after meeting Venezuelan President Maduro last year. Perhaps unsurprisingly, the anti-establishment Reform Party continues to sit at the top of all opinion polls.

In the US, the Wall Street Journal reports that the ‘White House Prepares Report Critical of Statistics Agency’ and ‘The Renewed Bid to End Quarterly Earnings Reports’. What, no data and no quarterly higher/lower-than games? What is a capitalist to do?! Innovate and invest in physical capital? But who wants to do that when there are assets to speculate on?

Moreover, US Treasury Secretary Bessent threatened to punch FHFA Director Pulte in the face, with additional expletives. That likely burgeoned his reputation in some circles: the man who as a young trader broke the Bank of England for Soros in 1992 arguably now wants to break the international financial architecture, and in the US’ favour. While many in DM who don’t see it, those in EM do – albeit in exaggerated form.

Putin advisor Kobyakov just stated: “The US is now trying to rewrite the rules of the gold and cryptocurrency markets. Remember the size of their debt - $35 trillion. These two sectors --crypto and gold-- are essentially alternatives to the traditional global currency system. Washington’s actions in this area clearly highlight one of its main goals: to urgently address the declining trust in the dollar. As in the 1930s and the 1970s, the US plans to solve its financial problems at the world’s expense, this time by pushing everyone into the “crypto cloud.” Over time, once part of the US national debt is placed into stablecoins, Washington will devalue that debt. Put simply: they have a $35 trillion currency debt, they’ll move it into the crypto cloud, devalue it, and start from scratch. That’s the reality for those who are so enthusiastic about crypto.”

We recently wrote about the geopolitical implications of dollar stablecoins, while most of the market seems to only focus on the ‘buy all the things’ aspect of them.

That said, yesterday’s BRICS virtual summit saw its members appear wary of exacerbating any trade wars with the US: although that geopolitical grouping criticised US policies, it steered clear of any direct attacks on President Trump. That’s following Chinese trade data yesterday that saw exports to the US slump 33% y-o-y but total exports still rise 4.4% - somebody is buying a whole lot more: shipments to the EU were up 10.4%, to ASEAN 22.5% and to Africa 26%. That’s either a lot of transshipment for the US to deal with or a lot of deindustrialisation everywhere else, with unhappy politicians to follow in short order.

Japan is also looking to find another new PM who can deal with a similarly fractious parliament and worrying geopolitical backdrop with public debt more than twice as high as France. That’s as China called Australia (and, by proxy, Japan?) a “geopolitical puppet” for holding a security meeting with the Japanese alongside the recent military parade in Beijing.

More importantly, it’s as reports have it that the looming update to the US National Defence Strategy will see a focus on the homeland and the Western Hemisphere (read: the Monroe Doctrine) rather than a pivot from Europe to Asia.

If you are in Asia, get ready to be told to spend 5% of GDP on defence like Europe has: how you then finance that is your business, but you will be financing the new US factories that build the weapons you will be buying to defend yourself with. That’s as Indonesian President Prabowo removed his finance minister after street protests, risking more turmoil for that G20 economy, while Thailand’s new PM and finance minister --with a fiscal deficit of nearly 6% of GDP-- are seeing tourism groups call for cash coupons to be given to foreign visitors to spend in the hopes of boosting the economy. That’s how well things are going.

If you are working against US interests in Latin America, the tail risks are larger. Not only did the US recently blow up a Venezuelan drug-trafficking vessel in international waters, send a Naval flotilla there, and base 10 F-35 jets in Puerto Rico, but there are reports the White House is considering military strikes on narcotics facilities inside Venezuela. Which just happens to be a Russian, Chinese, and Iranian ally and very oil rich.

Not too far away, Argentina’s pro-US President Milei saw his party suffer a notable local election defeat in Buenos Aires, which unlike in Europe led to a real slump in both the peso and Argentinean bonds. In short, while DM might now look and act a lot more like EM, they can still get away with legacy DM FX and bond pricing… for now at least.

Indeed, while DM don’t really think about it, “because DM”, gold is at a fresh all-time high even as US yields decline. That’s as close to a “Down with this sort of thing” protest as you are going to get.

But back in the world of financial market commentary, Bloomberg, which neatly summarizes all its stories with AI, sees Shuli Ren recommend that due to AI rapidly replacing white collar jobs ahead, the only way readers can now avoid becoming future “peasants” is by investing thematically in tech to try to stay ahead.

Why does “Dennis! There’s some lovely filth down here!” suddenly spring to my mind? And why does ‘Do You Hear the People Sing?’ from Les Misérables? Both fit a Sacré bleu Monday and thoughts of a New Order.

Tyler Durden Tue, 09/09/2025 - 09:45

Futures, Yields Rise Ahead Of Another Huge Payrolls Revision

Futures are higher led by Tech as expectations of Fed rate cuts continued to drive gains, while Treasuries eased after a rally that pushed global bonds into bull-market territory ahead of what is set to be another huge negative benchmark revision to payrolls. As of 8:30am S&P futures are 0.1% higher, while Nasdaq futures gain 0.2% as Mag7 stocks see a muted bid with AVGO/NVDA leading Semis higher. Both Cyclicals and Defensives have caught a bid with Materials buoyed by the Anglo / Teck deal. The yield curve is bear steepening as 10Y yield rise by 2bps to 4.07%; the dollar slid for a third day, with the yen driving advances among major currencies on renewed signals of policy tightening by the Bank of Japan. Commodities are higher with broad-based strength across all 3 complex but notable increases in crude, natgas, coffee, and iron. Today’s macro data focus is on the NFP revision with BBG survey seeing a 700k negative revision to payrolls and the modest beat in the NFIB Small Business Optimism (100.8, vs Exp. 100.5) where the Hiring sub-index has been a leading indicator for future NFP prints.

