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- [00:09]
A
Hello, everyone. Hello out there. Welcome to this week's edition of Macro Mondays. My name is Mig Roosevelt, your usual host back from a week in the sun and back in the studio with you, Andreas, how are you?
- [00:22]
B
It doesn't look like you've been suntanning a whole lot of meals, to be.
- [00:25]
A
Honest, but we brought our three month old daughter down there. So it was mostly hotel room antics. But you stayed within the air condition? Absolutely, absolutely. We are northerners after all. Anyway, Andreas, what a weekend we've had. What a day. Today it's inauguration day. We're of course still working here in here in Europe. But my gosh, what a day. Today this is going to be part preview of the inauguration and also we're going to try and talk about everything not Trump related. I know that's very, very tough right now because everything seems to be Trump related and there seems to be so many good storylines, but we'll try and do that. Let's see what we can get about Andreas. We're of course sending this to you live and recording this for podcast right ahead, a couple of hours ahead of the inauguration.
- [01:14]
B
Yeah.
- [01:14]
A
So this might be a good time to play our usual disclaimer slash jingle. So remember that our trade recommendations and analysis here might be sometimes maybe good.
- [01:26]
B
Sometimes maybe.
- [01:30]
A
Exactly. That's genericartous for you guys out there. So, Andreas, let's jump right into it. I mean, we've, we've talked a lot about the Trump crypto policy. We've had the meeting with between Eric Trump and Michael Saylor. What was going to happen? Strategic bitcoin reserve. And then the Trump coin landed. Is that it? Was that the whole Trump bitcoin bitcoin policy? What are you making of all this?
- [01:54]
B
I don't know really. I think a lot of pundits expected the Trump administration to be more about utility projects rather than meme coins. And here we are with the Melania coin trading. My best guess is that we'll get a Baron coin today.
- [02:14]
A
Eric Coin.
- [02:14]
B
Yeah, Eric Coin. Maybe a Greenland coin. I'll buy the Greenland. I'll buy the Greenland one if they create one. So, you know, I've got mixed feelings about this. In my opinion, it doesn't look overly pretty, this move from the Trump family. You know, a couple of hours after Jerry Gensler left office as the policeman in charge of financial oversight, amidst this big crypto launch party on Friday, where all of the quote unquote, more serious projects were present, they launched this and you know, it's been a great success. So Far, obviously, but. But then we had the Milania meltdown yesterday, and I have no clue where this ends, to be honest. All I can say is that I'm not involved. If I sound bitter, that's the reason why. But I'm not planning on being involved in this either, because I've got no clue where this is heading. And, you know, I think it's both a. It's both for good and for bad that this is now part of the, like, policy journey for the Trump administration. Because obviously, with this kind of wealth vested in the meme coin story now, you know, they cannot pull the rock from under this. No, it would be an absolute catastrophe.
- [03:38]
A
If they can't do a hawk to a.
- [03:40]
B
No, no, no, no, no. That would be a catastrophe. And know, in that sense, he's more incentivized than ever to throw money at the problems of this sector, should they arise. Right. So before this, he's, he got, you know, he had some vested interests in it. Now he's got billions of vested interests in the Solana space. You know, it's just an amazing development, and I've got mixed feelings about it, to be honest, Neil. Um, you know, in, in a sense, I think that this is kind of blown out of proportion for them. I don't think they planned on this being such a big success. It, you know, the Trump NFTs, the cards and all that. It wasn't really a biggie.
- [04:24]
A
Right.
- [04:25]
B
And, you know, this was probably something Eric told Donald, okay, let's do this. Right. You know, it doesn't hurt anyone. Right. And like now, all of a sudden, you know, it's one of the bigger projects on Earth.
- [04:36]
A
Right.
- [04:37]
B
So it's, it's just amazing.
- [04:38]
A
Yeah, no, no, I'm, I'm not fully buying into all the conspiracy theories that this is a way for foreign governments to pay Trump directly, et cetera. I don't think it was ever intended to be. That might become that. But essentially, you've now got a, a crypto billionaire entering office instead of a real estate tycoon, because he's not really real estate tycoon. That's very small, small portion of his, of his wealth.
