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- [00:00]
A
New week, Big moves. You ready?
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Andreas on the data maker on the floor. Turn the headline into trade. You can know from yields to inflation, every chart, every trend. Get the story. Get this set up. From the open to the end. They try to be as actionable and as honest as possible. But keep in mind that their predictions might be sometimes maybe good, sometimes maybe good. Sometimes maybe sometimes maybe. Summertime it may be good.
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Summertime it may be.
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It's Macro Mondays. Big picture clear play. Stock bonds, fx, crypto on the way. Get context Strategy right now on your screen. Macro Mondays. Level up your week.
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C
Hello out there. Welcome to Real Vision. Welcome to Macro Mondays. We're sending you to you right on the back of the Easter holidays here. And as you can see, Andreas is with me as usual, not from the usual Copenhagen office. Andreas, you've set up new office to the south of Europe. It looks really, really nice where you're at. Although you're wearing the same suit, the, the same shirt that you would have been in Copenhagen. But where, where are you and how are things addressed? Start there.
- [01:35]
A
Well, I'm currently monitoring the situation in Greece, so I can add that's the reason why I'm looking to the side here because we actually have the American base just to the right of me and it's not like we're trying to emulate Citrini research, who actually brought boots on the ground in the region.
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C
That was really cool, by the way.
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A
Yeah, really good work by them. But yeah, I'm watching the American base here and as per usual, we Europeans, we're not willing to sacrifice anything at all. We're just chilling while everything's unfolding.
- [02:09]
C
It looks that way. Andreas, it looks wonderful. You're in sonic fried. Yeah, apparently for work, not holidays. You're, you're, you're monitoring the situation in real life. So you, you'll probably be able to write off the plane tickets. We'll have to look into that. But anyway, very, very glad you could join us here. We hope the, the connection sticks. As I understand you're on a mobile connection wi fi. That's, that's typical for south southern Europe that the, the 5G connection is, is often much better than, than, than the, the, the actual broadband connections. But anyway, let's hope it stick. For the show. We have a lot to, to talk about. Tomorrow is power plant day and, and bridge day. Apparently we'll dive much more into that. We'll, we'll take a closer look at some of your and our. Takes. Andreas on the situation in the straight and the the war and if we can can in any meaningful way pull those two apart and look at it, we'll get back to that. Andreas, we have a great week for you as well on Real vision tomorrow at 11am we have Roland Julian's ask me anything was supposed to be last week. It's going to be tomorrow at 11am Eastern. That's for pro members, for RV Connect members. We have the Connect Portfolio update by Joe Bland coming up on Thursday and obviously we haven't addressed my three usual flagship reports. The standard signals should be out momentarily later today. I'm releasing the drill on Wednesday. Looking obviously this situation in Iran, the aftermath of the expected power plant in bridge day and potentially also looking into some of the more interesting developing stories out of the political landscape of Europe, both Hungary, Germany, et cetera. And then obviously we have our portfolio update on Friday where we wrap everything up and show you what we do in our portfolio. Now remember Andreas, I almost feel bad for posting or for playing our usual disclaimer because things haven't been too good for Gennaro Gattuso, our good friend. But anyway, remember that we try to be as actionable and tradable as possible. But our suggestions might be sometimes maybe good, sometimes maybe. There we go. Sometimes maybe good, sometimes maybe. Things have been very very shit for Genata 2. So in these past weeks. Italy obviously missed the the World cup this summer in the US we are on to address I'm I'm working on on pitches on why we should boycott the the World cup now that we're out of it. I don't think we have any any sneaky way of getting into it. I think maybe it sneaky way into it. I think Georgie Maloney is in a much better position for that than we are. Unless we give up Greenland maybe. But let's not hope for that. Andres before we get to power plant day, I just want to show you another truth by Donald Trump which I actually really really like here. The I want to get your take on the bad and very boring singer Bruce Springsteen. I don't know if you saw this truth, but this was in my opinion back to peak troll Trump in the midst of a complete energy crisis, a major one in the Middle East, Donald Trump writes a complete rant on a singer Bruce Springsteen. He's obviously a big name. He's obviously suffering from TDS apparently. But this is top level trolling in my opinion. Address a dried up prune suffering from a really bad plastic surgeon. I'm picking up a lot of very, very Good phrases here. I don't know what's your opinion of Bruce Springsteen address?
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A
So I wasn't prepared for that question. But the worst festival experience I've ever had included Bruce Springsteen Muscular Festival, the biggest festival in Northern Europe booked Bruce Springsteen probably 10 years ago by now and they spent all of their budget on Bruce Springsteen. So it was crappy, crappy, crappy lineup outside of Bruce Springsteen. And I don't like Bruce Springsteen either. So he ruined my latest Ruskin Festival. So I'm actually on Trump's team here.