In premarket trading, Mag 7 stocks post modest gains (Nvidia +0.2%, Tesla +0.2%, Meta +0.4%, Microsoft +0.3%, Amazon -0.09%, Alphabet is flat, Apple -0.4%)..

• Atlassian Corp. (TEAM) rises 5% after announcing it is ending its data center product over the coming three years and will move customers to its cloud platform.
• Brighthouse Financial (BHF) is up 11% after the Financial Times reported that Aquarian Holdings is in late-stage talks with two Middle Eastern investors to finance a takeover of the life insurer.
• Fox Corp. (FOXA) falls 4% and News Corp. (NWSA) declines 4% after Rupert Murdoch and his children resolved a messy family feud with a settlement that gives favored son Lachlan Murdoch broad control and ensures Fox News and the rest of the sprawling media empire retains its conservative slant.
• Planet Labs (PL) is down 10% after after the company said it would offer $300 million of Convertible Senior Notes due 2030. The shares soared 48% in Monday’s regular session.
• Nano Dimension Ltd. (NNDM) rises 2% after initiating a review of strategic alternatives to maximize shareholder value and named David S. Stehlin as its new chief executive officer, replacing Ofir Baharav.
• Nebius (NBIS) jumps 54% after the AI-centric cloud platform company said it will provide Microsoft access to GPU infrastructure capacity at its new data center in Vineland, New Jersey, over five years.
• Sable Offshore (SOC) falls 9% following news that Governor Gavin Newsom seeks to impose further restrictions on California’s offshore oil industry, a setback to Sable and its controversial project off the coast of Santa Barbara County.
• Teck Resources Ltd.’s US-listed shares (TECK) climb 16% after Anglo American PLC agreed to acquire the Canadian miner for 1.3301 shares for each Teck share. Anglo will also pay its investors a $4.5 billion special dividend ahead of the combination. Anglo shares leaped 9.1% in London.
• UnitedHealth Group Inc. (UNH) rises 4% after saying it expects most of its Medicare Advantage members to be in highly rated plans that earn bonus payments next year, a boon for its health insurance business.

The S&P 500 and US bonds have been on a tear as traders increasingly stoked bets that the Fed will kick-off rate cuts this month. Despite clear cracks in the labor market, investors are wagering that the economy is still sufficiently robust to power corporate earnings. Swaps are pricing at least four quarter-point cuts by the time Fed Chair Jerome Powell’s term ends in May. Some are betting that this year’s easing cycle could begin with a jumbo half-point cut this month as job-market weakness outweighs lingering inflation concerns.

As we first discussed two weeks ago, Tuesday’s revisions to Bureau of Labor Statistics data for payrolls for the year through March are expected to reinforce the view of a US jobs slowdown. Later this week, the core consumer price index for August is projected to show an increase of 0.3% for a second month in a row, indicating that progress on reducing price pressures has stalled. 

The BLS figures “would be a big change in the job market narrative,” ING rates strategists Michiel Tukker and Benjamin Schroeder wrote in a note. This “could fuel questions of why the Fed shouldn’t cut by 50 basis points this month.”

“This is a supportive combination for equity markets,” said Marija Veitmane, senior multi-asset strategist at State Street Global Markets. “We believe that AI demand is still strong and will continue to support earnings in the sector, pushing returns in the sector — and hence overall equity market performance — higher.”

In Europe, the Stoxx 600 posted modest gains as investors looked out for the next steps in France’s battle to repair its finances. Anglo American Plc rallied more than 9% after agreeing to a tie-up with Canada’s Teck Resources Ltd. Bonds weakened across the board. In France, bonds were little changed as President Emmanuel Macron started his search for a premier capable of steering a budget through a deeply fractured National Assembly. The continued lack of common ground has weighed on sentiment, driving up the country’s risk premium.

“No one was expecting a bloodbath on the markets today, it’s clear that the worst-case scenario of snap elections is not taking place, at least right now,” said Vincent Juvyns, chief investment strategist at ING in Brussels. “So at the moment we’re muddling through, but with a spread with Germany that is at levels of the sovereign debt crisis of 2012.”

Earlier in the session, Asian equities advanced, as tech and Chinese property stocks climbed, and investors continued to eye prospects for interest rate cuts by the Federal Reserve. The MSCI Asia Pacific Index rose as much as 0.8% to the highest since February 2021, with TSMC, Alibaba and Tencent among the biggest boosts. Taiwan’s Taiex jumped more than 1% to a fresh record, and Korea’s Kospi touched a new high for the year. Indonesia led decliners after the nation’s finance minister was abruptly removed. “Further Fed rate cut bets are fueling positive sentiment in Asia today, especially in growth areas like tech that will rally in these conditions,” said Nick Twidale, chief market analyst at AT Global Markets in Sydney. “In the near term, we can push higher and test record levels for Asian stocks, but may see some profit-taking across all markets ahead of key US inflation data.” Indonesia’s Jakarta Composite Index slipped as fiscal concerns mounted after after President Prabowo Subianto replaced Sri Mulyani Indrawati as finance minister. While Purbaya Yudhi Sadewa, who is taking over the role, vowed to keep Indonesia fiscally healthy, Indrawati enjoyed widespread respect among global investors.

In FX, the Bloomberg Dollar Spot Index is down 0.2%. The Japanese yen rose 0.8% against the greenback, taking USD/JPY firmly below 147 after Bloomberg reported Bank of Japan officials are of the view that it may be possible to raise interest rates again this year regardless of domestic political instability. The Aussie dollar also outperforms, rising 0.4% as it benefits from higher iron ore prices.

In rates, treasuries declined, pushing US 10-year yields up 2 bps to 4.06%. Gilts and bunds are also in the red. French 10-year borrowing costs did rise above Italy’s for the first time, although this was down to technical reasons.

