U.S. employment figures came in far weaker than anticipated, reducing the odds of a near-term Federal Reserve rate hike. Under pressure from the Trump administration, the G7 announced a coordinated release of emergency energy reserves to restrain rising prices. Meanwhile, AI safety remained in focus as Trump announced the creation of a superintelligence task force, while Masayoshi Son and others once again warned about AI risks. Brazil's election voting has concluded and vote counting is underway.

U.S. nonfarm payrolls for September showed job gains far below expectations, with wage growth also slowing. Data released Friday by the Bureau of Labor Statistics showed nonfarm payrolls rose by 29,000 in September, well short of the 90,000 economists had forecast, and the prior two months were revised lower. The unemployment rate climbed to 4.2% from 4.1%. OIS pricing reflected only about 6 basis points of tightening for October, compared with fully pricing in a 25-basis-point hike just two weeks earlier. Following the release, U.S. Treasuries initially rallied sharply, with short- and intermediate-maturity yields falling by as much as 10 basis points, but reversed course by the close, with yields across the curve rising 2 to 5 basis points. The Fed's September meeting minutes are due Wednesday and may show that many policymakers were deeply concerned about core price trends at the time. Bloomberg Economics said the bar for a rate hike in October is now very high. In an interview published by Axios on Saturday, U.S. Treasury Secretary Scott Bessent said the recent rise in Treasury yields is in line with global trends and there is no need for alarm. After being sold off, the French bond market stabilized somewhat on Friday, but traders remain highly focused on potential signs of contagion across eurozone bond markets.

G7 Acts Together to Bring Down Oil Prices

After persistent pressure from the Trump administration to curb fuel price increases, the Group of Seven and its partners decided Friday to release as much as 100 million barrels of emergency oil and diesel reserves. French President Emmanuel Macron said the release would be coordinated by the International Energy Agency and carried out over the next four months, with an initial focus on diesel. He said the move was intended to "send a clear signal to the market." Following the announcement, European diesel futures fell more than 8% at one point before trimming losses slightly. U.S. diesel futures dropped as much as 5.6%. Brent crude futures ended Friday roughly flat. Two European diplomats said the actual additional supply could be only a fraction of the announced volume, since a considerable portion of the previous emergency reserve release plan in March has yet to reach the market. Yemen's internationally recognized government announced Sunday a full-scale military operation aimed at retaking all areas controlled by the Houthis. In addition, major OPEC+ members announced Sunday that they would keep next month's production quotas unchanged.

Artificial Intelligence

Trump announced Sunday the creation of a Superintelligence Task Force to ensure the United States continues to lead the world in superintelligence. SoftBank Group leader Masayoshi Son, one of the most devoted believers in artificial intelligence, said Sunday in a rare remark that countries need to work together to control the threats posed by powerful AI models, warning that superintelligence could become "super dangerous" if it falls into the wrong hands. An OpenAI employee focused on AI safety left the company and warned that leading AI firms are not doing enough to reduce risks. He said AI companies should operate more like nuclear power plants "so that accidental and inevitable human error does not open the door to catastrophe." U.S. Treasury Secretary Bessent criticized warnings about AI risks, calling such remarks alarmist and unhelpful. He also said he would seek to reduce risks by establishing a bilateral notification mechanism with China. Apple said it plans to introduce new privacy controls for Mac users and warned that the risks of granting broad data access to third-party software, including AI agents, are rising.

Other News

1. Brazil's election voting has ended and vote counting is underway. 2. Ukrainian President Zelensky revealed in an interview that he has asked Trump to sanction companies developing services that could compete with Starlink. 3. Apple said a "small number" of U.S. AT&T customers using the iPhone 18 Pro Max recently experienced a malfunction that caused their phones to lose cellular service, requiring device replacements. 4. Tesla's third-quarter sales beat expectations, indicating the company's core business is stabilizing. 5. Nvidia shares hit an intraday record high for the first time since May. The stock rose as much as 3% on Friday before closing up 1.3%. 6. Nomura raised its forecast for Alibaba's adjusted net profit for fiscal 2027 by 7% and maintained its target price of $178 and "buy" rating on the stock.