- [04:58]
B
But. But that's an important message of mine today. Fair enough. He's got, I don't know, 50 billion in net wealth from this, but he's not sold those coins. Right. And it's probably one of the more illiquid positions you could sit on. So in my opinion, it's to say that he's earned that much money.
- [05:20]
A
Yeah. But, but I mean, yeah, yeah, it's, it's a different set of assets than all this commercial real estate, which might be complete garbage as well, but that's a whole other topic. Address. I mean.
- [05:33]
B
Yeah, my God, you know, two takeaways from this. Solana is now linked to Trump for good and for bad. If this Trump coin melts down, it's a problem for Solana as well. In my opinion. Ethereum is completely left on the platform, if that's a saying in English. You know, Vitalik is kind of left behind and he's, he's aiming at being like the, the quote, unquote, the moral purist here. And I don't think that's how it works with Trump in office. You need to work with them, you need to be a loyalist. It may be a good medium term play from Vitalik and the Ethereum foundation, but for now it just seems like he's not really a part of that inner circle in a sense. And then again, the Liberty foundation or whatever it's called, started buying Ethereum yesterday. In any case, it's bullish for the sector overall.
- [06:27]
A
It is, but still, there seems to be a lot of malcontent, a lot of despise from the OG crypto crowd. I mean, you've talked about decentralized finance for decades. It doesn't get more centralized than this. I mean, one person at the head of the Western world, I mean. Yeah, it is what it is.
- [06:48]
B
So, Mikkel, on top of this, we got TikTok news yesterday, basically, right? And I think a lot of people fear Trump's relationship on the trade front with China. And then we suddenly got this slightly more almost conciliatory news around TikTok and some sort of deal being brokered between Xi and Trump on this. How do you read that from a geopolitical perspective?
- [07:16]
A
This is very, very interesting and potentially also very telling about the Trump administration coming in. Because we've had all this animosity US in China. President Biden has done nothing to, to ease that conflict, on the contrary. And now we were of course expecting Trump to, to, to hit the gas pedal even further in that direction. But it seems like Perhaps this whole TikTok debacle, which has now been banned in the U.S. the potential of some sort of joint venture, shared ownership between US and China, might actually be some sort of Trojan horse or a way to open negotiations and talks with China from a tech standpoint. So I'm sure that the whole classic military industrial complex still holds all their skepticism about Dealing with China, they still want the US to have strategic resilience and all sorts of areas, but this could open a new wave of tech to tech diplomacy. So tech guys in the US Talking to tech guys in China. The tech guys in China are much further away from their government, but that might change. And could this be an opening to, to much less hawkish Trump on China? That's, that's the interesting part. There's still a lot of issues to be ironed out. I don't think Taiwan is a huge issue. I don't think Trump really cares about that. There's the discussion of the value of the yuan and the value of the dollar. I don't know if they can reach common ground on that. That could be a, an ignition to this conflict as well.
- [08:44]
B
But, but I still think, Michael, that, you know, Chinese authorities, they need a weak dollar to be able to stimulate the economy more. And that's kind of been my base case, even though I've been, you know, back and forth on this tariff topic quite a few times. And it's, it's been annoyingly difficult to forecast the next step from Trump on this. All I can say right now is that by the looks of it, it seems like Donald Trump intense on feathering his own nest. I think that's the best idiom to use here. And if that's the case, he'll pick a much less aggressive stance towards China as well.
- [09:27]
A
And one further point, if Trump can get this fixed within a couple of days, bring back TikTok. That's a very.
- [09:34]
B
Yeah, but they're already bringing it back, right?