In commodities, Oil rose for a second day as investors weighed the prospect for softening demand after Saudi Arabia cut pricing for most of its grades. WTI crude futures rise 1% to near $62.90 a barrel. Spot gold is up almost $20 and flirting with a record. Iron ore climbed for a sixth day and headed for its highest close in more than six months on expectations that Chinese demand will gather momentum. Bitcoin rises 1% to around $113,000. 

Looking to the day ahead now, and data releases include French industrial production for July, the US NFIB small business optimism for August, and there’s the preliminary benchmark revision for US payrolls. From central banks, we’ll hear from the ECB’s Nagel and Villeroy, and BoE Deputy Governor Breeden.

Market Snapshot

• S&P 500 mini +0.1%
• Nasdaq 100 mini +0.2%
• Russell 2000 mini little changed
• Stoxx Europe 600 -0.1%
• DAX -0.5%
• CAC 40 little changed
• 10-year Treasury yield +2 basis points at 4.06%
• VIX +0.1 points at 15.2
• Bloomberg Dollar Index -0.2% at 1196.41
• euro little changed at $1.1765
• WTI crude +1.2% at $63/barrel

Top Overnight News

• The level of U.S. employment for the 12 months through March could be slashed by as many as one million jobs when the government publishes its preliminary nonfarm payrolls benchmark estimate on Tuesday. The payrolls benchmark revision would come on the heels of news last Friday that job growth almost stalled in August and the economy shed jobs in June for the first time in 4-1/2 years. It would suggest the labor market was already struggling before President Donald Trump's aggressive tariffs on imports. RTRS
• After two federal courts have found that many of the steep emergency tariffs imposed by Trump are illegal, if the Supreme Court rules that Trump did not have the authority to impose the tariffs, the U.S. government could be obligated to refund importers anywhere from $750 billion to $1 trillion, Treasury Secretary Scott Bessent warned. This could potentially place upward pressure on yields. CNBC
• South Korean companies have routinely used unsuitable visas for workers sent to the US to build multibillion dollar advanced manufacturing sites. The admission comes after dramatic raid last week by ICE at a battery plant being built by Hyundai and LG in Georgia, which led to the detention of 475 workers. White House officials warn more such immigration actions are being planned FT.
• The world’s biggest oil and gas companies are cutting jobs, slashing costs, and scaling back investments at the fastest pace since the coronavirus market collapse, as execs brace for a prolonged period of lower crude prices. FT
• Israel ordered Gaza City’s one million residents to leave in advance of a major military offensive. BBG
• US Senate Banking panel to vote on Miran's Fed nomination on September 10th: BBG
• White House is preparing a report critical on the Bureau of Labor Statistics: WSJ
• Taiwan’s exports hit a record $58.5 billion in August, surging more than 34% from a year ago, boosted by strong tech demand and the AI boom despite new US tariffs. BBG
• BOJ officials are of the view that it may be possible to raise the benchmark interest rate again this year regardless of domestic political instability, as economic conditions have developed in line with expectations. RTRS
• Officials in Europe are considering potential sanctions against China for buying Russian oil. FT
• A measure of France’s borrowing costs exceeded Italy’s for the first time in the euro zone’s history, signaling investor concerns. French PM Francois Bayrou will resign today. BBG

Trade/Tariffs

• Japan's trade negotiator Akazawa said US tariffs on Japanese goods, including cars, will be lowered by September 16th, according to Reuters citing a post on X. However, Akazawa later commented that tariff discussions with the US are not fully resolved and that Japan must ensure the trade deal is carried out.
• South Korea and the US are to resume working-level talks regarding tariffs, according to Yonhap
• South Korea's presidential adviser said US trade negotiations are being delayed due to the issue of FX market impacts from the USD 350bln package and have asked the US to help find a solution to the capital market impact, while they told the US that they can't agree on terms similar to Japan's USD 550bln deal.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed as the region failed to fully sustain the mildly positive handover from Wall St, with price action contained amid light fresh catalysts and as participants looked ahead to upcoming events, including inflation data scheduled in the next couple of days. ASX 200 was dragged lower with notable weakness in Energy, Industrials, Real Estate and Financials, with sentiment also not helped by a deterioration in consumer confidence and mixed business surveys. Nikkei 225 initially rallied above the 44,000 levels to print a fresh record high, but then gradually faded its gains as political uncertainty lingered. Hang Seng and Shanghai Comp were mixed with the Hong Kong benchmark led higher by outperformance in real estate and tech, with the former helped as China's MIIT pledged to accelerate breakthroughs in high-performance chip technology. Conversely, the mainland lagged amid lingering global frictions with EU officials reportedly discussing potential sanctions on China and other parties for the purchase of Russian energy, while Chinese President Xi recently took aim at a 'certain country' increasing trade war risks.

Top Asian News

• BoJ reportedly sees some chance of hiking this year, despite the political situation, via Bloomberg citing sources; likely to keep rates unchanged on September 19th. Sees steady progress towards the BoJ price target. Sees the US trade deal as removing some risks to growth. Some officials are even of the view that a hike could be appropriate as early as October.
• Reuters sources report that while political uncertainty in Japan will not derail the BoJ's normalisation plan, it could impact the timing of the next hike; add, "BoJ does not need to hike in the midst of turbulence". "no rush...as long as it gets another rate hike done possibly by early next year".
• Bank of Japan likely to slightly reduce purchases of super-long Japanese government bonds in Q4 2025, according to Reuters sources. BoJ to make final decision on 30 September, influenced by 20-year government bond auction on 17 September and market volatility in super-long JGB yields.
• China's Ministry of Industry and Information Technology said in a briefing that China is to accelerate breakthroughs in high-performance chip technology and will guide 10-gigabit optical networks from pilot testing to deployment.
• Japanese Finance Minister Kato said he will carefully consider the possibility when asked about entering the LDP leadership race, while he noted that Japan's economy is showing bright signs, but there is a need to support those suffering from rising prices, including food prices.
• Japanese LDP politician Kono reiterated that if the BoJ delays rate hikes, it would boost inflation, and noted they need to fix a weak yen, so the BoJ needs to hike rates, while he added that a sales tax cut would increase the deficit, and said he is 'sleeping on' whether to run for LDP leadership.

