Amid an absence of data to sway their minds one way (or another), it was hardly a surprise that Fed Chair Powell and his pals proceeded down the dovish/easing path once again today, following the market (and President Trump’s) lead.

So what will Powell say?

As a reminder, in its preview, Goldman wrote that while the bank does not expect any formal guidance about the December meeting, if Chair Powell is asked, he will likely be comfortable referencing the September dots, which imply a third cut in December; although will likely make reference to the fact they are flying somewhat blind in the absence of macro data… It’s hard to be data-dependent when there’s no data.

There will also be questions about the end of QT, while Powell will likely address by referencing the recent jump in SOFR rates indicated money market liquidity is turning “scarce” although Powell will hardly use that word. If he does: watch out.

One question that has emerged is whether Schmid’s hawkish dissent will embolden Powell to be more hawkish than the market expects and rugpull the market’s December rate cut expectations. 

Watch the live press conference here (due to start at 1430ET):

In our preview we said that the Fed would cut 25bps and end QT… and that’s precisely what happened.

*  *  *

First, a quick preview of how we got here: 

Since the last FOMC meeting (on Sept 17th), Gold has dramatically outperformed across asset-classes (even with its recent plunge) followed by US equities. Oil prices have tumbled the most while the dollar and bonds have risen in value. Bitcoin is basically unchanged since the last FOMC meeting, having collapsed after reaching record highs intramonth…

The market has grown more dovish since the last Fed meeting, now fully pricing in a 25bps cut today (and is almost certain that December will see another 25bps cut)…

More notably, rate-cut expectations have barely changed since the last FOMC with 46bps of cuts priced in for 2025 and 69bps more priced in for 2026…

Finally, before we get to the meat and potatoes of today’s statement, we note that Goldman Sachs models show monetary policy at its most dovish in years…

And bear in mind that financial conditions have never been ‘easier’…

So as we detailed in the FOMC preview, the two main questions for traders today is:

1) will the statement/presser provide support for the market’s current dovish future take (given the market’s anticipation of a 25bps cut, Goldman notes that it would likely be a high bar for the FOMC to change its plan on the basis of alternative data, and in any case the data have not given them any reason to), and,

2) will Powell officially announce the end of QT, as we discussed extensively in recent weeks (here and here), as a result of deteriorating conditions in money markets, the Fed is expected to announce changes to its balance sheet program. Fed Chair Powell suggested that the level of reserves will likely hit an ample level within a couple of months, although as we highlighted, the combination of reserves and reverse repos is now the lowest it has been since 2020 resulting in a creeping increase in the SOFR rate.

Meanwhile, usage of the Fedʼs repo facility has picked up, suggesting that some participants may be growing tighter on cash.

With that in mind, here are the key headlines from the FOMC Statement:

• The FOMC cut the federal funds rate target range by 25 bps to 3.75%-4.00%, as expected.
   
• The vote was 10-2, with two opposing dissenters (see below).
   
• The Fed announced that QT (aka the run-off of Treasury securities from the Fed’s balance sheet currently capped at $5 billion per month) would conclude on December 1, as also became consensus in recent days as a result of turmoil in funding markets.
   
• There were twp dissenting votes, one from Fed Governor Stephen Miran in favor of a 50-bps cut, and one from Jeffrey Schmid, who voted for no rate cut.

• The Fed statement maintains description of the labor market, noting that “job gains have slowed, and the unemployment rate has edged up but remained low through August,” adding “more recent indicators are consistent with these developments” and “downside risks to employment rose in recent months”

Here is a statement redline…

… where the key highlights are the following:

• Replacing that economic activity has “moderated” with “expanding at a moderate pace”, which is actually a bullish revision.
• Noting that while job gains have slowed “this year“, the unemployment rate has edged up but “remained” low and added that “through August, more recent indicators are consistent with these developments.”
• On inflation, the Fed added that inflation has moved up “since earlier this year” and remains somewhat elevated.
• On QT, the Fed said that the Committee “decided to conclude the reduction of its aggregate securities holdings on December 1“, which is a bit later than some had expected, as November had emerged as the target month for QT ending.

