Macro Monday: Making Sense of Trump's New Tempo ft. Andreas Steno & Mikkel Rosenvold

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1:38Hello, everyone, and welcome to the weekly edition of Macro Mondays. My name is Mikkel Rosenwald, and I'm very delighted to be your host once more. And with me, as usual, from our live studio in Copenhagen, you, Andreas. Welcome to the show. Thanks, Mikkel. Good to see you. You too. So I was struggling a bit to find topics to talk about today, Andreas. Not a lot going on. What a weekend we had, Amanda. It's incredible. I mean, we have tariffs coming up tomorrow. Huge decision on tariffs. And that's hardly even on our agenda today. It's incredible what's going on. It's a whole new tempo, this Trump era, I have to say.

2:18Yeah. And thankfully, we're not recording this show on a Friday, airing it on a Monday as we do with our Danish edition of this show, because we always have to redo it Monday morning ever since Trump took office. So he's keeping us busy. Yeah, keeping on our toes. Absolutely. So remember, everyone, thanks a lot for joining in. Remember that this is our weekly sneak peek into the macro world, sneak peek into the analysis and research that we do, that we publish both on our own website and on Real Vision. So check out Andreas' flagship piece every Sunday and all our other research, including the piece on everything that we tell hedge funds.

2:55We get a recap of that every Friday. sign into Real Vision's Pro Macro offer. Really good value for that. And also just while I remember, Bert Andreas, people should check in your State of the Union tomorrow. What's to expect from that? Well, one big victory lap actually for once. I know I'm kind of kidding, but Europe has been a tremendous bet for us. We can talk a little bit more about why, especially after what happened in the White House on Friday, But it seems like stuff is moving in Europe for the first time in a long, long while. I just noticed today, and I know you've brought a couple of these headlines with you today, make them tweets.

3:37I think we got like three or four headlines from Eurozone politicians stating stuff like, we're going all in on self-driving cars. And I was like, is this, like, is it a sketch? What's going on? You know, we've never heard stuff like that from politicians here. And all of a sudden, it seems like we're forced into taking a lot of proactive, growth-friendly decisions in the Eurozone. And I love it. Simply, I just love it. Absolutely, absolutely. We'll get back to that. I actually forgot to bring in that tweet in the slide deck, so I have a chance to do that. Thanks for that address. Anyway, I want to start with what happened yesterday, actually, address crypto space.

4:15We've been talking about Trump perhaps not doing as much as the crypto crowd would love. And then yesterday, wow, what an announcement. I have the tweet right here. The U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden administration. Blah, blah, blah. We'll include Ribble, Sol, and Cardano. I'll make sure the U.S. is the crypto capital of the world. Obviously, Trump forgot to mention Bitcoin and ETH. They're a part of this as well. What do you make of the timing? What do you make of this project overall, Andres? You know, so first of all, the timing is slightly odd, right?

4:53We're talking about Sunday, thin liquidity, not the timing where you expect most people to be focused on what's going on in financial markets and so on and so forth. And we obviously got a really big rally out of this straight after the truth tweet or whatever you call it from Trump announcing this. It's obviously also very, very interesting that he's widening this to being a crypto reserve now, not just a Bitcoin reserve. A few of the members of Congress have, you know, very clearly labeled this a Bitcoin reserve over the past month. So it's been widened in scope, so to speak, and three altcoins of U.S.

5:36origin included. I would expect a couple of other old coins of US origin to be included down the road. Let's see. I mean, Link and Sui are obvious in my opinion, but I don't have any strong evidence of when this is going to happen, how much is going to be bought, whether this is new issuance from the US Treasury that they will use to buy crypto. I mean, the details are still left. for us to focus on right and and basically we have no clue as of now i am you know i'm very very divided on this myself i have very mixed feelings around it because first of all you know is this another attempt to line his own own pockets maybe uh some of the uh you know people high in his administration are pretty happy about the inclusion of of the three mentioned coins.