- [09:37]
A
It will seem like I got inaugurated the next day. TikTok is back. Not a bad look. In any case, there are some thoughts to the Ukraine conflict as well. Just one point here, because a lot of people are discussing, oh, could they make a grand bargain and can they agree on this? Essentially, China wants, they don't want Russia to lose, but they don't want Russia to win either, because the more Russia win, the harder it is for China to control Moscow. So they want Russia to kind of win. The US Obviously don't want Russia to win, a complete win. They wouldn't mind if Russia lost, but that's out of the question. It's not even a topic in Europe anymore. So they are more or less on the same page that the middle ground needs to be found in Ukraine. The Trump proposal for peace, that's sort of the working document right now, is essentially the same that the Chinese proposed two years ago. So I think on Many of these topics there is, there is a way forward for, for U.S. chinese relations. Then we'll have to see about the currencies. But that's also a topic for another day. But very, very interesting signals so far. So Andreas, the inauguration, inauguration in about four hours time. Let's just wanted to show this obviously some odds on what's he going to mention only 43% on crypto Bitcoin. It would perhaps be a bit much for him to address this Trump coin.
- [10:54]
B
Directly but I don't think he'll do that.
- [10:57]
A
Could spike another rally if he's interested in that. Very low on dogecoin seems to be a little bit out of the picture here. What's your take? America first seems to be the favorite here. What do you expect overall from this inauguration speech?
- [11:13]
B
You know I think it will be crypto focused. It's crazy to say but.
- [11:21]
A
It kind.
- [11:21]
B
Of has to be given what's happened over the weekend. And Eric Trump has been incredibly active this morning. European time on Twitter kind of hinting at something big happening today in the crypto space. Could be a Baron coin by the way. Yeah, it's a tall coin but anyway, you know it will probably be a part of that speech. You know that would be my best guess. I think, I think he'll stay away from over promising during the speech. But in any case this is the defining moment for crypto in many ways for good and for bad. Let me put it like that again.
- [12:10]
A
Yeah, I agree completely. I think my view on this speech is that first and foremost as far as I understand it's going to be a different setting than the usual one. It's going to be held inside because it's too cold. We I think we've had one or two US Presidents die of pneumonia that they contracted on giving their inauguration speech. So they that considering his age that might not be and you had pneumonia a couple of weeks ago so you can attest to that. I think he's going to be talking about this golden age that he is he's been talking about. That might sound like a sort of maga. What does that actually mean? I think there is some merit to the view that Trump is viewing the next four years as a peak period that we he's not necessarily planning planning policy to create or to work in 10 or 20 years time. This is the period the next four years or perhaps a little bit longer is where things need to work which again speaks to lower interest rates etc.
- [13:01]
B
We'll see.
- [13:02]
A
We're making guesswork here.
- [13:05]
B
Yeah. So, Michael, for the weeks ahead, we have some odds from the poly market as well on.
- [13:10]
A
Let's pull these up.
- [13:11]
B
The bitcoin reserve on non tariffs. Right. So if we start with the bitcoin reserve over the next 100 days, what, what are the odds that the U.S. treasury will actually buy Bitcoin? And it's priced at 50. 50. Right. Over the next hundred days, you know, if you look at the next seven days, it's priced at maybe 15% probability of them buying something. So, you know, to win in this bet, they need to buy bitcoin. It's not the announcement they need to buy.
- [13:36]
A
Yeah.
- [13:38]
B
And I don't, I don't consider it unlikely that they buy over the next 100 days. I think it's much more likely than what's priced in here, especially given everything that has happened this weekend then on tariffs. Right. So the base case is ish, that something will happen on tariffs with regards to China this week. If we listen to Scott Bessant and Stephen Mirand on those parts, parts of the administration will likely get some sort of gradual steps towards higher tariffs on China. Then on the other hand, I kind of agree with that 60% probability. I think that's fairly likely, maybe a bit higher. But then on the other hand, the market is basically fully convinced that nothing will happen on Europe, nothing. Especially on the UK and given the back and forth between Elon Musk and Keir Starmer, I wouldn't rule out that they have something in store for the UK to be honest, because this whole idea that the UK and the US is an unbreakable alliance, they, they're not even able to talk to each other right now. I mean, they're calling each other pedophiles.
- [14:46]
A
Yeah.
- [14:47]
B
Is, is that a good, you know, common ground for, for a benign trade policy? Not. Absolutely not. No, it's not. And so, you know, that is the most underpriced risk out there that they do something on the uk in my.