In its implementation note, the Fed clarified the details of how QT will end:

“Effective October 30, 2025, the Federal Open Market Committee directs the Desk to:

• Undertake open market operations as necessary to maintain the federal funds rate in a target range of 3-3/4 to 4 percent.
• Conduct standing overnight repurchase agreement operations with a minimum bid rate of 4.0 percent and with an aggregate operation limit of $500 billion.
• Conduct standing overnight reverse repurchase agreement operations at an offering rate of 3.75 percent and with a per-counterparty limit of $160 billion per day.
• Roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in October and November that exceeds a cap of $5 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap. Beginning on December 1, roll over at auction all principal payments from the Federal Reserve’s holdings of Treasury securities.
• Reinvest the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) received in October and November that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding. Beginning on December 1, reinvest all principal payments from the Federal Reserve’s holdings of agency securities into Treasury bills.
• Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons.”

Commenting on the statement, BBG rates strategist Ira Jersey was surprised by the “hawkish” dissent and adds that it “may change our opinion about the pace of cuts going forward, but there’s still little in the data to make us shift our opinion about the shape of the yield curve. There’s little in the statement or with the end of QT that’s likely to change the shape of the yield curve.”

Jersey continues: “The timing of the decision was a coin flip, and the committee erred on the side of caution. Runoff will continue in November, before the Fed enters ‘net neutral’ on December 1. MBS runoff will continue at current pace and be used to fund T-bill purchases, while Coupon Treasury runoff will be reinvested in full at auction.”

Schmid’s dissent prompted more questions, including this one from Renaissance macro’s Neil Dutta: “I don’t think it really matters. In a divided Fed the best you can do is string a bunch of 25s out. But, Schmid’s dissent looks more perplexing than Miran’s in my view. After all, Schmid supported a 25bper in September and since then, we have seen inflation come in weaker than expected.“

All we can say is Schmid better not have any outstanding mortgages. 

Tradestation strategy head David Russell points to the lack of data as a catalyst, but points out the growing dovish sentiment within the Fed which will only get stronger once Trump replaces Powell: “The Fed is grasping in the dark because of the shutdown, but the rate-cutting trend remains in place. Miran’s aggressive dissent is a reminder that change is coming at the Fed and the new chairman is likely to be more dovish.  The shutdown threatens to weigh on both jobs and consumption, so the bias toward easier policy may increase going forward.”

KPMG chief economist Diane Swonk told BBG TV that “we are going to see a lot of tension going forward because this is a really difficult time. One, we’re flying blind. Two, we’ve got inflation is up and unemployment is edging up as well, and the labor market is slowing. You add all of that together and you get this sort of stagflation width, which is what makes this Fed likely to have more dissents that go in both directions going forward.”

Meanwhile, former Fed vice-chair who currently works at Pimco Richard Clarida, noted that he expects “to see more of this in the remainder of Powell’s term for sure. If you just looked at the dots, you have a pretty divided committee in terms of the case for preemptive cuts from here, with inflation at 3%.”

Peter Boockvar at the Boock report goes one further and writes that while there was no real surprise, “the Schmid dissent makes me more confident that Jay Powell is going to push back on a December cut being the lay up the markets think it is.”

And while Schmid dissent was a bit of a surprise, the bulk of the statement was largely in line with expectations, and as a result stocks have barely budged…

.. while 10Y yields and the dollar are fractionally higher ahead of Powell’s presser which begins at 2:30pm.

Authored by Jill McLaughlin via The Epoch Times,

An aggressive monkey infected with COVID-19 and other diseases was on the loose in Jasper County, Mississippi, on Tuesday after a semi-truck carrying 21 primates overturned while transporting them from Tulane University to an out-of-state testing facility.

All 20 of the other infected rhesus monkeys were destroyed after the accident, according to the Jasper County Sheriff’s Department.