6:36I think, you know, it kind of challenges the original narrative of the crypto space a little bit here as well. Was it, you know, initially the purpose to get the treasury involved? I mean, everyone's okay with it now and, you know, I'm kind of okay with it myself, but I have mixed feelings about it because it makes things a lot more complicated from a regulatory perspective over time in many ways, at least potentially. I'm not sure that it will make matters complicated during the Trump era, but what if a Democrat is in the White House after the next election? Will they just, you know, inherit this reserve and do nothing?

7:21I don't know, really. Hi, Raoul here. Listen, I think we've got until 2030 before the economic singularity arrives. Now, it might not be the exact date, but it's around then. So we have about six years to figure out how to unfuck our future. I've put together a report to help you called Prepare for 2030. It's going to help you take the first steps in that journey to make sure you're secure past 2030. So just click on the link below and start your journey now. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus500 Futures, you can trade crypto without the hassle of opening a wallet.

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8:33With over 20 years of experience, Plus500 is your gateway to the markets. Visit us.plus500.com to learn more. Trading in futures involves the risk of loss and is not suitable for everyone. Not all applicants will qualify. Plus500, it's trading with a plus. I mean, the way I see it, Andreas, for crypto as an asset class, this is basically a safety net being put under crypto, the way I see it. So for everyone investing in crypto, there's always been that tail risk that things could completely collapse. And I know that wasn't going to happen, but it's still been in the mind of many investors that is there really any underlying value here?

9:13Now you have, in my view, the certainty that if this thing collapses, the government is going to step in. This is simply, this is crypto is too big to fail, in my view. And that's a very, very big change in the narrative around crypto as an investment, as an asset class, I think. Is that an overstatement? No, no, it's fair. And a lot of crypto money was invested in Trump's campaign. A lot of crypto money will be invested in the next Democrats' campaign as well. Not just from Sam Bankman-Fried, but also from other people involved. Sam Bankman-Fried was a big donor to Joe Biden. Remember that? But yeah, you know, the politicians themselves as well.

9:58I mean, yeah, sure. The next president is going to be a crypto millionaire, most likely in dollars. So, I mean, it's, yeah, it's, it's, it's, it's, I think it's hard to downplay the importance for this crypto, even though I completely agree with your mixed feelings about this, because this isn't what crypto was supposed to be. But yeah, I mean, this is where we're at. So yeah, incredible. A lot of coverage on this elsewhere in Real Vision. So, so, so we're going to leave it at that for now. But really, really interesting stuff. We have to touch upon what happened on Friday as well. Complete mayhem in the Oval Office.

10:33I've never seen anything like this. President Zelensky obviously visiting the White House as the third European leader after Kirsten and Macron last week. I thought, as I mentioned last week, that they had a plan. And Zelensky was slowly getting aligned with this plan. Things were lined up for them to sign a minerals deal and then all hell broke loose in front of rolling cameras. I mean, what was your feeling when you heard about this Friday night, Andres? Or Friday afternoon? One big disclaimer here. I'm European and I see this topic through the lens of Europeans. But I try to be as objective as I can.

11:16You know, I don't really feel like I'm in a position to judge whether it was Trump's fault or Zelensky's fault. But the bottom line is that Zelensky lost control of his composure towards the end of this press conference. It is incredibly rare that you do a 50-minute press conference in front of rolling cameras when you have a deal like this to sign. Typically, you have a handshake, two or three minutes of chit-chatting, and then you walk behind the curtains, do the deal, and then get back out for a more official press conference, right? And that was potentially also the plan here. I don't know why it dragged on for so long.

11:56But for those of you who've watched the whole thing, and please do me the favor of watching all 50 minutes, it kind of seemed like Zelensky tried to steal the show from the get-go, you know, and ultimately just dragged on and dragged on and dragged on. And then JD Vance got his chance to interfere, basically. And that was where everything spiraled out of control. I guess 15, 20 minutes after this shit show was over, Selinsky tried to get back into the White House. That's at least what we hear, right? And everything he's done over the weekend, you can elaborate on that, Miguel, is probably a symptom of him regretting what happened.