- [06:07]
C
It's interesting in Denmark, it's sort of a rite of passage for center left politicians. They must like Bruce Springsteen or else they're not accepted into government. That is what it's like. They have to attend at least one concert. So there are some political angles to this. But anyway, Andreas, this was just to point out that sometime Donald Trump posts something that we like and we will praise him for that because this was top level trolling in my opinion. But address, let's get to it. Yesterday we had this apparently new deadline. Some people thought of it. We always knew it was Tuesday, that Tuesday was going to be the, the power plane day, the bridge day. This was made even more specific. 8:00pm that's probably where people should head to the shoulders in Iran if a deal is made. And obviously it's building on this very, very controversial tweet by Donald Trump that Tuesday will be power plant day, bridge day, all wrapped up in one in. So essentially Donald Trump is losing patience with negotiations. He's trying to amp up the pressure as we've seen before, maximize the leverage. And we are seeing reportedly some very, very frantic attempts at ironing out a ceasefire before this. I think it's quite possible that we will see something or at least enough to maybe push the deadline one more day, one more time. People keep telling me that this time he cannot push the deadline again. Why not? This is the 180 guy. I'm sure we can get there. So on one hand, Andres, we have this culmination point that we've talking about. It's getting clearer, it's getting nearer. I've talked about, you mentioned the US aircraft carrier in Crete, that it took a detour to Croatia. Now it's heading back to the Gulf. Apparently a little bit to my surprise, the US is building up forces for a culmination, for an escalation and it might happen. The big question is, Andreas, does this even matter for markets?
- [08:04]
A
I don't think we're at the point where it doesn't matter. But interestingly, we've seen pretty decent price action maybe a week in a row now. We had a much better end to last week than we've had in prior weeks. I've also noted how we've seen momentum behind a lot of bilateral deals, actually not even involving the US the biggest one came over the weekend with the agreement between Iran and Iraq on oil flows, which is a major deal. Let me just try and give you a sneak peek into what that deal entails.
- [08:43]
C
We can get the shot up here.
- [08:44]
A
Yeah, yeah. First of all, I wrote a very contrarian story on Friday, and I published parts of it on X and LinkedIn as well to see the kind of feedback I would get. And it's probably the most contrarian take written on oil at all this year by anyone. And my inbox has been absolutely on fire since I released this one. I mean, as I tweeted, let the insults begin. And I've had so many insults that I've stopped counting them. The interesting thing here is that it's the kind of setup that reminds me a lot about what happened in, say, for example, silver in January of this year, where if you tried to tell people that silver wouldn't go up in a straight line, everyone would call you an idiot. It's the exact same thing happening now. If you try to tell people that there's actually a path towards a more balanced oil market, everyone tells you you're a moron. So let's try and have a look at the numbers here, because I actually don't think the oil math looks that bad. In a matter of a month, roughly since the war began, we managed to bypass the Strait of Hormuz in roughly two thirds of the cases. So 2/3 of the flow that left Hormuz, we now get those flows from elsewhere, either by pipelines via, you know, storage releases. There are several ways to mitigate this issue. Meaning that out of the 20 million barrels that left the Strait of Hormuz on a daily basis before the war, we probably only need to replace, say, a handful of those maybe 6 million barrels a day now to get back to where we were. I know some of these solutions are pretty short term, but anyway. And this deal between Iran and Iraq accounts for roughly three and a half million barrels a day. So I mean, we are even ahead of that very, very, very optimistic schedule that I released on Friday. And that makes me pretty upbeat on behalf of markets, even though there is a pretty decent potential for a clusterfuck in the region of some part of My French. But it looks like that risk is on the rise. Right. So it's been amazing to follow over the weekend, the amount of momentum behind these bilateral deals. I mean, it's also pretty obvious now that Europe is talking directly to Iran on some of these shipments. So what do you make of that? I mean, it also makes it pretty clear that the U.S. you. Yeah, hostilities, they're on the rise as well. I mean, it seems like the relationship between Europe and the US Is as bad as it ever been, more or less. Sorry, that's probably overstating it, but Absolutely, absolutely.