“We are continuing to look for the one monkey that is still on the loose,” the sheriff’s department reported on Facebook. “We have been in contact with an animal disposal company to help handle the situation.”

The monkeys weighed about 40 pounds each. They also carried hepatitis C, herpes, and COVID, but are not infectious, according to authorities.

The accident occurred at about 2 p.m. local time on Interstate 59 near mile marker 117, about 86 miles east of Jackson, Mississippi, near Heidelberg. The truck was headed to Florida, according to officials.

The sheriff’s department warned residents living around the area of the accident to not approach the monkeys.

“They do pose potential health threats and are aggressive,” the department posted.

The Mississippi Department of Wildlife, Fisheries, and Parks was on site with local law enforcement.

Tulane University was notified by authorities.

The university released a statement Tuesday night, saying the monkeys were not infectious.

“Non-human primates at the Tulane National Biomedical Research Center are provided to other research organizations to advance scientific discovery,” Tulane University said in a statement. “The primates in question belong to another entity and are not infectious.”

The sheriff’s office said the truck driver told authorities the monkeys were dangerous and posed a threat to humans.

“We took the appropriate actions after being given that information from the person transporting the monkeys,” the sheriff’s office said Tuesday night. “He also stated that you had to wear [personal protective equipment] to handle the monkeys.”

In 2020, the university received an anonymous $1 million gift to establish a fund for emerging research in infectious diseases. The money was meant to be used to support the institution’s research and provide immediate impact in the race to find a vaccine for COVID, according to the university’s school of medicine.

This is the second time research monkeys have escaped in the past year in the United States.

Late January saw the recapture of 43 monkeys that escaped from a South Carolina research facility. Residents were warned to secure their doors and windows until the monkeys were captured.

The animals broke loose from Alpha Genesis Primate Research Center in Yemassee, South Carolina. The last of them was recovered in January after living in the woods for two months. Rescuers tempted them back into captivity with peanut butter and jelly sandwiches, according to authorities.

The research facility—known locally as “the monkey farm”—breeds monkeys for medical research.

A sudden spike in internet disruptions has been reported across major websites and services, according to Downdetector. 

Users are reporting outages at Google, Amazon.com, AWS, Microsoft (Azure, 365, Store, Teams, Entra), the XBOX network, Comcast’s xfinity, Starbucks, and Alaska Airlines, to name a few. 

Microsoft announced they are investigating reports of issues with 365 services. 

According to reports there are ongoing outages at AWS’ US-East-1 region, and is possibly related to an Oct. 20 outage. Further confirmation is needed. 

Developing…

Authored by Kimberley Hayek via The Epoch Times,

Flight delays throughout the country could increase as more and more controllers call in sick over their first full missed paycheck due to the ongoing government shutdown, officials warned on Tuesday.

National Air Traffic Controllers Association (NATCA) President Nick Daniels also said that many air traffic controllers have temporarily taken on second jobs, citing living expenses such as housing, child care, food, and gas as their primary concerns. That number will increase the longer the shutdown continues, he said.

“This job is stressful enough,” Daniels said Tuesday at La Guardia International Airport in New York.

“We go to work day in and day out and make thousands of decisions. We do it five days a week. Most of us actually do it six and five is hard enough, and we do it in 10 hours a day. Now, you add in the fact that we had a partial paycheck already and we missed a full paycheck.”

The Federal Aviation Administration (FAA)—already short approximately 3,000 controllers who routinely work six-day, 10-hour shifts—has reported delays as a result of staffing gaps.

The FAA limits landings and takeoffs amid shortages, causing disruptions that last from 30 minutes to more than two hours long. Staffing shortages can even result in temporary ground stops.

Aviation data shows no sharp spike in overall delays, despite the government shutdown beginning Oct. 1.

Analytics firm Cirium determined that about 80 percent of flights at 14 major U.S. airports were on time this month, in line with historical patterns where approximately 20 percent of flights face delays longer than 15 minutes for various reasons.

