Overall, it was a mixed auction — a reminder that most U.S. investors still haven’t grasped the obvious: bonds are the worst seat in the house when stagflation hits. Only the so-called Banana Republic Portfolio — an even mix of stocks and gold — will help them navigate the inevitable Trump-era stagflation storm.

After flogging billions in 2-year notes while Donald continues his grand Asia tour, the U.S. decided to auction a 5-year note—landing at a “staggering” 3.625% yield. Not only was this the lowest high yield since September 2024, it also managed to squeak past the 3.626% When-Issued level by a mere 0.1bps—the first stop-through for the 5-year since May. In many ways, it was a perfect little déjà vu of the morning’s earlier theatrics, proving that Treasury auctions can be just as thrilling as watching paint dry.

The bid to cover - which has traded in an extremely narrow range in the past year between 2.30 and 2.50 - rose from 2.34 to 2.38, the highest since May, and above the 2.36 recent average.
The internals were more impressive, with Indirects jumping from 59.42 last month to 66.84, the highest since May and above the 64.2% recent average: this sharp increase in foreign demand was also a mirror image to the slide in Indirects in earlier 2Y auction. And with Directs awarded 23.9%, or down from 28.6% and the lowest since May (a far cry from the near record Directs in today's 2Y auction, if above the recent average of 22.1%), Dealers were left with a modest 9.3% of the 5Y auction, below the recent average of 10.7%.

Overall, it was a far sturdier auction—a stark reminder that most U.S. investors still haven’t caught on: bonds are the worst place to be when stagflation hits. Only the so-called Banana Republic Portfolio—a balanced mix of stocks and gold—offers any hope of weathering the inevitable Trump-era stagflation storm.

The Macro Butler rolled out of bed at dawn, fueled by caffeine and mild existential dread, to chat with BFM 89.9 about why money keeps streaming into U.S. equities.

After all, in a world where bonds are secretly the riskiest asset and the planet is ruled by Educated Yet Idiots, there really aren’t any better alternatives than stocks and… well, more stocks and gold.

https://themacrobutler.substack.com/p/interview-with-bfm-899-malaysia-28102025

The Macro Butler made a quick pit stop on Asharq Bloomberg TV Dubai to explain why gold and silver took a breather over the past week—and why this might just be one of the last golden (pun intended) opportunities to boost your allocation to that so-called barbaric relic.

After all, sustainable peace seems about as likely as fiscal discipline when the Educated Yet Idiots are still running the circus.

So, polish your gold bars, top off your tank, and enjoy the spectacle.

The interview has been translated into Arabic.

https://themacrobutler.substack.com/p/interview-with-asharq-bloomberg-tv-3dc

While the government shutdown circus keeps spinning with no ringmaster in sight, Washington decided to add another act to the show—issuing $44 billion in 7-year paper.
The auction priced at a high yield of 3.79%, down from 3.953% in September and the lowest since September 2024. It tailed the When-Issued 3.782% by 0.8bps—marking the third tail in a row and the biggest since last August. In short, even the bond market seems to be dozing off between acts of fiscal comedy.

The bid-to-cover came in at 2.457 — a modest bounce from September’s multi-year low of 2.395 — but still a far cry from anything resembling enthusiasm. Compared to the six-auction average of 2.575, it was like watching a tired encore nobody asked for. The internals didn’t offer much comic relief either: Indirects took 59.0%, better than September’s disaster at 56.4%, yet still miles below the 67.3% six-auction norm. Directs quietly exited stage left to 27.9%, leaving Dealers holding the bag at 13.14% — their largest slice since April, and probably not the kind of record they were hoping to break.

Overall, it was a thoroughly forgettable, belly-busting 7Y auction — the kind you’d only remember if you were forced to. With yet another tail and a lukewarm turnout, it might just be the first sign that investors are finally waking up to the reality that the “risk-free” asset is now about as risk-free as a banana peel on a marble floor — all thanks to the Educated Yet Idiots proudly steering the world’s largest debt machine straight into another wall.