- [11:48]
C
It's horrible. As I discussed with Michael Pappage, and I encourage people to go see that show. If you're Real Vision subscribers last week, I think even if we get past this, even though Donald Trump didn't pull the US out of NATO last week, it's more or less already done. I mean, the security guarantees have been put into question. And the big underlying problem is that for the US the main enemy is China. For Europe, the main enemy is Russia. And it's very, very hard to maintain such a dominant alliance if you disagree on who the main target is. So I agree with you on the US European relationship now. It's very, very hard currently for Europe to navigate the flow of messaging out of the White House because last week or last week we were told, go get your own oil. Which makes a lot of sense. The messaging was, the US doesn't really care about the Strait of Hormuz. Go get your own oil. That's what we're doing. A French tanker called the CCMA cgm. Creepy. Passed the Strait this weekend under some kind of deal with Iranians. Is that doing deals with the devil? Yes, sure. But we were told to go get our own oil. There are two ways to do that. Either you force your way through militarily or you pay up. That's the way we get our oil. So that is one of the solutions. And I have to say I'm probably even more upbeat than you on this because what I'm seeing is that we've had elevated oil prices for four to five weeks now. When you have oil prices above $100 for four to five weeks, people begin to get really, really, really creative. And that's what we're seeing. Every little bit of oil, every drop of oil that can be squeezed out somewhere in the system is getting squeezed out. And it doesn't take too much to get back into manageable levels. You had the Iran Iraq deal. That's going to be slow to ramp up. So we're not going to maybe see those 3.4 million barrels right away, but it's getting there. You have some Omani ships having taken a different route closer to, to the Omani shore. That's going to, that's probably not going to be able to take the big tankers again. This is very, very, very, very slow. But maybe, Andreas, maybe the rate of change is what matters. We are seeing more and more ships. There's no way around that. We're seeing more and more ships, 21 ships this weekend, on April 1st, one of the biggest days we had 16 ships pass through. That's only 10, 15% of what we're used to. But it's better than nothing. And if it's improving, if the rate of change is improving, sometimes that, that's, that's what matters for stock markets. And I want to bring up, bring up this chart briefly that you also post in your sternal signals on the stock market bottom during the COVID crisis. What's the analogy here, Andreas, or the comparison?
- [14:29]
A
I actually think there are two important analogies. One is what you've rightfully labeled the Fauci Syndrome. I mean, a lot of the pundits very invested in this doomsday story about scarcities in energy, space, et cetera. They'll have a hard time pivoting because first of all, they've invested themselves more or less in this narrative that will run out of fuel. And on top of it, it also seems like it's the one that sells the most tickets at the moment, if you know what I mean. It was also the case for Fauci. It was very difficult for him to pivot because he got a lot of airtime out of his Doom 2 port. It was the same with viral gists all over the globe, basically. So I actually think there was a comparison there. It makes it a lot more difficult to pivot when you've told people that it's the end of the world, as a lot of the energy pundits have told us around Oil beer. Having said that, I remember very clearly this spring of 2020 and how difficult it was to convince anyone of this rate of change story and the impact on markets. It was also the case during the worst of the Liberation Day aftermath in the spring of 2025. But as soon as you see sequential progress being made, the market starts to look at a medium term horizon instead of a short term horizon for good reasons, because we can obviously look through a month or two of disruptions if the medium term outlook Improves a lot. And it seems like the medium term outlook is improving now, which is the exact opposite of the first week of the war where the medium term outlook was worsening while the flow was actually okay ish if you look at it in product terms. So we'll probably have a few weak months in terms of the actual end products. But as long as we see sequential progress, we can look into the medium term outlook with increasing optimism. And therefore I am still of the view, as I also wrote explicitly last week, that we bought in risk assets and I think we're very close to peaking in oil as well. I'm a little bit more in doubt on some of the byproducts. We've, we've been talking about helium sulfur and stuff like that for, I don't know, four or five weeks now. It's starting to become a little bit consensus to talk about that as well. I've seen so many LLM written substacks on the topic that I've lost count. Most of them are completely wrong by the way. So that is one thing that we've learned from this crisis as well. Once you see an exogenous shogunate, I just want to get that out there. Nickel. Once you see an exogenous shock, and I'm partially guilty of it myself, a lot of people just ask ChatGPT or Gemini, whatever, please unfold this for me. While there is no one to one historical comparison to use, so the model just hallucinates. The stuff that I've seen written on sulfur, for example, that will run out of copper as a consequence of sulfur not leaving the straight is 100% bullshit. I mean, I mean when you look at the numbers, it's probably a couple of percent of the world sulfur market that goes to mining and for the miners it's probably less than 0.5% of their cost base. So it's basically a complete nothing burger when you look into the numbers. But it's been highlighted by many that it will end up creating shortages of everything from copper to by the end of the day, semiconductors, everything we need for the AI buildup, etc. And I think it's all over. It's only blown out of proportion by now, especially by people who use artificial intelligence as if it was the truth and it's obviously not. So for now I also stick to my view that artificial intelligence, every time there's an exogenous shock to the system, artificial intelligence becomes artificial stupidity. End of discussion.