Although a two-hour staffing-related ground stop at Los Angeles International Airport (LAX) on Sunday caused numerous delays, Cirium data shows 72 percent of LAX flights departed on schedule that day.

Though Duffy and Daniels shared concerns over the overburdened workforce of about 30,000 air traffic controllers, they downplayed the risk of a strike.

“Air traffic controllers have to have 100 percent of focus 100 percent of the time,” Daniels said.

“And I’m watching air traffic controllers going to work. I’m getting the stories. They’re worried about paying for medicine for their daughter. I got a message from a controller that said, ‘I’m running out of money. And if she doesn’t get the medicine she needs, she dies. That’s the end.’”

Controllers held demonstrations at 20 airports nationwide, distributing leaflets calling for an end to the shutdown.

“We’re talking to our coworkers about how to get zero-interest loans,” Mike Christine, National Air Traffic Controllers Association’s (NATCA) eastern regional vice president, told Reuters.

New York-area controller Joe Segretto said the situation makes an already tough situation more difficult for trainees in a high-pressure line of work. The shutdown has disrupted hiring and training, contributing to the ongoing staffing shortage. The systems used by air traffic controllers are also dated, as the Government Accountability Office (GAO) underscores broader risks from aging ATC systems and sluggish modernization efforts in the sector.

“The pressure is real,” Segretto said. “We have people trying to keep these airplanes safe. We have trainees—that are trying to learn a new job that is very fast-paced, very stressful, very complex—now having to worry about how they’re going to pay bills.”

Daniels echoed this in a statement posted to the NATCA website on Oct. 24.

“The shutdown is adding stress to air traffic controllers and their families,” he wrote.

Duffy also said that the shutdown, now in its 28th day, has led to students dropping out of the air traffic controller academy in Oklahoma City, adding that it will therefore be harder to close the staffing gap at airports. He said younger controllers might choose a different career path because they can’t go without pay.

“This shutdown is making it harder for me to accomplish those goals,” Duffy said.

Venezuela considers Trinidad and Tobago’s cooperation with the US military as the Trump White House prepares for possible military action against the Caracas government to be a hostile act.

This after on Sunday the USS Gravely, which is outfitted with guided missiles, arrived in Trinidad to conduct joint exercises with Trinidad’s navy, but which was seen as a deep provocation by Caracas. 

For starters, Venezuela’s vice president Delcy Rodriguez said that key energy agreements with Trinidad and Tobago have been effectively canceled.

“Rodriguez, who is also Venezuela’s minister of hydrocarbons, said she would ask President Nicolas Maduro to withdraw from a 2015 agreement that enables neighboring countries to carry out joint natural gas exploration projects in the waters between both nations,” AP detailed. After this, President Maduro declared, “I have approved the measure.”

The USS Gravely is actually one of the very US naval vessels which has been involved in the campaign to destroy alleged drug trafficking speedboats off the Venezuelan coast.

“The prime minister of Trinidad has decided to join the war mongering agenda of the United States,” Vice President Rodriguez said on national television Monday.

By Tuesday, Venezuela declared Trinidad and Tobago’s Prime Minister Kamla Persad-Bissessar to be persona non grata amid the escalating tensions.

Venezuela’s National Assembly quickly voted to impose the measure against Persad-Bissessar, formally barring her from entering the country.

STATEMENT: Venezuela denounces military provocation by Trinidad and Tobago in coordination with the CIA to provoke a war in the Caribbean pic.twitter.com/kS0EpaSGGT

— Camila (@camilapress) October 26, 2025

But interestingly Persad-Bissessar hit back, telling AFP, “Why would they think I would want to go to Venezuela?”

A mere seven miles of ocean lies between Trinidad and Venezuela at their closest point, but the Trinidad government is among the few Caribbean leaders to be openly supporting the major US military campaign in the region.

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

As equity valuations approach the record highs of 1999, investors are growing anxious. This unease is partly driven by the media issuing grim warnings, often based in part on CAPE valuations. Consider the following headlines and their summaries.