12:40No matter who's to blame, everyone basically after the dust settled here still seemed to be aligned that there needs to be some sort of peace path here. Otherwise, we'll get back to status quo with a lot of killings in Ukraine and it's not really worth it for anyone anymore, is it? No, and that's the thing. I mean, after this meeting, as you mentioned, Zelensky and his team tried to get back into the White House. They needed perhaps a little more time before Trump was willing to reopen these talks. So instead of going back to Kiev, back to Ukraine, Zelensky and his team went to London. I think it would have been very, very hard for Zelensky to go back to Kiev.

13:22Obviously, he has a lot of support there. I'm not saying that he would be ousted or anything, but it would be very, very tough for him to go back to Kiev and say, okay, this whole peace plan we had, it's down the drain. We're going to fight on for three more years. That would really, really hurt the morale of the Ukrainian troops and the Ukrainian leadership and the Ukrainian population. So Zelensky knows that no matter who you blame for this debacle at the press conference, he's the one with the problem. He's the one that has a war he needs to end. And this is his opportunity to end it. His people want a quick negotiated peace.

13:53And this is his chance. So, I mean, after the Riyadh talk, we talked about that last week. There was huge shock across Europe. What happened? How can you even begin to talk to Putin? That lasted about a week. Now Europe is completely aligned almost with the Trump peace plan. The only remaining issue, and that's probably also what sparked this shouting contest, is the role of the U.S. in the future of Ukraine. So after we get a peace deal, what's the role going to be of the U.S. within Ukraine? Are they going to issue a security guarantee? Are they going to put up troops? So obviously Trump knows that whatever he can agree with Zelensky on, he has to take to Putin.

14:33So if you promise Zelensky that he's going to put in Russian troops in Ukraine, that means he has no deal with Putin. So Trump is trying to position himself to win both negotiations or to get both negotiations over the finish line. And I think Zelensky didn't really account for that. He thought he could get a lot of security guarantees out of the U.S. And that's simply not going to happen because then you have no peace. At the end of the day, and we spend all the time talking about Trump-Zelensky, just wait until Trump gets into the room with Putin because Putin doesn't want peace. Zelensky wants peace.

15:06Trump wants peace. Putin doesn't care. He can keep the war going for one or two more years. So that's also why Trump is so, in my opinion, why Trump has to stick to getting the Europeans and getting Zelensky on board a peace plan that he can sell to Putin, if that makes sense. So I think that's what's happening right now. So obviously, as I mentioned, just showing this next picture, quite a different vibe when Zelensky got to London to meet with Kirsten and Macron. Obviously, the entire rest of NATO, all the European parts of NATO, stood firmly behind Zelensky. The thing is, as we've discussed, Andreas, all the European leaders, yeah, it's rhetorics.

15:43I mean, no one's going to put up what the U.S. is putting up. No one's going to put up the soldiers, the command and control, all that stuff. There's no way. So Europe can't support Ukraine after a peace deal. Europe can't secure a peace deal. We can't get a peace deal for Ukraine. This is the chance for that. And I think Zelensky realizes that and the Europeans realize that. So, I mean, you have to understand when you're sitting in the U.S., In Europe, the mindset has been that the Ukrainians are the good guys. So obviously, the Ukrainians are going to win. And then you have to suddenly realize, okay, they're still the good guys, but they're not going to win.

16:19So that realization should have happened during 2024, but it didn't in Europe. So it's been a very abrupt realization process for a lot of Europeans. And I think that's what's caused a lot of the upheaval and all the dissatisfaction with Donald Trump. because he's trying to shake the Europeans into action, which is working. We have to admit that. Yeah, and of course he's forcing us into action on everything defense related. Look at the defense stocks we suggested to buy. Was it a few weeks back? The German Rheinmetall, et cetera. They're through the roof because obviously the Germans, the Frenchmen, so on and so forth, they'll have to buy a lot of equipment.

