Iran War Intensifies Political Pressure on Trump as Markets Focus on Fed Meeting

Daily News

Summary:

The Iran war is weighing on Trump, with his approval rating falling to 36%. The FOMC rate decision could see renewed dissent, offering clues about the Fed's policy direction in December.

Headlines

1. Iran War Weighs on Trump as Approval Rating Falls to 36%

2. Exit Polls Show Netanyahu's Bloc Falling Short of a Parliamentary Majority

3. CFTC Plans to Increase Commitments of Traders Report Frequency to Twice a Week

4. French Electricity Prices Hit a Four-Year High as Wind Power Output Plunges

5. Iran's Supreme Leader Stresses Implementation of Iranian Conditions to End the War

6. Yemen's Houthis Claim Strike on Saudi Oil Refinery

7. US Core Capital Goods Orders Rise in September as Shipments Surge

8. US and Russia Reportedly Discuss Postwar Sakhalin Oil Joint Venture

9. FOMC Rate Decision Could See Renewed Dissent, Offering Clues to December Policy

Detailed

Iran War Weighs on Trump as Approval Rating Falls to 36%

The war in Iran is putting pressure on US President Donald Trump, with some Republicans also expressing concern. A Fox News poll showed Trump's approval rating falling to 36%, down from 44% before the war. Some 85% of voters expressed concern about inflation, 83% about gasoline prices, and 75% about the war. Republicans are facing an increasingly difficult fight to retain control of Congress, adding to the pressure on the party.

Exit Polls Show Netanyahu's Bloc Falling Short of a Parliamentary Majority

Exit polls from Israel's parliamentary election on the evening of October 27 showed that the bloc led by Israeli Prime Minister Benjamin Netanyahu had failed to secure a majority in parliament.

Voting in Israel's 26th parliamentary election ended at 10 p.m. local time. According to data released by Israel's Central Elections Committee, voter turnout had reached 74.3% by 8 p.m., well above the 66.3% recorded at the same point in the 2022 election. The committee said this was the highest nationwide turnout recorded by that time of day since 1988. Final turnout is expected to rise further.

CFTC Plans to Increase Commitments of Traders Report Frequency to Twice a Week

The US Commodity Futures Trading Commission (CFTC) is working to increase the publication frequency of its closely watched Commitments of Traders (COT) report to twice a week by the end of this year.

Currently published every Friday, the report provides a detailed breakdown of buying and selling positions in commodity markets, distinguishing between hedge funds and other asset managers and commercial market participants. Producers rely on the data to help inform their hedging decisions, while speculative traders use it to track changes in market positioning and assess whether bets have become excessively concentrated.

CFTC Chairman Michael Selig said last week at an agricultural futures conference in Kansas that the plan to publish the report more frequently was driven by demand from the agricultural sector.

French Electricity Prices Hit a Four-Year High as Wind Power Output Plunges

Declining wind power generation and reduced nuclear output have forced France to rely more heavily on expensive gas-fired power plants, sending electricity prices to their highest level since the worst phase of the 2022 energy crisis.

Auction results from European power exchange Epex Spot showed that the day-ahead electricity price settled at €253 per megawatt-hour for Wednesday delivery. Data from grid operator RTE indicated that average wind power output in France was expected to fall below 3 gigawatts on Wednesday, less than half the average level recorded so far in October.

The price surge suggests that Europe could face similar episodes of elevated electricity prices more frequently this winter if renewable power generation weakens. Reduced availability at French nuclear power plants, a cornerstone of Europe's electricity system, has further tightened supply. The utilization rate of France's 57 nuclear reactors stood at 64% on Tuesday, significantly below the level recorded a year earlier.

Iran's Supreme Leader Stresses Implementation of Iranian Conditions to End the War

Iran's Islamic Revolutionary Guard Corps (IRGC) said in a statement that Rezaei, a major general and secretary of Iran's Supreme National Security Council, had met with Iran's Supreme Leader Mojtaba Khamenei.

The discussions covered ways to safeguard national and regional security through the management of the Strait of Hormuz, as well as strengthening bilateral relations with neighboring countries on the basis of lasting mutual benefits.

Khamenei said the enemy's difficult position was the result of Iran's steadfast national resistance. He stressed the need to release information actively and promptly to sustain public participation in efforts to defend the country and its political system.