European bourses (STOXX 600 U/C) opened modestly firmer across the board, but now display a mixed picture, though with nothing really behind the slip in sentiment. European sectors opened with a strong positive bias, but as sentiment slipped, sectors are now mixed. Basic Resources tops the pile, boosted by gains in Anglo American (+10%); the Co. and Teck Resources (+10.3% pre-market) have merged to create a USD 50bln mining giant; the merger is expected to yield USD 800mln in annual synergies. Elsewhere, Banks and Media complete the top three; for the latter, UMG (+2.2%) boosts the sector after receiving a broker upgrade.

Top European News

• Barclays UK August Consumer Spending rose 0.5% Y/Y vs prev. 1.4% Y/Y increase in July.
• Newsquawk Analysis: French PM Bayrou lost, as expected. What next?

FX

• DXY edged higher through the European session shortly after printing session lows coming out of APAC hours, where for the most part DXY saw some relief from Monday's extension of post-NFP selling and as longer-dated US yields retreated. In terms of state-side news, the US Senate Banking panel is to vote on Miran's Fed nomination on September 10th, according to Bloomberg. Further, White House is preparing a report critical of the Bureau of Labor Statistics, according to WSJ. DXY resides in a 97.253-97.519 range.
• EUR moves at the whim of the buck following initial choppiness coming out of Asian hours. In France, PM Bayrou lost in a landslide as expected, while President Macron is to name a new PM in the coming days, which may come after the September 10th strikes. The OAT-Bund spreads pushed wider after Bayrou’s defeat, though EUR/USD held steady. EUR/USD trades in a 1.1744-1.1780 band.
• JPY firmed in European hours following source reports that the BoJ sees some chance of hiking this year, despite the political situation, via Bloomberg citing sources, but likely to keep rates unchanged on September 19th. Some officials are even of the view that a hike could be appropriate as early as October. Earlier sources via Reuters noted that while political uncertainty in Japan will not derail the BoJ's normalisation plan, it could impact the timing of the next hike: "BoJ does not need to hike in the midst of turbulence". USD/JPY fell under its 50 DMA (147.42) to a 146.56 trough from a 147.56 session high.
• GBP gained a firmer footing at the 1.3500 handle after G10 currencies generally took advantage of recent dollar selling, but with further upside limited amid light catalysts. Overnight, it was reported that UK Chancellor Reeves is to tell ministers to prioritise the fight against inflation in a Cabinet meeting today, according to FT, although this caused little immediate follow-through on exchange rates. GBP/USD resides in a 1.3544-1.3583 range, ahead of BoE's Breeden later.
• Antipodeans are holding the positive bias seen in APAC hours as the pairs are kept afloat after a firmer PBoC reference rate setting, but with gains capped following weaker Australian consumer sentiment and mixed business surveys.
• Norway's Labour Party government won re-election backed by four smaller parties, according to official results.

Fixed Income

• A slightly softer start to the session for USTs, but only modestly so. Specifics light as we look to the BLS NFP benchmark revision report, an Apple event and then 3yr supply. Into this and mentioned supply USTs find themselves a little heavy, towards the lower end of a 113-11 to 113-19 band.
• JGBs were on a gradual descent across the APAC session and into the European morning, initially in-fitting with the modest pullback seen in peers but then accelerating on fresh BoJ sources. Firstly, Reuters reported that political uncertainty will not derail the BoJ’s normalisation plan, but could impact the timing. However, this was followed by a Bloomberg source that the BoJ still sees some chance of hiking this year (markets imply 15bps of tightening by end-2025). Even more hawkishly, the source stated some officials are of the view that an October hike could be appropriate (+8bps implied by markets). The hawkish elements sent JGBs to a 136.73 trough, lower by near enough 50 ticks at worst.
• OATs kicked off the day near enough unchanged to Monday’s close. With a small bout of pressure seen into the close as the French confidence vote hit just minutes before. However, as expected, the price reaction for OATs themselves has been fairly muted, due to the fall of Bayrou being very much priced in. One nuance on the reaction, but only really evident in the spread, was the slightly worse than expected vote split for him, as not all of the central alliance voted ‘for’ Bayrou. A nuance that perhaps explained the modest jump up in the OAT-Bund 10yr spread to 83.38bps this morning, eclipsing the 82.19bps peak that printed when Bayrou announced the vote. If the move continues, we look to the YTD peak at 88bps and then the 2024 peak of 90bps.
• Bunds are softer, with the pressure of a comparable scale to that outlined in USTs above; pressure which came ahead of a double green line outing. The auction was fairly in-line and had limited impact on Bunds. At a 128.97 low, above Monday’s 128.91 base and towards the upper-end of Friday’s 128.51 to 129.20 band; i.e. similar price action to USTs, as outlined above.
• Gilts echo the above. Down to 91.31 at worst but well clear of Monday’s 91.09 base and, like with Bunds and USTs, towards the upper end of a 90.65 to 91.31 range. Specifics for the UK a little light, supply was well received and lifted Gilts off worst levels and to a marginal new high at 91.48; though, the benchmark still languishes in the red by just under 10 ticks. That aside, we await a speech from Chancellor Reeves in the later part of the morning.

