Strait of Hormuz Reopening Stalled as Weak US Jobs Data Boosts Rate-Cut Expectations

Daily News

Summary:

The Strait of Hormuz will not reopen until Iran's conditions are met; US September nonfarm payrolls come in far below expectations...

Highlights

1. Iran responds to US proposal, saying the Strait of Hormuz is the priority at this stage

2. Strait of Hormuz will not reopen until conditions are met

3. Trump's top Cabinet officials hold closed-door meeting at Camp David to discuss next steps on Iran war and Yemen conflict

4. OPEC+ keeps November oil production quotas unchanged for a second consecutive month

5. US September nonfarm payrolls come in far below expectations

Details

Iran Responds to US Proposal, Saying the Strait of Hormuz Is the Priority at This Stage

Responding to the US plan proposed to Iran, Iranian Foreign Ministry spokesman Esmaeil Baghaei said on October 4 that Iran had conveyed its position to Qatari mediators during a brief visit to Qatar.

Baghaei said the proposal put forward by the United States was broadly consistent with its previous position and focused mainly on Iran's nuclear issue. Iran has made clear that the priority at this stage is the Strait of Hormuz.

Baghaei said ensuring the security of the Strait of Hormuz, or restoring safe navigation through the waterway, would require concrete steps by the United States, including ending interference with Iranian commercial shipping, lifting sanctions and halting other interventionist measures.

He added that Iran had reviewed the concerns conveyed by Washington through Qatar and would conduct the necessary consultations on certain details before providing additional comments to the other side.

Strait of Hormuz Will Not Reopen Until Conditions Are Met

On October 4 local time, Iranian Parliament Speaker Mohammad Bagher Ghalibaf said that the United States had been driven into a desperate position in the face of Iran's firm stance and continued resistance.

Ghalibaf said that although Washington has presented a different narrative, it had recently put forward several proposals through intermediaries. The United States must recognize that the era of imposing unilateral demands through a war of attrition is over, he said.

Iran's position is clear and firm: the Strait of Hormuz will not reopen until all seven conditions put forward by Iran under the Islamabad Memorandum of Understanding are met.

Trump's Top Cabinet Officials Hold Closed-Door Meeting at Camp David to Discuss Next Steps on Iran War and Yemen Conflict

According to three US officials cited by Axios, several senior members of President Donald Trump's Cabinet held a hours-long closed-door meeting at Camp David last Friday to discuss the next steps in the war with Iran and the conflict between Saudi Arabia and Yemen's Houthi movement.

The Trump administration did not publicly announce the meeting, which officials described as highly unusual. The previous meeting of a similar nature took place in June 2025, just days after Israel launched its war against Iran.

The officials said the meeting was chaired by Vice President JD Vance. Other participants included Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, White House envoy Steve Witkoff, CIA Director John Ratcliffe and Chairman of the Joint Chiefs of Staff Gen. Dan Caine.

OPEC+ Keeps November Oil Production Quotas Unchanged for a Second Consecutive Month

OPEC+ decided at its meeting on Sunday to keep oil production quotas for November unchanged, leaving the group's production levels steady for a second consecutive month.

Representatives from Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman held an online meeting to assess current conditions and the outlook for global oil markets.

The participating countries reaffirmed their commitment to the production arrangements under the OPEC+ cooperation framework and said they would continue to assess future production policy on a monthly basis in light of developments in international oil markets.

The next meeting is scheduled for November 1.

US September Nonfarm Payrolls Come in Far Below Expectations

The most dramatic development last Friday came from the US Labor Department. Nonfarm payrolls increased by just 29,000 in September, far below the expected gain of 90,000.

The previous two months' figures were also revised sharply lower. July payrolls were revised from a gain of 21,000 to a decline of 10,000, while August payrolls were revised down from 162,000 to 133,000. Combined, the two months saw 60,000 fewer jobs than previously reported.

In other words, the US labor market has indeed been cooling in recent months, and the weakness is not limited to September alone.

By sector, September job growth was mainly concentrated in health care, construction and manufacturing. Health care added about 17,000 jobs, construction gained roughly 11,000, and manufacturing added about 9,000. Government employment fell by 17,000, information-sector employment declined by 10,000, and financial activities employment fell by 7,000.

The September employment report was also the final major jobs report ahead of this month's Federal Reserve policy meeting and the US midterm elections.

The weaker-than-expected data significantly reduced expectations for further Fed rate hikes, while US stocks, Treasuries and gold rose in the short term as risk appetite improved.

It is worth noting that fluctuations caused by the US government's seasonal-adjustment models may have contributed to the weak September payrolls reading and the downward revision to August employment. There is currently no indication of a broad-based increase in layoffs, while initial jobless claims remain near their lowest level in 57 years.

Today's Key Events

15:00 (UTC+8) ECB Governing Council Member Robert Holzmann Speaks

15:45 (UTC+8) ECB Governing Council Member Joachim Nagel Speaks

16:00 (UTC+8) ECB Chief Economist Philip Lane Speaks

17:00 (UTC+8) ECB Executive Board Member Isabel Schnabel Speaks

17:15 (UTC+8) Eurozone August PPI MoM

19:15 (UTC+8) ECB Governing Council Member Robert Holzmann Speaks

22:00 (UTC+8) US September ISM Services PMI

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