• The AI valuation bubble is now getting silly – The Guardian (Oct 8, 2025)

  • This article warns that concentration risk in the “Magnificent 7” is extreme. It notes the CAPE is at a dot-com bubble peak, suggesting that when the AI bubble bursts, there will be few places to escape the fallout.

• Extreme caution needed’: Why the Wall Street Boom Might End in Tears – Yahoo Finance (Oct 7, 2025)

  • This piece highlights that the CAPE ratio is more than double its long-term average, indicating lower returns ahead. It points out that extreme valuations have led to periods of weak returns or sharp corrections.

• Famed Warren Buffett Metric Shows Stock Valuations in Dangerous Territory – Business Insider (Oct 1, 2025)

  • This article notes that the CAPE ratio is near its highest level ever. It cites Fed Chair Powell, who called the market “fairly highly valued,” and highlights that 19 out of 20 Bank of America valuation measures are also historically elevated.

The graph shows the S&P 500 and CAPE since 1920. Given how the market performed after the prior two CAPE peaks (1999 and 1929), it’s not surprising to see headlines like the ones above that are fearful.

Instead of assuming that the CAPE ratios of 1929 and 1999 are comparable to today, it is helpful to recognize how Nvidia and a few other big stocks are skewing the CAPE, and what that may mean for the rest of the S&P 500.

First, we provide a brief overview of CAPE and its pros and cons. 

What Is CAPE?

CAPE, or the Cyclically Adjusted Price to Earnings Ratio, is a valuation tool based on long-term earnings trends. It differs from most valuation ratios in that it uses 10 years of earnings. Most popular valuation measures use the last year of fundamental data.

The benefit of the longer earnings lookback is that the model forms more accurate valuations based on secular trends and is much less influenced by short-term or one-time events that have little impact on future earnings growth.  

Some argue against the CAPE logic, claiming that past earnings trends are not indicative of future trends. We agree that for specific stocks, this is undoubtedly the case. However, as we show below, there has been a strong correlation between the earnings of the last ten years and those of the following ten years.  The orange and blue lines representing forward and past earnings are close to parallel. Any variance in them can be explained by the oscillating annualized EPS growth rate in green. As shown, it wavers between 4% and 8%.

Bottom line—using ten years of prior earnings has thus far proven to be a reasonable estimate of future earnings. Therefore, CAPE is a good measure to compare valuations over time.

CAPE – Long Term vs Short Term Return Forecasts

Using CAPE to estimate future returns is like betting on football games. According to Chat GPT, the odds of an NFL team winning when they are 14 or more points betting favorites are 85%. Therefore, such high odds should give us confidence in betting on which team will win. However, predicting the exact path to victory — such as when each team will score or the margin of victory — is nearly impossible.

Similarly, CAPE has proven highly reliable at predicting returns for the next 10 years, but it does not specify which months and years within that period will see gains or losses. Consider the two charts below, which compare CAPE levels to 10-year and 6-month forward returns. In the first chart, low CAPE levels indicate high forward returns and vice versa. At today’s level, we should expect returns for the next ten years in a relatively tight range between plus and minus 3%. However, the second graph shows no predictive reliability in forecasting the next six months based on CAPE levels. Based on that graph, we should expect annualized returns of ±30%.

Lastly, the bar chart below shows that the longer the time horizon, the better the correlation between CAPE valuations and forward returns.

Composition Skews CAPE

Due to the ever-changing nature of the S&P 500, every monthly CAPE calculation involves different weightings and sometimes different stocks. For example, the CAPE ratio of 1929 was heavily weighted with industrial, utility, and railroad companies. Today, it is technology-centric. As a more specific example, Nvidia contributed 0.50% to the S&P 500 in 2020. Currently, it accounts for almost 8%.

The Magnificent Seven (Nvidia, Apple, Google, Microsoft, Amazon, Tesla, and Meta) account for over a third of the index today. Given their surging market caps and earnings growth, those companies are having an outsized impact on CAPE.