Commodities

• Crude edges higher in rangebound trade after the prior day's fluctuations, whereby early gains due to OPEC+ and geopolitics were trimmed after Saudi Arabia lowered premiums for OSPs to Asia and North-West Europe. WTI currently resides in a 62.37-63.16/bbl range while Brent sits in a USD 66.12-66.94/bbl range.
• Precious metals are relatively rangebound trade amid light catalysts and head of risk events, with attention now on data releases, including the BLS prelim. benchmark revisions are scheduled today, followed by PPI on Wednesday and CPI on Thursday. Spot gold currently resides in a USD 3,628.48-3,659.43/oz after printing fresh record highs yet again.
• Base metals lack firm direction with the price action contained within a tight range after the indecisive performance on Monday, and with newsflow light today. 3M LME copper resides in a USD 9,894.20-9,963.70 /t range at the time of writing.
• Iraq sets October Basra medium crude official selling price to Asia at USD 1.35/bbl premium to Dubai average; Selling price for Europe set at -USD 2/bbl versus Dated Brent; Selling price to North and South America at -USD 1/bbl versus ASCI.
• US Interior Secretary says they have the capacity to replace all Russian gas to Europe.
• HSBC expects "OPEC+ to start unwinding 1.65mbd voluntary cuts from October"; HSBC maintains USD 65/bbl Brent forecast from Q4, with rising downside risks from rising market surplus.

Geopolitics: Middle East

• Israel conducted strikes in the vicinity of Syria's Homs, Palmyra and Latakia cities.
• Downing Street spokesperson said Palestinian President Abbas welcomed UK PM Starmer's pledge to recognise a Palestinian state ahead of the UN General Assembly meeting later this month.
• "Iranian government: The regime's leadership will decide to withdraw from the Nuclear Non-Proliferation Treaty", via Al Arabiya.
• Iran-IAEA agreement likely at Cairo talks, according to Tasnim News.

Geopolitics: Ukraine

• Ukraine is at risk of a shortage of air defence weapons after a US DoD review of military aid resulted in slower deliveries, according to officials cited by FT.

Geopolitics: Other

• North Korea's leader Kim observed solid fuel engine tests and said it marks an important change to the nuclear force.
• Chinese President Xi sent congratulations to North Korea's Kim on the founding anniversary, while it was separately reported that President Xi said China is ready to enhance strategic communication and maintain close cooperation with North Korea for regional and world peace, and development, according to Xinhua.

US Event Calendar

• 6:00 am: Aug NFIB Small Business Optimism, est. 100.5, prior 100.3
• 10:00 am: Preliminary Benchmark Payrolls revision Exp -700K, Last -818K

DB's Jim Reid concludes the overnight wrap

The dominant theme in the markets over the past 24 hours has been the continued global bond rally. This has helped ease pressure on the latest French political crisis, which culminated last night in the government losing its confidence vote by 364 to 194. With the defeat having been widely anticipated, the market reaction was muted. But had the fixed income sell-off from earlier last week persisted, the outcome might have triggered a very different response.

According to President Macron’s office, he will nominate a new PM in the coming days. The new PM would then have to find a way to pass a budget for next year. With the far-right National Rally and the far-left France Unbowed calling for snap elections, this would likely require a PM that can keep the centre-left Socialists from voting against the budget, as well as keeping the current centre-right coalition on board. Yesterday’s result implied some cracks within the latter, with the 194 votes for the outgoing government being less than the 210 if all of Bayrou’s allies had voted in favour. Still, the overall sense is that both the centre-right and centre-left face incentives to avoid snap elections, and 10yr OAT-Bund spreads tightened slightly (-2.0bps) ahead of yesterday‘s vote. In a note last night, our economists discuss the key next steps to watch, including on the upcoming budget process (see here). There will be a lot of noise around France over the next few days as tomorrow brings a social media launched day of nationwide protest aimed at bringing the country to a standstill, Friday brings an update from Fitch, and a week on Thursday we have a union-organised day of regional and national strikes. So, a lot going on. 

Looking at the fixed income moves in detail, bonds gained across Europe with yields on 10yr bunds (-1.9ps), OATs (-4.0bps), BTPs (-3.3bps) and Gilts (-4.0bps) all moving lower. Treasury yields also moved lower across the curve, with the 2yr yield (-2.3bps) down to its lowest since September 2022, at just 3.49%. The 30yr Treasury yield (-6.7bps) hit a 4-month low of 4.69%. So that helped ease fears about the fiscal situation and means we’re a long way from where things stood last Wednesday, back when the 30yr yield was just a whisker beneath 5%.

The main driver was a continuation of the sentiment post payrolls with increasing confidence of rate cuts dominating the landscape. It's almost as if CPI on Thursday doesn't matter. On inflation, the NY Fed 1-yr inflation expectation series inched up from 3.1% to 3.2% yesterday. However, the consumer expectation series showed that expectations of finding a new job fell to its lowest reading since that series began back in 2013. So that chimed with Friday’s jobs report, where the unemployment rate hit its highest in nearly 4 years, at 4.3%.

All that led to mounting confidence that the Fed would soon be cutting rates, with a growing probability placed on back-to-back rate cuts at the remaining three meetings this year. Indeed, the amount of cuts priced by December’s meeting went up +3.0bps on the day to 72bps by the close. So that would be just shy of the 75bps required to fully price in a rate cut at each meeting, and it’s the most rate cuts priced for 2025 since early May, back when there were still genuine recession fears swirling in the aftermath of Liberation Day. Another beneficiary were gold prices (+1.37%), as the prospect of more rate cuts saw them surge to a fresh record of $3,636/oz. It's up a further +0.34% higher overnight.  