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C
So this could be very, very famous last words. Andrea Steiner sitting By the pool in sunglasses, telling everyone that this is over, we're out of the woods.
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A
I need a cigarette now. I need a cigarette now.
- [18:48]
C
Absolutely. This is very, very Euro of us. But address. Let's just talk a little bit more about the short term risks and then we'll get back to what the medium term actually looks like because there are still risks. Sure. Trump is telling us that he's going to commit possible war crimes tomorrow. That's a whole different discussion. I know international law doesn't really matter anymore, but I mean, bombing bridges is not inherently a war crime. It's not automatically a war crime, but it's a war crime. If there's no military use for bridges and if you're not waging a land war, why do you need to blow up bridges? That is something that the US military needs to consider for itself and I think it's part of what drove Pete Heth to oust the Army Chief of Staff Randy George last week. There's probably also a lot of other issues between the two, but I think, I don't think we're going to see mass attacks and power plants on bridges tomorrow could be wrong. Absolutely. But I think it's, it's, this is a matter of really, really squeezing up the pressure before some kind of ceasefire is reached. And that could be the onset of this, that, that could be the, the, the, the confirmation that we have. But obviously a big risk. Donald Trump is threatening to, to blow off power plants and bridges in Iran tomorrow. So it is with some risk if you go all in on markets right now. But, but, but obviously the worst thing to do in markets is, is to miss the rallies.
- [20:23]
A
Can I, can I say one thing on the short term risks? Because I'm not blind to the fact that quantity markets are priced at the margin. Right. So the last barrel of oil is basically the barrel of oil that sets the price for the rest of the market. Right. And therefore I think it is likely that we will look into a month or two where we'll see rationing across countries with a weak supply chain. A lot of EM countries already suffer. I'm pretty upbeat that we don't see any rationing here on Crete yet because Greece is certainly not self sufficient on anything energy related. But I think it's likely that we'll see some centralized plans out of the European Union as well on trying to bring down the energy consumption for a month or two to see if we can get through this. And as I've said numerous times, it is hard to claim that You're a sovereign state without control of your own supply chains in this current environment. Right, which is exactly why France needs to, to humiliate itself in the way that it's doing in my opinion, by, by basically just jumping. They jumped ship in a sense geopolitically as a consequence of this, you could say. But they need to. Yeah, they need to.
- [21:40]
C
They went and got their own oil as Donald Trump told us to. If Donald Trump told us to go get our own oil, that's what we're going to do any way we can. And yeah, if we have seen the bottom and markets can begin to look ahead to the medium term, what does the medium term look like? Because we've been over this over the past few weeks. Because even though, even if we can see light at the end of the tunnel, we're still seeing already and expecting a massive inflation wave, especially in Europe, maybe in Asia, maybe less so in the US Impact on central banks. What does the medium term look like from a business cycle perspective?
- [22:22]
A
I still think the conclusion that the US will get out of this in the best shape is the conclusion that is valid. If you look at the shock to the business cycle, it's almost an ocking burger for the US cycle as it is right now. The sensitivity to energy prices is incredibly low in the US you could even argue that parts of the country, the country actually accelerates if energy prices go up because they're on that exporter of everything now. So I don't think this is a big deal for the US business cycle. It is a big deal for the European business cycle. It is a big deal for the Asian businesses. So in that sense I'm very happy that we have most of our money parked in the dollar market and I think we'll remain heavily focused on that for the medium term to see if we can exploit the US business cycle rather than the business cycle in the rest of the world. I actually think this is probably the best thing that could happen to the US equity market on a relative basis to the rest of the world. Because the US equity market has been underperforming for 18 months in a row now. And I think that underperformance will end.
- [23:36]
C
Absolutely interesting. If we look slightly longer term than this and also look at central banks in the situation here, do you think there's any chance of us returning to the cutting cycle or is that where this crisis will have the longest impact, you think so?
