EU UTILITIES: Verbund (VERAV): Capital Decrease Story        

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Dutch voters go to the polls on 29 October in a snap general election to elect the 150 members of the lower chamber of the Dutch parliament, the House of Representatives. In this preview, we provide a rundown of the main political parties, an explanation of the electoral system and government formation process, a chart pack of opinion polling and prediction market odds, hypothetical post-election scenarios with assigned probabilities, and sell-side analyst views of the contest. 

The snap election follows the collapse of the right-wing coalition, led by former Director General of the General Intelligence and Security Service, Prime Minister Dick Schoof, in June. The coalition included as its largest party Geert Wilders’ right-wing populist Party for Freedom (PVV) alongside the upstart New Social Contract (NSC), liberal-conservative People’s Party for Freedom and Democracy (VVD) and agrarian-populist Farmer-Citizen Movement (BBB). 

The Dallas Fed's October sectoral surveys were mixed, with Manufacturing activity improving alongside a noteworthy downshift in inflation pressures, while Services firms saw a pullback in activity with price gauges remaining relatively subdued.

• The Texas Manufacturing Outlook Survey saw a a slightly bigger improvement than expected in the headline index, to -5.0 from -8.7 prior (-6.2 expected). While still a negative reading, this month's reading was in line with the longer-term average. Current production was steady (5.2 after 5.2) at below-average levels albeit the 6-month outlook fell to a 6-month low 21.0 from 31.6. We note that new orders moved a little higher too (-1.7 after -2.6) though remains a little below the long-term average. There was a small increase in employment but a contraction in work hours.
• We note that this marks 4 of 5 regional Feds to report improved current manufacturing conditions in October vs September (NY, KC, Dallas, Richmond, with Philly the notable laggard), boding well for the Nov 3 release of ISM Manufacturing (we'll preview that release next week).
• The biggest standout in this report though was in the inflation gauges.
• October saw a sharp drop in current prices paid: to 33.4 from 43.4 prior, for the lowest reading since January. It's still elevated (averaged 15.9 in 2024, for example) but has clearly subsided from the high 40s seen at the outset of the tariff concerns earlier this year.
• Current prices received also pulled back to a 7-month low 7.7 (11.7 prior), suggesting less appetite/ability to pass on prices to clients. By comparison, 6-month prices ahead remained relatively elevated with little change from prior (paid = 46.1 after 47.1, received = 37.3 after 39.7).

• US TSY TO SELL $95.000 BLN 8W BILL OCT 30, SETTLE NOV 04