For example, Nvidia, at 8% of the index, posted an EPS of $1.08 last quarter. Its average EPS over the previous ten years was a relatively paltry 18 cents. Does Nvidia’s CAPE reflect reality?

Nvidia And The Magnificent Seven Warp CAPE

Nvidia has a current CAPE ratio of 293, but a more reasonable P/E ratio of 48. Thus, we can reasonably argue that, given the recent surge in Nvidia’s earnings, CAPE is misleading. The same holds to some extent for many of the Magnificent Seven stocks, as we show below.

If we strip Nvidia out of the CAPE calculation, the CAPE for the remaining S&P 500 will fall by nearly 3 points. Moreover, if we take all the Magnificent Seven stocks out of the CAPE calculation, CAPE will decline from 41 to 33. The graph below shows how the Magnificent Seven stocks have increasingly warped the CAPE ratio over the last ten years.

Based on the graph above, we can still say the CAPE ratio is historically high, but it may not be as concerning as we originally thought.

Looking back to 1999, we find that Microsoft had a decent impact on CAPE. At the time, it was the index’s most significant contributor, accounting for 5%. Removing Microsoft from the 1999 CAPE calculation would have made it decline by 2. Removing Intel and Walmart, also in the top five in 1999, would have taken another one from CAPE. Exxon and GE, the remaining top five, had no material impact on the ratio. Simply put, the effect today from the largest stocks is greater than in 1999.

PEG Matters

What separates today from 1999 is current earnings growth. Investors are getting more for their CAPE valuation via recent earnings growth. Per Bloomberg,

 The Magnificent Seven and Broadcom Inc., which collectively account for 37% of the S&P 500, are expected to grow profits by an average of 21%.

Investors should be willing to pay high valuations for more growth, but can extraordinary growth rates for a handful of stocks continue? If so, high market valuations make a lot more sense.

Interestingly, some of the Magnificent Seven stocks, which have expensive P/Es but strong earnings growth, may be more conservative than the bulk of S&P 500 companies, which trade at high valuations but have little earnings growth.

To better appreciate this, we use the PEG ratio (Price/Earnings / Expected Growth). This ratio helps make P/E ratios comparable across companies and industries with different growth rates.

The FinViz heat map below shows the PEG ratio for the S&P 500 companies. Notice the sea of red—high PEG ratios — throughout the S&P 500. However, some of the Magnificent Seven, including MSFT, AMZN, NVDA, GOOG, and META, are pretty reasonable.

Other Valuations

A CAPE valuation of 30 versus 40 may ease the concerns of a few readers. However, we caution that the stock market peaked at a CAPE of 32 in 1929. No one valuation gauge will tell you where or when the top is. Conversely, high valuations need not revert to the historical norm. Over time, the average valuation can rise. Also, a reversion to average valuations can result from higher-than-expected earnings growth and stocks posting positive but small returns. 

With all those options to consider, we should still recognize that stock valuations are incredibly high, whether or not Nvidia and the other Magnificent Seven stocks are included.

To “fix” the CAPE10, ie, reduce the “Nvidia warp”, to better reflect current valuations, we present the CAPE 2 graph below, based on two years of prior earnings. As shown, the current level is below the levels in 2021 and 1999. However, it is well above the 1929 market top. The high readings of 2004 and 2010 occurred even as earnings were very low due to the respective recessions occurring in 2002/03 and 2008.  They were not representative of earnings during a more stable period of growth.

The table below, courtesy of BofA, lists 20 valuation measures along with their averages, minimums, maximums, and Z-scores. As it shows, all but one measure points to overvaluation. Moreover, 9 of the 20 Z-scores indicate that the respective valuations are more than two standard deviations above the long-term average.

Summary

Most of the straight P/E measures in the table above are around two standard deviations above the average. But both PEG measures, which encompass future growth, are within one standard deviation of each other. This reinforces the idea that the market is expensive but not grossly expensive if you think earnings growth forecasts are accurate.