This narrative of labor market weakness could well get further support today, as the Bureau of Labor Statistics are releasing their preliminary benchmark revision for payrolls at 10:00 Eastern Time. Basically, they do a big revision of the payroll numbers each year to benchmark it against the Quarterly Census of Employment and Wages (QCEW). And although the final numbers don’t get published until March 2026, they announce the preliminary revisions beforehand, which will give us a better sense of how those are likely to move. In terms of today’s announcement, our US economists write that the latest QCEW from Q4 2024 suggests that the average monthly payroll gains over April 2024-March 2025 could be revised down by roughly 50-60k, from a starting point of 146k. So that would imply a lot less momentum in the labour market in the period running up to Liberation Day. But bear in mind this revision only goes up to March 2025, so whatever happens today, it isn’t going to add to our sense of where the labour market is right now. Note that Bessent suggested the annual revision might be around 800k, when speaking over the weekend. This averages 66.6k per month if his number is to be taken literally rather than just an approximate level for the press. 

For equities, the rate cutting narrative outweighed fears about an economic slowdown. So that led to a decent advance on both sides of the Atlantic, with the S&P 500 (+0.21%) closing less than a tenth of a percent from its record high, while the NASDAQ (+0.45%) hit a record high of its own. That said, defensive sectors struggled, leaving the equal-weighted S&P 500 (-0.04%) marginally lower. Meanwhile in Europe, the STOXX 600 (+0.52%) moved higher, and France’s CAC 40 (+0.78%) put in a decent performance too ahead of the result of the confidence vote.

Asian equity markets are mostly higher this morning. Across the region, the KOSPI (+1.11%) is leading gains, rallying for the sixth day, while the Hang Seng (+0.80%) is also trading notably higher, hitting its highest level since late 2021 despite paring gains above 1.5% earlier. Meanwhile, the Nikkei (+0.11%) has also surrendered larger gains, dropping over a percentage point from its morning highs. Elsewhere, the S&P/ASX 200 (-0.60%), the CSI (-0.41%) and the Shanghai Composite (-0.30%) are bucking the regional trend. S&P 500 (+0.14%) and NASDAQ 100 (+0.17%) futures are trading slightly higher.

To the day ahead now, and data releases include French industrial production for July, the US NFIB small business optimism for August, and there’s the preliminary benchmark revision for US payrolls. From central banks, we’ll hear from the ECB’s Nagel and Villeroy, and BoE Deputy Governor Breeden.

Tyler Durden Tue, 09/09/2025 - 08:36

Lacalle: The Fed Caused High Inflation And The Current Jobs Slump

Authored by Daniel Lacalle,

Both the recent spike in inflation and the current decline in US jobs are, in a very significant way, the fault of the Federal Reserve.

The Fed’s policies since 2021 reveal a nightmare “pendulum” effect: first, easy money and historic liquidity expansion fueled runaway inflation; then, rapid rate hikes hurt businesses and families as well as job creation, especially for small and medium-sized businesses and families.

In 2021, the largest monetary expansion in decades caused an inflationary burst that was particularly negative for wage earners and small businesses. A massive rate hike exacerbated this negative impact.

The August jobs report exposes the Fed’s failure to balance its mandate. The Federal Reserve did not seem to read their own beige book that warned of a widespread job market weakness for months.

The Federal Reserve’s Beige Book first alerted of a weak job market in April 2025 and continued to highlight the labor market challenges in May and June. The April Beige Book signalled flat economic activity and slow labor demand and highlighted weakness for new entrants such as graduates, with some regions noting slight declines in employment and business activity. However, despite the evident negative impact of high rates, the Fed decided to keep interest rates unchanged even when inflationary pressures proved to be nonexistent. Between April and July, CPI inflation and core CPI monthly figures showed no inflationary pressures from tariffs.

Only 22,000 jobs were created in August. Although the headline shows the weakest number since the pandemic recovery began, we must also consider that the figure includes a reduction in government jobs of 15,000. Reducing government jobs is essential for economic recovery, and in 2025, we experienced a cut of 97,000 jobs, while the period from 2021 to 2024 saw monthly increases of 50,000 government jobs. The unemployment rate increased to 4.3%, which is a small rise compared to Canada’s 6.9% and the euro area’s 6.2%, but it is concerning because this increase was unnecessary.

The private sector—the real engine of growth—is bearing the brunt of high interest rates.

 Claudio Borio of the BIS, as well as Congdon and Castaneda, have proven that the explosion of inflation from 2021 to 2023 was clearly tied to unprecedented monetary growth driven by government spending and Fed easing. The Fed’s loose policy, with ultra-low rates and trillions in asset purchases, led to a surge in the money supply far outpacing real economic activity. As Borio has shown, in high-inflation environments, there is a clear link between rapid money supply growth and price spikes. The key driver of the inflation burst came not from supply chain issues but from massive, coordinated monetary expansion and deficit monetisation.

Once inflation took hold, the Fed responded with rapid and significant rate hikes, pushing interest rates well above the estimated “neutral” rate. Studies show that for every 100-basis-point increase above the neutral rate, job growth among small and medium enterprises (SMEs) falls by 0.5 to 1.5 percentage points. SMEs, which lack the market power of large firms, are especially vulnerable: higher borrowing costs force many to freeze hiring, lay off workers, or even shut down. High rates have resulted in the loss of tens of thousands of SME jobs over the past year. The government remained unaffected by inflation and rate hikes. The Biden administration continued to increase government spending, the deficit, and public sector jobs while small and medium-sized enterprises (SMEs) were experiencing the dual negative effects of inflation and interest rate hikes. This was a clear case of crowding out of the private sector.

For families, high rates drive up mortgage, credit card, and car loan payments, squeezing a large proportion of US households who rely on borrowing for everyday needs. Consumption, which makes up 70% of US GDP, has visibly suffered as real disposable incomes have failed to keep pace with higher prices and debt service costs.