17:04and I'm not sure they're going to buy it all in the US after this. On top of that, you know, I'm still almost perplexed around, you know, I'm puzzled by the response that we've seen in the EU. The EU has been a dead man walking in many ways from a growth perspective for a long while. And all of a sudden, we're starting to see chatter around large issuance plans, spending the frozen assets from Russian oligarchs, allowing for less regulation of the banking sector, less capital requirements, stuff that you would never hear people from Brussels say three weeks ago. It's a magnificent U-turn. And we've thankfully been, you know, very much on top of all of this, most likely because we're in touch with a lot of you guys out there from the U.S.

17:59telling us what to expect from this process. You know, I think, I kind of feel like we've been, quote unquote, front running this process a little bit, Mikkel, in our own portfolio. Yeah, absolutely. It's been a great thing, right? And, you know, looking at the market again today, Europe is through the roof. Something is happening there. Yeah, absolutely. I just found this headline that you were talking about earlier about Ursula von der Leyen, the head of the EU, signaled a big push for autonomous cars. I mean, whenever we've talked about autonomous cars, Tesla self-driving cars, etc., we've always assumed that they were going to try things out in California, maybe the rest of the U.S., perhaps in Asia, and Europe would follow along 10, 15 years later.

18:46Now this could be reality in the EU even before the U.S. I mean, this is both in terms of, I mean, deregulation, public investment, but also tech accelerationism, as we've talked about a lot, also with roles, seems to be coming to Europe. So even if most people, 80%, 90 % of the Europeans are shocked by Donald Trump, he's managed to stir up this continent. I mean, we have to pick that up. I'd like to show a chart on the European Bank Index again. And, you know, I use it every week. So sorry if you already know the chart, but it's not a meme coin. This isn't fart coin. I thought that at first. And then you need to put it in reverse if it's fart coin.

19:30Yeah, yeah, right now. But, you know, joking aside, Michael, we're talking about, I don't know, 25 % since New Year, something like that, maybe even 30 now. And if you volatility adjust this and all that, it's just a straight line up. And it's trading at a P, this banking sector index of, say, seven, maybe eight now. It's nothing if this continent gets going again. It can easily double and still look cheap. So, you know, for once we have a catalyst to trade this, and we've been writing this basically since early January in anticipation of this response from the European Union, the response to a peace deal and all of that.

20:16and oh boy, it's been a good trade. So Andres, we have a couple of listener questions very relevant to this. Hi Andres and Mikkel, interesting times indeed. With Europe having to do more for its own defense, I assume a lot of that will have to be financed with new public debt. What are your thoughts on the EU liquidity cycle regarding this change? Do you expect big new liquidity injections? So at some point this year, the European Central Bank will likely have to underpin sovereign debt markets, right? We've seen a big response in bond yields in the Eurozone again today, plus 10 basis points in German bond yields, for example, and further out the curve.

20:53So obviously, the market is currently anticipating that, first of all, on Thursday, where the European Commission is called for some sort of emergency summit to try and find some money for the Ukrainians, that we'll get a message, okay, we're going to issue a couple of hundred billions and throw them at Zelensky. I think that's very likely, by the way. We have money, but we don't have any defense forces. And on top of that, the European Central Bank will likely have to accept to at least accommodate this issuance wave by either cutting interest rates more or ultimately maybe restarting some of these QE light regimes that they've been so accustomed to.

21:37But I think for now, and I base that on having chatted to a couple of former members of the ECB committee, it seems like they're actually very, very positive due to the response from the private banks. And I've been saying the same thing about the US. Private banks are currently creating a lot of money. And that's a form of liquidity as well. It's probably even a better form of liquidity, right? Because if you get a loan in your local bank, Michael, you'll get them on your deposit and you're able to buy stuff. And I don't know, the plumber you buy stuff from, he will get the money on his account and then you get the velocity in the society.