 Another critical takeaway from this analysis- the market is making a big bet that a small handful of companies can keep powering strong earnings for the entire index.

Oil prices held steady after a three-day drop as investors assessed the impact of Western sanctions against leading Russian crude producers, alongside a mixed industry estimate of US inventory changes.

President Trump will follow through and enforce harsh new sanctions against Moscow to pressure Vladimir Putin into negotiations to end the war in Ukraine, according to Matthew Whitaker, the US ambassador to NATO.

Indian state-owned refiners are considering whether they can continue to take some discounted Russian oil after the measures were imposed, though some processors will pause purchases for now.

On Tuesday, Indian Oil Corp. said it is “absolutely not going to discontinue” purchases of Russian crude as long as it complies with international sanctions.

“The market is now trying to assess the longer-term impact of the additional sanctions, which will be determined by the quantity of actual barrels removed from supply,” Standard Chartered analysts including Emily Ashford said in a note.

Overnight prices stabilized after API showed across the board big inventory draws…

API

• Crude -4.0mm

• Cushing

• Gasoline -6.35mm

• Distillates -4.36mm

DOE

• Crude -6.86mm (-900k exp) – biggest draw in 7 weeks

• Cushing +1.334mm

• Gasoline -5.94mm – biggest draw since Oct 2024

• Distillates -3.36mm

The official inventory data confirmed the API’s report with large drawdowns in inventories across crude and the products…

Source: Bloomberg

US Crude production rose to a new record high last week

Source: Bloomberg

WTI rallied modestly on the big crude draw

Source: Bloomberg

Oil is on track to notch a third monthly decline, with prices dragged lower by expectations of a global surplus as OPEC+ raises production. Key alliance nations are set to hold discussions this weekend, and may sign off on another supply increase. Traders are also tracking progress toward a US-China trade deal, with Trump and Chinese counterpart Xi Jinping due to meet on Thursday.

There is an extremely tight race on between Geert Wilders’ Party For Freedom (PVV), which is often dubbed in mainstream media as ‘far right’, and more ‘moderate’ parties, including the Green Left Labour Party (GL-PvdA), center-left D66 and centrist Christian Democratic Party (CDA) – as Dutch voters cast their ballots across the Netherlands on Wednesday in a close-run snap election.

Key national issues include reining in migration, chronic shortages of affordable housing, high cost of living, national security questions in relation to the Ukraine war and purchasing US military equipment for Ukraine, as well as forming a stable government amid an increasingly polarized Netherlands political scene. While Wilders’ PVV is favored, chances are slim that other parties will work with it to form a coalition, as happened last June. The political winds are blowing to the center, most analysts believe. 

Polls have indicated that even a victory at the ballot box for Wilders will not easily translate into forming a government. Wilders emerged as the clear winner in the previous election in November 2023, but recent polls suggest his support has slipped ahead of Wednesday’s vote.

Rival parties have increasingly ruled out cooperating with him following the collapse of his own governing alliance last June.

“It’s up to the voters today,” Wilders said after casting his vote at The Hague City Hall, surrounded by security guards. “It’s a close call…four or five different parties. I’m confident.”

European media has widely anticipated that the next Dutch government, which could be more influenced by who comes in second in the vote rather than the first, will more likely to come from the center left or center right.

Polls showed over a third of voters to be undecided even up to the eve of the election. “It’s one of the most important elections, because people need to have their faith restored,” Sarah de Lange, professor of Dutch politics at Leiden University, has described.

According to a new BBC review of what’s at stake on Wednesday:

As many as 15 parties are set to win a share of parliament’s 150 seats, but opinion polls suggest four will stand out. Apart from Wilders’ PVV, there is GreenLeft-Labour under ex-EU top official Frans Timmermans, Rob Jetten’s liberal D66 and the centre-right Christian Democrats of Henri Bontenbal.