He also said Iran should seek to end the war and the state of neither war nor peace by implementing the conditions put forward by Iranian officials, thereby safeguarding the rights and interests of the Iranian people and the resistance front.

Rezaei said the secretariat of the Supreme National Security Council was advancing Iran's strategic policies, including the establishment of regional arrangements and an order led by countries within the region themselves.

Yemen's Houthis Claim Strike on Saudi Oil Refinery

Yahya Saree, military spokesperson for Yemen's Houthi movement, announced on Tuesday that the group had launched a ballistic missile at a refinery at Ras Tanura, an oil port in eastern Saudi Arabia, causing a major fire at the facility.

Saree also claimed that the Houthis had used ballistic missiles to attack Saudi Arabia's Ministry of Defense in Riyadh and drones to target Abha International Airport in the country's southwest. He said both attacks had accurately hit their intended targets, with the strike on Abha airport disrupting local air traffic.

Saree further stated that the Houthis had used ballistic missiles to target two military transport aircraft, one at Najran Airport in the Saudi border city of Najran and the other at King Khalid Air Base in Khamis Mushait.

US Core Capital Goods Orders Rise in September as Shipments Surge

New orders for core US manufactured capital goods increased in September, while shipments surged, indicating that business spending on equipment maintained strong momentum in the third quarter.

The US Census Bureau, part of the Department of Commerce, said on Tuesday that orders for nondefense capital goods excluding aircraft rose 0.5% in September, following an unrevised 1.6% increase in August. Economists had expected a 0.7% gain.

Shipments of core capital goods, which are used to calculate the equipment investment component of gross domestic product (GDP), jumped 1.2% in September, accelerating from a 0.6% increase in August.

Driven by substantial investment in artificial intelligence (AI), business spending on equipment has grown at a double-digit annualized rate for two consecutive quarters, providing important support for manufacturing and the broader economy.

Economists expect the US government's preliminary estimate of third-quarter GDP, due Thursday, to show annualized economic growth exceeding 3.0%.

However, investors are increasingly concerned about rising costs associated with long-term projects, given the uncertainty surrounding their returns. Over the past year, technology companies have raised substantial amounts of debt to finance AI spending.

US and Russia Reportedly Discuss Postwar Sakhalin Oil Joint Venture

The Financial Times reported that the United States and Russia had proposed a plan to establish a joint venture between major US and Russian oil companies in offshore areas near Sakhalin Island in Russia's Far East after the war.

The two sides are also discussing the possibility of involving major US oil companies in a plan to resume Russian oil supplies to Europe through the Druzhba pipeline, which connects Russia with parts of Central Europe.

Russia's war in Ukraine has entered its fifth year. The potential agreements form part of broader US efforts to end the conflict by offering incentives to bring the parties to the negotiating table.

US officials have repeatedly emphasized that such cooperation projects would only be possible after the war ends. According to people familiar with the matter cited in the report, US President Donald Trump's envoy Steve Witkoff discussed potential commercial agreements with Russian President Vladimir Putin during a meeting in St. Petersburg in early September.

FOMC Rate Decision Could See Renewed Dissent, Offering Clues to December Policy

The Federal Reserve is widely expected to avoid a surprise rate hike at Wednesday's policy meeting. Three hawkish officials—Lorie Logan, Beth Hammack and Neel Kashkari—who dissented at the July meeting could vote against the decision again, favoring a 25-basis-point rate increase.

Fed Chair Kevin Warsh's press conference could also provide clues about the central bank's policy priorities for the remainder of 2026.

Fed officials have sent notably divergent signals about the monetary policy outlook. Collins, Paulson and Hammack favor further rate increases, while Jefferson, Williams and Waller have advocated waiting to assess the effects of the previous rate hike. Fed Chair Warsh, meanwhile, has consistently maintained a neutral public stance.

Today's Economic Calendar

15:00 (UTC+8) Germany November GfK Consumer Confidence

17:00 (UTC+8) Switzerland October ZEW Investor Sentiment

21:45 (UTC+8) Bank of Canada October Interest Rate Decision

22:30 (UTC+8) Bank of Canada Governor Tiff Macklem Holds Monetary Policy Press Conference

02:00 (UTC+8) Federal Reserve October Interest Rate Decision

02:30 (UTC+8) Fed Chair Kevin Warsh Holds Press Conference

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