🤵 The Macro Butler Special Service 🤵

🌐 From rate cuts to balance sheet manoeuvres, Fed & Furious has perfected the art of creating chaos—one “helpful” policy at a time. 🌐

Read more here: https://themacrobutler.substack.com/p/fed-and-furious-breaking-the-economy

Listen to a summary of The Macro Butler Special Service newsletter via podcast on Substack; YouTube; Rumble & TikTok.

https://themacrobutler.substack.com/p/fed-and-furious-breaking-the-economy-3b0

While Donald Copperfield was on his best behavior during his Asia tour, Russia spent the week unveiling two new ways to end humanity — the 9M730 Burevestnik nuclear-powered cruise missile and the 2M39 Poseidon underwater nuke drone. The Skyfall missile even showed off with a 15-hour, 14,000 km joyride — proof that Moscow’s idea of “innovation” is making sure the apocalypse has better range.

https://euro-sd.com/2025/10/major-news/47460/russia-tests-wonder-weapons/

Putin briefly traded geopolitics for mythology, announcing the successful test of Russia’s nuclear-powered underwater drone, the Poseidon UUV. For the first time, its nuclear reactor was activated post-launch — a “huge success,” according to the Kremlin. Putin boasted that Poseidon surpasses all existing weapons in speed, depth, and destructive power, capable of triggering 1,600-foot radioactive tsunamis. Poseidon can reportedly carry a 2-megaton warhead, 150 times stronger than Hiroshima. Analysts have called the project a “flying Chernobyl” for good reason: a nuclear-powered torpedo designed to unleash a radioactive tsunami is not exactly a sustainable energy plan. If detonated near a coastal city, casualties could reach into the millions, leaving regions uninhabitable for generations.

https://www.youtube.com/watch?v=vINx4jJkmKU&t=296s

In short: while the rest of the world works on AI and renewable energy, Moscow’s innovation pipeline remains focused on perfecting civilization-ending gadgets — and this time, they’ve made one that can swim.

As expected, the ECB heroically did nothing — rates frozen, statement copy-pasted, mission accomplished. The economy is “resilient,” they say, thanks to past rate cuts (translation: luck), though “uncertainty remains” — which, in ECB-speak, means we have no clue what’s next. GDP crawled up 0.2%, and they’re calling it a victory lap. The doves are whispering about cuts in December, but for now, the ECB remains Europe’s most eloquent spectator.

In true Orwellian fashion, the ECB took another step toward its brave new monetary world, advancing the digital euro from theory to impending reality. The project now enters a phase of “technical readiness,” with pilot transactions slated for 2027 and full rollout conveniently timed for 2029 — just long enough for oversight to fade and compliance to feel natural. Behind the polished language of “inclusivity” and “monetary independence,” the ECB quietly confirmed partnerships with a consortium of tech gatekeepers —Worldline, Capgemini, and Sapient GmbH — who will build the digital infrastructure of tomorrow’s financial surveillance. Banks are expected to spend up to €5.8 billion preparing for this utopia, while the ECB invests another €1.3 billion to ensure “seamless control” over every digital cent in circulation.

https://www.ecb.europa.eu/euro/digital_euro/progress/html/ecb.deprp202510.en.html

In a nutshell, the ECB froze rates, praised 0.2% growth as triumph, and quietly advanced its digital euro dream — a “complement to cash” that sounds suspiciously like the prelude to its funeral.

As Confucius preaches, when factories sleep and builders rest, the harmony of growth is but an illusion. China’s manufacturing PMI slipped again to 49, marking its seventh month of contraction, while services barely hovered above 50. Holidays and shopping sprees provided a fleeting sugar high, not a cure. Yet Beijing, seeing trade winds calm and targets within reach, prefers meditation over additional stimulus.

In a nutshell, China’s economy took a holiday too—factories snoozed, services yawned, and Beijing’s still pretending all is zen.

The Macro Butler pulled up another armchair for a spirited chat with Piggo’s Trading Desk on how wars and economics dance the same tango — and why the Fed may soon find itself hiking in 2026 while pouring liquidity like a bartender on overtime.

Grab a coffee and enjoy the show!

https://themacrobutler.substack.com/p/interview-with-piggos-trading-desk-85c