22:17While if you do QE, it's basically an exercise between pension funds and central banks. They're just buying assets. I prefer when the money gets into the real economy and when private banks create liquidity, create loans, create credit. it's real liquidity in the real economy. Great point, Andres. You know, Andres, I always forget our catchphrase in the beginning, but I think now is a good time because I just want to rain a little bit on your victory parade here. So let's just get the phrase. Obviously, we do a lot of trade recommendations. We always try to sprinkle them on top of this show to make things very actionable.

22:54But you have to remember that our trade recommendations might be Sometimes it may be good, sometimes it may be shit. Exactly. And so Andreas, European banks, completely on point with that. We have a question from Randy here. I don't know if he's being sarcastic or if he's just asking, any updates on the MindMedicine recommendation? It's probably sarcastic. Sorry. So, you know, MindMets, it was a tough week last week. It was a tough week for Bitcoin as well. And, you know, it's a high BDAF dollar stock. So meaning that we need to see some better trends in the U.S. equity record for this bet to perform.

23:36I think it's the most asymmetrical bet for this year on a single stock basis. but we need some tailwinds from NASDAQ and crypto and all of that because it's to some extent the same bet just with a higher leverage in a sense. We still, you know, Trump is too focused on everything related to Ukraine, NATO and all of that right now for us to have any focus on what's going on in Bobby Kennedy's department. It's a headline bet as well. It is very much a headline bet. So we need to see, you know, So as soon as Bobby Kennedy and potentially Trump actually acknowledges that, you know, treatments for, you know, the treatments that they offer at MindMets, so alternative treatments for depression and stuff like that, as soon as they mention that this is part of their, you know, narrative around the healthcare sector, then we're off to the races, but we're still waiting for that.

24:36You know, size it out as a, you know, as a lottery ticket. But it's a potentially very good lottery ticket. Okay, one more question here, Andreas, before we get to talk tariffs. We haven't even talked tariffs yet, even though that's coming up tomorrow. A question from Snorra here. What index to buy if your income is a Norwegian corner? Wow, okay, that was a niche. Very much. That Norwegian crown is not doing particularly well. And it's actually something that is fairly common across all currencies with a link to the oil price and the natural gas price. So let me say a few things before we get to that niche question, Mikkel.

25:15If we get a peace deal with Russia, there is also a path for the Russians to get their sanctions on oil tankers and so on and so forth removed. So even if they're able to sell oil to China, India, et cetera, they obviously get a little bit more bang for the buck if they have the, you know, the entire globe has a playing field. And they'll probably get that fairly soon if we're right on that peace path and all that. That's negative for the oil price and to some extent also a negative for the net gas price. So prices lower, especially in the US, but also to some extent in the Eurozone if we start buying from Russia again, which probably is a bit further down the road, to be honest.

26:02But those two trends are pretty firm right now, in my opinion, that we're looking at a landscape where energy prices will, you know, at worst flatline, probably even decline further from here. It's been one of the key topics for Trump during the campaign, right, to bring energy prices down. And so far, he's mostly succeeded in doing that. And it will become even more evident if we remove sanctions on Russia. Final thing around that before we get to Norway, a lot of people on X claim that Trump is now too aligned with Russia and whether there is something fishy there. That wouldn't be my guess.

26:48They have aligned goals, but due to different reasons, right? For Trump, it would be very good to get a peace deal, to bring energy prices down. One of the things that he promised his electorate, basically. and for Putin, it would be good to sell energy to the rest of the world again, right? So they have the same target now for different reasons. Quick point here, Andreas, on the gas and oil before we get to Norway. I agree with you completely. That's been a point of error for several months, that geopolitical risk, especially the Ukraine war, peace in Ukraine would lead to lower gas and oil prices.

27:23We're seeing that in markets today as well. so you have to expect over the coming month or two when peace negotiations will most likely happen between Trump and Putin that it's going to be very very much back and forth we should get used to how Trump is dealing with these sorts of things right now he gets in there makes a lot of noise storms out the door sends Putin home there's no deal and then they're back to talking so expect some volatility in this over the past month I just wanted to get that in there you had a point about Norway as well Yeah, what index should you buy if you're a Norwegian?