And The Guardian reviews some key elements of this election as follows:

• The PVV, which finished a shock first in the last election and formed a short-lived, four-party rightwing coalition, has seen its once sizeable lead fade fast. With nearly half the electorate undecided, analysts say the race is too tight to call.
• Final polling averages suggest Wilders’ party could win between 24 and 28 seats in the 150-seat parliament, well down on the 37 it captured in the 2023 elections. Even if it does finish first, all major parties have ruled out going into government with the anti-immigration firebrand.
• Wilders pulled the plug on the outgoing government in June, less than a year after it took office, when the PVV’s coalition partners refused to endorse his radical anti-refugee plans, widely seen as unworkable or illegal.

* * *

Michael Every of Rabobank comments in the following…

In the UK, the new far-left Your Party will launch legal action against three of its ‘rogue’ founders, according to sources, leaving people asking, ‘Whose Party?’ and ‘Whose donation money?’; and

There is a Dutch general election today, where the Netherlands is rightly glued to its own screen and the rest of the world (and markets) likely aren’t, barring a totally unexpected outcome. After all, Politico quotes one of the major party’s election platforms as ‘Make Boring Great Again’.

The key logistical hub of Ukraine’s eastern front – Pokrovsk, has been under steady contention for much of the past year, with Russian forces spending slow, methodical efforts pushing westward to flank just south of the city. 

For the majority of the war Pokrovsk has acted as the logistical hub and rear operations base for Ukraine’s eastern defensive lines. It sits astride both a key railroad juncture and the highway to Ukraine’s fourth-largest metro, Dnipro.  The city’s defensive positions are a final obstacle to Russia’s access to most of the region. If Pokrovsk falls Russian forces will be able to more easily flank entrenched troops in the north and south of the country.

It’s capture at this point looks imminent, given Ukrainian media is confirming Russian infantry have infiltrated the main logistical district of the city. It’s somewhat sizeable, as it had a prewar population of some 60,000.

“At least 200 Russian infantry armed with automatic rifles, machine guns, and hand-held rockets were moving freely in the southern districts of city, at times ambushing Ukrainian defense forces still generally in control of central and northern districts, according to public statements by army officers to Ukrainian media,” according to Kyiv Post on Wednesday.

Russia’s military has said that Ukrainian forces have been suffering steady and immense losses seeking to defend Pokrovsk.

“Every day, the Armed Forces of Ukraine (AFU) sends up to 120 soldiers to the town of Krasnoarmeysk (Ukrainian name – Pokrovsk) in the Donetsk People’s Republic, which indicates its enormous losses in the area,” military expert Vitaly Kiselev told TASS.”

“The enemy still has a strong hold on the city, and has no plans of retreating,” he said. “They still have equipment and manpower here, all the more so that small units of about 15-20 men are being regularly sent there as reinforcements.”

“In fact, groups of 15-20 people arrive there five or six times a day. This shows enormous losses in this area,” the analyst added.

The loss of the primary rail lines and highway routes in and out of Pokrovsk would cut resources to Ukrainian units across the Donbas and possibly force them to retreat before running out of supplies. This would mean an immediate and sweeping Russian advance all along the eastern lines. 

2/ Ukrainian forces recently advanced near Kupyansk, Pokrovsk, and Hulyaipole and in the Dobropillya tactical area. Russian forces recently advanced in northern Kharkiv Oblast and near Pokrovsk and Hulyaipole.

Read more: https://t.co/LiVFrGnyU4 pic.twitter.com/JqCIzwNaTk

— Institute for the Study of War (@TheStudyofWar) October 28, 2025

Where Putin goes from there is hard to say, but a campaign back into Western Ukraine, this time using attrition tactics, would not be unthinkable – especially given the past months have seen incursions in the central oblast of Dnipropetrovsk which began this past summer.

Pokrovsk is, interestingly, valuable for another reason that’s not immediately apparent: It acts as high ground in a nation of lowlands, and high ground allows for more effective use of drones because the signals travel further and are harder to jam with electronic interference. While US-brokered ceasefire efforts have stalled, these developments give Moscow huge leverage if there should be a return to the negotiating table.