- [23:53]
A
Consider this. Sure. There will be an inflation. Right? I mean it's very obvious given what we've seen in energy space. But if we get a resolution or a ceasefire or whatever, Trump keeps telling us that, well, energy prices will come down as soon as I leave, which is mostly correct in my opinion. So it might be that we get a spike, but we'll also get a huge disinflation wave on the other side of it once this energy crisis goes from being live to being sold. So therefore there are kind of two phases in this. Some central banks would like to panic and hike into this immediate spike, but there's also the opportunity that we get a cutting cycle into 2027 once things are sold, because inflation will come down fast on the other side of it. So I think it leaves central bank a bit of a pickle because it's very difficult to time your response to a supply crisis like this, which is why I've repeatedly stated that I think the best thing you can do as a central bank is to do nothing during times like this. You don't need to cut either if you do nothing because you don't have any control of the situation. And the weapon of choice, which is typically the interest rate, is inefficient in dealing with it, because if you hike interest rates today, you typically impact the economy, say nine to 15 months from now. And at that point in time, you don't have any clue whether the energy price is over or not. It's probably over there. That would be my base case. So I don't think it's wise to deal with the current situation with interest rate hike. No.
- [25:42]
C
One final point, Andres, and we'll have to revisit this over the coming weeks. But one thing I considered over the Easter here is the geopolitical risk factor because people are telling me that, wow, we're heading into this is confirmation that we are in a period of heightened conflict and we're going to see elevated geopolitical risks moving forward. Well, and you know, Andres, I've been very, very critical of this operation from the get go, very critical of the execution, the strategy behind everything. But let's assume that we get some sort of ceasefire. It's not going to be ideal. It's probably worse than what Trump could have gotten pre war. But let's assume that the regime stays in power in Iran. That's not ideal. But again, it's not the worst case scenario because the worst case scenario was a splintered Iran. That's the absolute worst thing for the oil market. So let's say we have a still united Iran, we have a peace deal with with the US with Israel. That removes the fear of a wider regional conflict. It maybe enables the US to pull, pull back a little bit from the Middle east, maybe forces some of the Middle Eastern countries to, to deal with things on their own. And the risk you've always had attached to the Strait of Horus has now become material. It's like, it's like you had a lamp that was threatening to fall, now it's fallen. So does that increase the risk or does that decrease the risk moving forward? I mean again, I've been very, very critical of this war. I think it's horribly executed. But in some way this could actually decrease geopolitical risk by lowering the tension in the Middle east moving forward because you get some sort of security scaffolding set up that Iran is still in power. Iran are going to be making some money from the street of Hormuz, but then we know what's what. And sometimes that's, that's more manageable for markets than, than having a big unknown. We'll have to see how this goes. Obviously we, we, the war isn't over yet, so, so we, we, we, we have to get that done. But I do see some signs actually that this can turn out okay. Ish for, for the US and, and the world economy actually we're going to be feeling it in Europe, we're going to be feeling it in Asia, we're going to be feeling it on inflation, everything else. But yeah, there is some light ahead of the tunnel. Unrest maybe that's a wrap up for the, for the week.
- [27:57]
A
And one thing I can add there, I'm by no means geopolitical expert, but it strikes me that the geopolitical doomsters have told us probably five, 10 years running that China is on the verge of invading Taiwan. Yeah, but wouldn't they have done that over the course of the past couple of weeks if they really wanted to? I mean it was probably the golden window of opportunity. And they've done nothing in China except just sitting there. They're just sitting there laughing at the situation, it seems. I mean, so I think it has removed some of the left tail risks around Taiwan as well, this whole crisis. Because we would have seen some tail risks emerging here if it were true.
- [28:46]
C
Timbers, yeah, absolutely. And people have always been writing oh you can't move that fast and stuff like that. And China's never done that. They did exactly that during the Cuban Missile Crisis when the US and the Soviet Union were occupied with potentially fighting one another. They invaded India essentially. So it has happened before. They know how to do that and they chose not to for various reasons. So I agree with you completely, Andreas. But again, let's see. We might be completely off this. It might be too early to. To to count the chickens here, but we are seeing some light ahead of the tunnel. We have some unmistakable evidence that the straight off remove situation is to some extent being solved gradually, slowly, tit for tat, incrementally. Every phrase I can use here. We are seeing that. So. So let's hope we can keep this on a positive note ahead the of again for for next week. Andreas, thanks a lot for joining us even from from the vacation home in Crete. It's looking wonderful, so I'll leave you to it. We'll be back next Monday back here in windy, cold Copenhagen, I'm sorry to say. But it'll be good to see you again. Address Any final remarks from the Sun?
- [29:57]
A
No, I think this analogy around the current environment being very reminiscent of the spring of 2020 is pretty accurate. And we'll have to see whether it takes days or weeks to get the market to fully buy into it. But I think we're moving in that direction.
- [30:16]
C
It's the invisible hand at the end of the day. Anyway, Andres, great to see you. We'll be back next week. Follow our articles throughout the week and remember to tune in from Roland Julian's Ask me anything tomorrow, 11am Eastern. Thanks for tuning in. Thanks. Thanks for all your questions. We'll see you out there.