- [15:00]
A
Opinion, it isn't the first week. That's why I think.
- [15:03]
B
But still, but still, yeah, no one expects them to do anything on the.
- [15:07]
A
Uk you also have to consider, as we've talked about, if we presume that tariffs are mostly negotiation tool, which third parties, which countries is Trump going to have negotiations with? And he is going to have negotiations with the UK and European Union in, in NATO. So it might not be in the first week, but, but, but, but I'm sure he will put this up. If you don't pay here, you can pay Here, that, that sort of logic. Just to get back to the bitcoin part. I mean, I know this is not, this is a polymarket, give it whatever you want, but this is priced in to some extent, at least to a 50%.
- [15:42]
B
Yeah, sure, sure.
- [15:44]
A
So he has to do something. Unless, unless he wants to pull bitcoin down massively.
- [15:47]
B
He has to do something and he will.
- [15:50]
A
Yeah, okay.
- [15:53]
B
Will he buy Greenland? Miggle? Will he mention Greenland? You know, sitting here in the kingdom of Denmark. It's our fucking island, you know, so.
- [16:02]
A
We'Ll have to get my gosh, it's something in return. It's an ongoing case. I think, as we've mentioned before. I think this, this is an idea that, that's born way before Trump entered politics. It's been a dream or a requirement for the US Military. And it's, it is first and foremost a military question. Let's not forget that strategic perspective. Trump has so sort of seized this idea and is running with it because it looks to him like an easy win and it might be, it's getting a little bit more complicated now. The Greenlandic leadership has, it's, it's dawned upon them that they're being bandwagoned a little bit here by Donald Trump. They thought they could go for independence and then have that pick between great powers. That's very clearly not the case. They can absolutely not make any dealings with China. At least Trump has gotten that message out there. But address, we talked about this a few weeks ago. How on earth do you trade this? Because there's not really a huge Greenland stock index to, to trade. You found a way.
- [17:00]
B
Well, yeah, it's an Australian listed company, formerly named Greenland Mineral Resources, something like that. It's listed under the name etm and you know, it's, it's actually been on the move, especially after this Trump presser on, on Greenland. What you should know about this case is that the company is currently stuck in a court case with the Danish authorities because essentially the, well, the people locally in Greenland, they, they refuse to mine uranium. And this, this was one of like the biggest, better parts of the project they have in Kvanafjella and the very south of the island. And for now it's basically stock and cord. So I guess what we're seeing here is some sort of repricing of the probability of them being allowed to extract uranium from the ground. And you know, what's the end game here? It looks relatively cheap to where it traded back in 21, but it also requires some sort of Change of leadership or change of ownership if you want, because the Danish authorities, they will not allow them to do so and they basically, you know, they stand very firm in this court case. So if we get a change of, you know, leadership or ownership of Greenland, this is a big case. If we do not, it's not a case at all.
- [18:34]
A
And that's also what's frightening to the Greenlandic people, because it's mostly the locals who have refused this mining. And that's one of the four problems with mining in Greenland. One, it's cold as fuck. Two, you've got no railway. Three, you've got no local workforce and for the locals don't want you to mine. So those are quite big obstacles and they found themselves in a, in a horrible case. So I have quite, quite a lot of sympathy for this company, actually. They invested quite a lot and then were rejected the right to, to, to start digging, essentially. So let's see a way to, to, to better the Green Landing case. Okay, Andres, what's happening beneath the hood of this economy? If we set Trump aside, there is still an economy going on there. People are buying and selling stuff, getting jobs, getting fired. So let's try for a minute to cut Trump out of the equation and have a look. Things are boiling in the Middle East.
- [19:25]
B
Yeah, maybe let's start with that, Miguel, because we have the oil price on the screen right now and it broke out of this very narrow wedge pattern, was it four or five weeks ago. And it's been trading very, very bit ever since. And I think we're now approaching some sort of pause level. I'm actually involved on the short side in this trade and in my opinion, the geopolitical risk premium is fading. It's a good example, what you mentioned from Israel, Gaza. There's a potential scope for a broader deal in the Middle east now, in my opinion. I'll get back to it in a second. And with oil prices trading, say $10 higher, ish, there's a pretty decent incentive for OPEC to start producing a little bit more now, which is the back and forth we always have to consider in oil markets. As soon as oil prices go up, OPEC can produce a bit more without harming their bottom line, basically. So I think that's where we're at. But this deal in Gaza, quite the scenery down there. Mikkel, what do you make of it? Is this part of a broader deal?