Double Shock: How the Fed Made the Jobs Slump

By acting too late against inflation and then maintaining overly restrictive rates even as the labor market slowed, the Fed has delivered a “double shock” to working Americans.

First, loose policy eroded purchasing power and savings through inflation; then, aggressive tightening stifled borrowing, spending, and job growth, especially for those least able to adjust—families and small businesses.

The entire burden of monetary correction was placed on the private sector. Rather than creating a smooth transition, the Fed shifted the burden of addressing inflation onto households and small and medium-sized enterprises. With real wage gains evaporated by high interest expenses and job creation weakening, the policy response continues to weigh on the very sectors most vital for broad-based prosperity.

The story of US monetary policy since 2021 is a sequence of brutal errors. First, the Fed stoked the inflation fire with excessive liquidity; now, it risks deepening the jobs crisis by keeping rates unnecessarily high.

The consequences are clear: destroyed SME jobs, weaker family finances, and an economy stuck in a cycle of uncertainty and lost opportunity.

Thankfully, supply-side policies, tax cuts, and deregulation are keeping the economy alive. It is time for the Fed to stop hurting Americans.

Tyler Durden Tue, 09/09/2025 - 08:05

Anglo American, Teck Resources Mega-Deal Will Create "Compelling, Large-Scale Copper Business" 

Anglo American and Teck Resources have agreed to merge in an all-share transaction to create "Anglo Teck," a Canada-based miner set to become one of the world's top five copper producers. The deal marks the largest mining M&A transaction in more than a decade and comes amid a global scramble for rare earth minerals, driven by data center buildouts, power grid upgrades, electric vehicles, and other electrification trends. 

Under the proposed mega-merger, Anglo shareholders will hold 62.4% of Anglo Teck, while Teck investors will own 37.6%. The combined company is expected to produce about 1.2 million metric tons of copper annually, driven by Anglo's 770,000-ton output and Teck's 545,000 tons.

The deal comes as copper demand rises on the back of global electrification trends, including data center buildouts, the proliferation of EVs, and widespread power grid upgrades to handle the explosion in demand. 

At a press conference, Anglo CEO Duncan Wanblad told reporters: "We will have a stronger, more resilient financial platform with scale advantages, including greater flexibility to reallocate capital dynamically to the highest returning opportunities."

Additional color on the Anglo Teck mega deal:

• Copper Exposure: The new company is expected to derive 70% or more of its revenues from copper, with an annual output forecast to rise from 1.2 million tons to 1.35 million tons by 2027.

• Synergies: Management projects $800M in recurring annual pre-tax savings by year 4, plus $1.4B in EBITDA uplift from integrating the adjacent Collahuasi and Quebrada Blanca mines in Chile, resulting in 175kt of additional copper production annually from 2030 to 2049.

• Portfolio: Anglo Teck combines six world-class copper assets with Anglo's premium iron ore business in South Africa and Brazil, Teck's zinc operations in Canada and Alaska, and crop nutrient projects in the UK.

• Listings & Governance: Anglo Teck will be headquartered in Vancouver, with a primary listing on the LSE and secondary listings on the JSE, TSX, and NYSE. Duncan Wanblad (Anglo) will serve as CEO, Teck's Jonathan Price as deputy CEO, and Sheila Murray as chair. The board will be split evenly.

• Timeline: The boards unanimously support the deal, with completion targeted in 12–18 months, subject to shareholder and regulatory approvals.

Berenberg analysts Richard Hatch and William Dalby told clients earlier, "The combination will result in a compelling, large-scale copper business, we think, with zinc and iron ore exposure, too." 

Anglo American's London shares jumped the most in 17 months, up nearly 10% by late morning in Europe. U.S.-listed Teck shares were up 14% in premarket trading. 

Berenberg analysts noted that Glencore could emerge as a rival bidder but said cultural differences would likely pose a major hurdle. They added that BHP may also show interest, given the scale Teck could bring to its copper business.

"A bidding war could ensue," the Jefferies analysts told clients. 

Tyler Durden Tue, 09/09/2025 - 07:45

Don't UK The USA

Authored by Kurt Schlichter via Townhall.com,

Woe to the British, particularly the British who are actually British and are today being forced by their ruling class to be unwilling cattle subject to the unrestrained exploitation, looting, and raping of the Third World barbarians their betters imported. There’s a lot of raping going on, and the real problem seems to be that normal British people don’t want their daughters raped. But their rulers do; it’s reasonable to assume that you want the foreseeable consequences of your actions. Recently, when one girl pulled a knife on some scumbag who was trying to molest her, someone got arrested. You’re not going to be surprised to find that it was the girl who was defending herself and her sister.

Britain is now a classic anarcho-tyranny, where the catspaws of the ruling class are free to pillage and abuse while the full weight of the once legitimate government comes down on those who would protest or resist.

Raise the flag of your own country?

That’s a hate crime but fly high the pride and Palestinian banners.

Don’t get your hopes up about the British people casting off their chains anytime soon, because I’m sorry to say it’s not going to happen.

And there are a lot of reasons for it, reasons we should understand here in America to avoid the UK’s sorry fate of tumbling down the slippery slope into nanny state fascism with sensible shoes, crushing its subjects’ faces forever.

I use the term “subjects” because that’s what they are, not citizens, not men. A subject is subject to the will of others. A citizen is subject to his own will while also participating as an equal member of the polity. In Britain, the idea of being a subject is firmly ingrained because it is a monarchy, even though the monarch is a neutered, doddering buffoon who was the shame of his hard-as-nails mother. But again, the British accept this. They don’t have to be a monarchy. They could be a republic, but they don’t want to be for whatever reason. The idea of royalty is remarkably silly, but you need to understand that there are actually people out there who yearn to be ruled, who want to be subjects. Being a citizen is hard. It requires many things of you. But being a subject is easy. It requires only your obedience.

