Market moment
Stocks up, bonds down. As of the evening (US trading still under way), the S&P 500 is around 7,775 (+0.7%), the Nasdaq around 27,450 (+1%), the Dow around 51,300 (+0.2%). Chipmakers are leading the Nasdaq after Musk confirmed talks with TSMC about the Texas “Terafab” plant.
Yields at their highest since 2002. The 10-year Treasury yield rose 7 basis points to 5.35%, the 30-year to 5.70%. The ISM services index slipped to 54.9, but its prices component jumped to 74. Growth is slowing, prices are speeding up.
Oil splits in two. Brent around $101–102, WTI around $90 (−1.4%), with the gap between them above $11. The Houthi strike on Aramco pushed prices up, but Saudi Arabia unexpectedly cut Arab Light for Asia to the lowest level since 2020, when the market expected an increase.
Gold and the dollar flat. Gold around $4,150 an ounce, the dollar index (DXY) around 102.
Bitcoin without direction. Around $85,400, almost unchanged on the day and roughly $37,000 below a year ago.
Lithuania and the Baltics
Sinkevičius in Berlin. The prime minister met Chancellor Friedrich Merz and said that “Germany can rely on Lithuania”. The main topic: the 5,000-strong brigade by the end of 2027; housing for it at Rūdninkai was completed today. Sinkevičius hopes the dispute over the EU’s 2028–2034 budget will be settled before January, when Lithuania takes over the EU Council presidency, but admits positions differ.
The “receipts” scandal returns. Four more local politicians have been charged, among them Trakai district mayor Andrius Šatevičius. According to the anti-corruption service STT, between 2019 and 2023 he allegedly filed false expense reports, causing €5,323 in damage. The mayor says he raised the doubts himself back in 2024.
airBaltic cuts jobs. The Latvian airline, which sought bankruptcy protection in the US, plans to eliminate 500–700 of its roughly 3,000 jobs in Riga, Vilnius and Tallinn. The final structure should be clear by mid-October. The reasons: debt and fuel costs driven up by the Iran war.
Lukoil near the Curonian Spit. Lithuania’s Environment Ministry says it has no official information about a Russian permit for Lukoil to develop the Nadezhda field 12 nautical miles from the spit. Moscow has already placed the field on a list that allows a licence to be issued without an auction.
Latvia begins coalition consultations. The president has started talks with parties after the weekend election, in which Andris Kulbergs’s United List won 42 of 100 seats.
Europe
Paris and Berlin defend exporters. France and Germany are pressing Brussels to shield exporters from tightening carbon dioxide rules; Spain and Italy are expected to back them. Climate policy is increasingly becoming industrial policy.
€130 million for drone defence. Brussels has allocated an additional sum for drone defence measures. Lithuania’s defence minister, meanwhile, says bureaucracy is slowing the rollout of detection systems.
Ukraine
Russia promises more strikes on Kyiv. After weekend strikes on the Northern and Southern bridges, Moscow pledged to intensify attacks on the capital, calling it a response to Ukrainian attacks on oil refineries. Overnight 205 drones were launched, 172 shot down or jammed.
The front is static. 177 clashes in a day, the heaviest near Pokrovsk and Kostiantynivka. The fifth winter of the war begins with no significant change to the line.
The US proposes three-way talks. Zelensky says the Trump administration has proposed a technical-level trilateral meeting by the end of October. Kyiv agrees it could be hosted by the United Arab Emirates or another country the US suggests.
Ukrainian ammunition in Alytus. The Ukrainian DEMZ project in Alytus and the Prienai district (€93.3 million, up to 450 jobs) is proposed to be declared important to national security. The same Alytus where Snaigė went bankrupt yesterday: civilian industry retreats, military industry arrives.
Geopolitics
Hormuz stays closed. Iran says the strait will remain closed until the US accepts Tehran’s seven-day plan based on the Islamabad memorandum. Traffic through the strait is down about 95%. President Pezeshkian today called talks with the US meaningless, and a parliamentary committee has already reviewed a bill allowing fees to be charged on ships.
Saudi Arabia chooses market share. Aramco priced oil for Asia $5 below the regional benchmark, when traders expected a $5 increase. Riyadh, just hit by the Houthis, is sacrificing price to keep its Asian buyers.
Brazil turns right. Flávio Bolsonaro won more than 47% in the first round, Lula 45%, although polls had forecast a Lula lead. The runoff is on October 25. The real and Brazilian stocks read this as a business-friendly signal.
Arms for the Gulf and Taiwan. The US approved a $1 billion arms package for the UAE, and Taiwan’s representative expects Trump to approve a $14 billion package for Taipei. Meanwhile G20 trade ministers rejected a US call, aimed at China, to curb industrial overcapacity.
Central banks
The market no longer believes in an October hike. After weak September payrolls (just +29,000), markets see about an 82% chance the Fed holds rates in October (currently 3.75–4.00% after the September hike). The long end of the bond market disagrees and keeps rising. The Fed will publish the minutes of its September meeting this week.
What to watch tomorrow
Fed minutes and the 10-year yield. Whether 5.35% becomes a floor or a ceiling. The minutes will show how much support another hike has in the Warsh-led committee.
Sinkevičius’s visit continues. Whether Berlin produces more concrete commitments on brigade funding and air defence.
airBaltic talks with unions. How many jobs stay in Vilnius and how many routes get cancelled for the winter season.
Iran and a Hormuz toll. If the bill moves to a plenary session of parliament, shipping insurance premiums will rise again.
Will Russia carry out its threat to Kyiv. Overnight strikes will show whether the bridges were the beginning or the whole campaign.
Meška’s comment
US 10-year borrowing is the most expensive since 2002, and stocks rise on the same day. A paradox? No, it is a market that believes in artificial intelligence more than in the Treasury: money is running from bonds into chipmakers while the Fed weighs whether to raise rates once more.
For Lithuania this is not abstract. Expensive money and expensive oil have already eaten airBaltic, and the same pressure is reaching our budget through interest rates and the petrol station. The German brigade guards the border, but the price of debt we will have to pay ourselves.