- [20:37]
A
It could be one of the first steps. I mean, we've had talks over a ceasefire for months, for years now. Why now, well, obviously it's linked to the inauguration. I think Hamas was maybe judging that this might be as good a time as any to strike this deal. But it's also a question Israeli internal politics, because Israel have given quite some concessions here. They're withdrawing from central Gaza. They're lending out a lot of hostages, a lot of controversial or non hostages, prisoners, Hamas fighters who they're taking prisoners, they're exchanging for, for, for hostages. And this has led to a breakup of the Israeli government. Essentially, you, you can't rule out an Israeli election within the next couple of months. So Netanyahu must feel safe enough that he can win an election. And that's been the, the big problem for him ever since the October 7th attack, who were widely criticized for that catastrophe. So this points to me that Netanyahu is feeling more safe. He feels that a new election will bring more options to put together a new coalition. The right might not be as strong as we've thought it to be. So far it's been Greer and the ultra nationalist camp who have blocked the ceasefire deals. So this is a power grab by Netanyahu. He might be forced to, to do a snap election. That's not too uncommon in these parts. But that's going to be really, really interesting. If Netanyahu is strengthened in his position, that might just be what we need for broader negotiations. So, yeah, extremely interesting, Extremely, extremely interesting for oil prices. I see a lot of indicators also, potential dump, Trump deregulation. That could add to the supply picture. Then we'll have to see what happens with demand, especially out of China. That's another factor that's sometimes overlooked a little bit.
- [22:24]
B
But, but you know, one thing is that we've technically broken out of this wedge pattern in oil, which is a bullish flag in many ways, but it's also very linked to the fundamentals. And you know, as per usual, we run these daily scans across real time gauges for growth, inflation and liquidity. And it's actually a very uniform picture across the globe right now. Miko. So maybe let's briefly run through these models. If you want access to these models, you can find them on real vision on an ongoing basis as soon as possible. We're basically working on a solution there. So I said as soon as possible.
- [23:03]
A
Right.
- [23:05]
B
But let's take a look at the US first here.
- [23:07]
A
Right. Because we had a question on equities and nasdaq. That could be a good way of answering that. Yeah. So the US Macro regime model on the screen right now. Andres.
- [23:15]
B
Yeah. So up up, up, liquidity, up, growth, up, inflation, up. That's the short answer. And we've had a crystal clear up, up, up regime just a few years ago. 2021. I think it looks very reminiscent of that in our models right now. I've had long discussions with Raoul whether this looks more like 2017 or 2021. I'm in camp 2021, but but in any case it's pretty bullish. So in an up, up, up regime and this refers back to the question on Nasdaq, I'd actually prefer stuff like materials industrials, energy stuff linked to the fiscal production cycle is very good here alongside crypto. But NASDAQ is not necessarily going to be the best performer here. And my bad, we traded Nasdaq a little bit on the short side. It was initially a very good idea this year, then it made a decent comeback late last week. And you should see it as a symptom of our models suggesting that other sectors will do better than Nasdaq. It's not a bearish scenario, it's a bullish scenario. But other sectors thriving better in an inflationary scenario will do better in my opinion.
- [24:37]
A
What's the time scope for this analysis address?
- [24:40]
B
Well, for now it looks like a very, very solid trend. Right. So in my opinion it looks like it's something that will set the trend for most of this quarter unless Donald Trump does something to alter this picture, which is obviously tricky to forecast. But that's why we are trying to cut through the noise here because it's actually predicting what's going on. Despite all of the back and forth.
- [24:59]
A
From Trump, there's still an economy going on.
- [25:01]
B
That's it may be more important if you move to China.
- [25:05]
A
That's it.