Don’t even get me started on how these geeks presume to legislate what Americans can and can’t say online.

We won’t take it, but their own people seem cool with it. They shouldn’t be.

Now, it’s easy to say – and accurate to say – there’s not going to be any British civil war because the British were dumb enough to give up their guns.

You should never give up your guns. You cannot be a citizen if you don’t have guns. If the citizens don’t have the means to commit violence in the defense of life and liberty, then they are mere subjects. The British gave up their guns in exchange for security. Of course, they have none. And now that their government – the entire government, including the alleged Conservative Party – has turned openly against them, they have no real remedy. In America, we still have a remedy, should it become necessary. I wrote about it in detail in my new novel, American Apocalypse: The Second American Civil War. It is the indisputable right of a citizenry to remove an oppressive government that chronically, systemically, and irrevocably violates the civil rights endowed in us by our Creator (Yeah, rights come from God, Tim Kaine). That’s as true today as it was in 1776, when the British tried that crap over here and we shot them. Remember, the proper unit of measurement of freedom is the caliber. I will also accept millimeters, as in 5.56, 7.62, 9, and 10, as well as gauge, as in 12.

But of course, as my novel explains, securing freedom from a dictatorship is not as simple as just going to your gun safe(s) and choosing one of your many, many freedom sticks. Having guns is just the threshold qualification for proactively securing your freedom. You also need leaders. And that’s where we get to the class dynamics of Britain. The lower classes, the workers, the very Brits the British ruling class holds in such contempt, have never led themselves. They were always led by some rich toff who went to Oxford. This noblesse oblige vibe meant that the ruling class, while holding the dirty peasants in condescending contempt, also attempted to take care of them. And the posh boys stood with them when things got stabby; the Zulus at Isandlwana cut down highfalutin’ officers and rank-and-file alike, and nobody ran.

But now the ruling class has decided to let its contempt flag fly. It hates its own people, and that’s a uniparty party thing. Labor, Conservative, it doesn’t matter. Those are just labels. There’s one party, the uniparty, and they all agree on everything from the climate hoax to the need to import endless foreigners to the need to suppress the voices of the peasants. They went to the same schools, eat at the same clubs, and engage in the same bizarre kinks.

The peasants should be revolting, but there’s no one to lead them. If a nail rises up, it gets pounded down. Open your mouth and the English Gestapo is there. Giant rape gang that molests hundreds of girls for years? Now, that’s not interesting. But there’s a guy in Brighton who said that maybe we should turn off the tap of Third World invaders. Better get the bobbies rolling; it’s not going to be a problem getting a conviction when all the judges all agree on the desperate need to suppress any alternative viewpoints as subversive. The dual-track justice system, where normal Brits are punished mercilessly while foreign barbarians are free to indulge in their barbarity, will help keep those in power in power.

And the British people will go along with it, because this is how these things go. When you capture the institutions, gut them, and wear them as a skin suit, you get respect for a while. This isn’t the free Great Britain of Margaret Thatcher or Winston Churchill. This is a scummy little dictatorship wearing what was once a legitimate government as a pelt.

The working-class British have the numbers, but they lack organization. And it’s not clear that they have the willingness to make the sacrifices required to be free once again. They’d have to get off their couches, turn off the telly, skip the Eurovision Song Contest, and risk economic deprivation, cultural isolation, and potentially prison. Moreover, if it gets serious and they become a real danger to the regime, look for the ruling class to turn the military on them and kill its way to power forever. You don’t think it would ever come to that? Have you not been watching? Do you not understand how these Western leftists hate their own people?

America could go this way, but there are challenges our ruling class faces that the inbred twits of Old Blighty don’t. Yes, we have guns. Yes, we have the mindset that we’re citizens and that we don’t default to somebody simply because he’s a pale hemophiliac with a decaying castle and a legacy of 30 generations of Cambridge graduates who styles himself Dimsdale Poofknocker-Ween VII, Arch-Baron of Bumtouch-on-the-Grumpy.

There are also geographic factors. America is big enough that it incorporates significantly different regions, some of which are much more ornery than others. We patriots have the presidency now, but even if we didn’t, federalism means there are complete state governments that align with freedom, providing a safe haven for liberty. And on a practical matter, it would be hard to conduct systemic, comprehensive oppression because we have so many different law enforcement agencies, as opposed to effectively just one in Britain. Yeah, please go out and tell the sheriff in some Texas Hill Country county that he’s got to collect up everybody’s AR-15s and see how that goes for you. He doesn’t work for DC; he works for the people he grew up with and lives with. Oh, and having a written constitution helps. Britain’s constitution appears to be whatever the ruling class wants it to be at a given moment. Think of Calvinball, except Brit Calvin has bad teeth and likes to tie up Hobbes.

Now, with Britain becoming something new and much, much worse, we Americans need to ask ourselves whether we want to maintain our special relationship. It worked out very well in the past when the UK had a real military and could actually contribute something to the defense of the West. But now, we need to ask ourselves a question. What’s in it for us? Why is the UK 2.0 worthy of a special relationship with us if its own people can’t speak or live freely, if its ruling class is destroying the country, and if no child is safe? I don’t want to be in a special relationship with the nation-state equivalent of the Lincoln Project.

It’s sad, but what happens to Britain is not up to us. It’s up to the British. But what is up to us is what we do here in our own country.

And what we must do now is double down on being citizens instead of subjects.

Speak freely and forthrightly.

Demand every single right to which you were endowed by our Creator.

Reject the dual-track justice system and anarcho-tyranny that the Democrats would impose. But, most of all, make sure you have laid the foundation requirement for freedom – buy guns and ammunition.

Tyler Durden Tue, 09/09/2025 - 07:20