- [25:08]
B
Inflation is starting to re accelerate in China, admittedly from non existent levels, but it's accelerating now. Growth is picking up a little bit, liquidity is picking up a little bit. And you're starting to see Chinese equities doing better. You're starting to see iron ore, copper, stuff like that. We were thankfully very early in these trades doing much better. So this whole classic cycle discussion is clearly leaning towards an acceleration even in the goddamn Eurozone, which is basically the almost the definition of something that cannot accelerate. But even a turtle can run. And the turtle is starting to run here, both in inflation terms but also in growth terms while liquidity is still on the floor in Europe. But I think it's also important to notice that the inflation now cost is on the rise most places. Yeah. At least down the line. It could be something to worry about and for now, and even I haven't had any super block trading fixed income the past few months. But I'm not convinced that there's a green light to buy fixed income yet because of, of the patterns we see in inflation here.
- [26:30]
A
One joker here in European inflation is the Red Sea crisis. Because we are yet to see whether the Houthis will stop attacking or declare that they won't attack international shipping through the Red Sea, that in itself won't matter. But if shipping returns to the shortest route to Europe, that should ease the inflation pressure a little bit. Might be some months away. We'll have a, we'll keep a lookout for this. But that is obviously the big, the one big stone in the shoe still in the Middle East.
- [27:04]
B
Let's conclude with a few technical charts and what really good right now. So here we have Bitcoin and you know, it's probably the question I've received the most today. Can we go far beyond all time highs after this inauguration speech, should we get a bitcoin reserve? Where are we going? And if you look at it technically, if we break the current Fibonacci level, I'm not a big Fibonacci fan, but that's, you know, it actually works for, for the current setup we're going to 130k. You know, that's, it's, it's, we've got thin air above. You know, I think it could be a very fast move if we actually, you know, we need something fundamental to bring us there obviously. But you know, a bitcoin reserve could be that fundamental tailwind. So I think we need to be very vigilant for a big move here. At the same time, if you look at Solana, you know, it's, it's obviously been trading exceptionally bit through the first hours of the Trump coin trading. It's been less of a good story today. But in any case it looks very compelling technically. And then Ethereum, let's not mention that the one that I've invested the most in, I think we've got China on the screens now. But that's good. I left Ethereum out because. Yeah, it just feels, it feels like a pity talking about it. You know, I feel sorry saying it since I'm, I'm personally, personally invested in it. So, so China. I just wanted to mention that also given our now costs, right, this is Hang Seng and you know it's been in a downtrend since this massive spike after the first stimulus wave back in September, October but it actually looks pretty compelling again now. And one thing is the technical outlook as we have on the chart here, but also given that inflation, liquidity and growth is picking up at the same time. The UP regime in China, it's not bad for iron ore, Copper, Hang Seng, etc. You know, Trump can obviously pull the rug from under this trade, which is why I'm a little bit hesitant joining it in equity space. But why not?
- [29:18]
A
Especially if we don't get any new China terrorists. That should be a network.
- [29:22]
B
No news is very good here. Very, very good. And final chart. Mikkel, this is Europe technically and German dax. Yeah, it's German DAX index. We've been involved in the German and French trades, etc. Since I think it was back in early November. They looked compelling in our models. They performed well. Europe actually outpaced the US for quite large periods between November and now. But I'm not as convinced about the technical and fundamental return outlook in the very near term in Europe. So that's one of the places where we actually consider withdrawing some risk. If we get possibilities in terms of adding risk towards China and proxies and Bitcoin, some of the sectors in the US really well equipped to deal with inflation and growth going up at the same time. Financials, industrials, materials, stuff like that. So this could be one area to remove some risk, to add some risk elsewhere.
- [30:27]
A
Very interesting, Andreas. That's all for today, folks. Remember our pro macro talk with the role tomorrow. You can still get in and subscribe in time to get that, we'll dive much deeper into both crypto, fixed income and a lot of other topics. Very depending on what happens later today, of course. So be sure to tune in for that. Check out the Real Vision app for all your possibilities and thanks for the questions and thank you all for joining. We'll be back next Monday.