Macro Mondays: July 28, 2025 | Andreas Steno & Mikkel Rosenvold

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1:07Hello out there. Welcome to another edition of Macro Mondays. Back to you after a short little summer break here. Welcome back, Andreas. You had a good one? I hope you can see that I'm slightly more tan than I were just a few weeks ago. So it was certainly a good time in Portugal. As you know, the Wi-Fi is not perfect when you visit Southern Europe. But I managed to keep alive, both from a trading perspective, but also from a research perspective, from a fishy Wi-Fi connection down there. It's been an incredibly interesting July, and the developments over this weekend have basically added fuel to that in many ways.

1:51So let's get to it, Miguel. Yeah, absolutely. So just a quick reminder that this is our weekly sneak peek into the research and analysis that we publish at Real Vision. As you may know and may have heard, we are joining forces completely now with Real Vision. We are shutting down our own website and joining and moving our subscribers to Real Vision to give you the very best offering you can have in macro, in our opinion. We are moving closer to the end date of our old website. So just a quick service message to those of you who subscribe to standardresearch.com. If you're on an annual subscription, you should sign up to a free account with Real Vision, and your prepaid period will be transferred.

2:31If you're on a monthly deal, you should simply sign up with Real Vision once that runs out with Stenner Research. So be sure to check that out. Check out stenneresearch.com for more details on that. And that goes also if you're a Substack subscriber of ours. We're moving everything to Real Vision, and we're really happy about that. As I said, this is just a sneak peek into it. If you want more of our content, you need to sign up to the Real Vision Pro tier. Andres, you're doing a great show on Thursday. Macro meets micro. I'm very much looking forward to it. And just also our usual weekly reminder here that we try to be very, very specific.

3:04We try to be really actionable. You can follow our portfolios and everything. So everything is transparent. But that also means that our trade ideas might be sometimes... Sometimes it may be good. Sometimes it may be shit. Yeah, exactly. Good to have him back from vacation as well. So, Andres, I was fearing, you just mentioned this, I was fearing that this would be kind of a slow start after the summer, but we have so much on the table, so much stuff coming from the Oval Office or, should we say, from other places because Trump has been out of office this week but not out of work. I'm glad you haven't been shaking your head while I did this whole intro, Andreas.

3:43I just want to play this clip. I'm not sure. Well, maybe we can talk on the Fed announcement on Wednesday. but let's just have the clip from uh from trump's visit to to to the fed last week and i think most of you already saw this so we're taking a look and uh it looks like it's about 3.1 billion went up a little bit or a lot uh so the 2.7 is now 3.1 and i'm not aware of that yeah it just came out yeah and i haven't heard that from anybody the fed yeah it just came out

4:18I know said it about 3.1 as well. This is a wonderful clip, Andreas. I really, really love this, the way he shakes his head. He's been so cool all this while, Jay Powell. But you mentioned to me just earlier, could we have something in store for Wednesday? Okay, that's kind of a curveball in many ways. But when I watch this clip over and over and over, in my opinion, it's one of the best. clips from the modern history of reality tv you know it's just amusing but um slightly worrying as well you know when i watched this clip my initial reaction was that okay maybe trump will actually go bananas uh once he gets back to his bone and his truth profile since paul is publicly going against him uh but we kind of got the opposite reaction uh he started calling paul a good man weeks after calling him a logo IQ person.

5:18He started saying that he kind of got the impression that Powell was close to recommending a rate cut. I think 15 minutes before we went on air here, Michael, Trump told reporters in Scotland that he thinks the Fed needs to cut this week. That's a different tune to saying that he wants them to cut. I mean, he's stepping up his rhetoric. so maybe there's something in store for us on Wednesday so how could he in any way form a shape hint something here without hinting too much maybe he is you know he's gotten the impression from Powell that the two red cuts that they you know they still have those in the dot plot for the remainder of the year that they're willing to pre-commit to them on Wednesday they could sort of pre-commit to September December if everything goes to plan That would be a much more committed message than what we got back in June.

6:18And I certainly wouldn't rule that out. Every single inflation number that we've had out for, say, three, four months in a row has pointed to less inflation than feared. the tariffs inflation that everybody and their mother suggested would be incoming back in April after Liberation Day is still nowhere to be seen outside of a few categories, very linked to tariffs, obviously. But we're seeing this inflation elsewhere kind of countering that. So, you know, it wouldn't be completely out of this world to think about a very obvious message on Wednesday and I actually need that direction because you know nobody really expects Powell to do anything outside of staying in his lane saying that they need more information and the typical blah blah from central bankers but I think there's a potential surprise installed for us on Wednesday and you know I kind of hold my guns in many ways because as most of you know I've been short dollar for a while and it's not really working wonders today especially not after the euro u.s trade deal um so i think it will be a much more interesting july fmc meeting than what we're typically used to uh those of you who watched the ezb meeting last week it was a typical last meeting before the summer vacation the summer break uh no you know major news outside of staying on hold and and and uh that is the typical modus for central bank in july but i actually think we We need to be carefully watching what's going on on Wednesday.

7:56Absolutely, Andres. We'll dive even more into the details of the EU-US trade deal. We have some specifics on that, but I just want to get your take as a golfer, Andres. I'm not a golfer myself. I know you are. Can I just have your analysis on what's going on here?

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9:18so we're seeing trump's caddy i think this is is that the right term dropping a ball just there just outside of the uh the bunker uh what's the analysis here is this how you do it what's this is this cheating well well that's certainly how you do it let me put it like that but yeah sure it's you know depending on whether we're talking about a formal match here that that would certainly qualify as cheating uh without a doubt um typically you would sneak out a ball out of your trousers if you if you try to cheat this way but it's it's um it's a different game when you have a caddy you know i'm not necessarily used to playing with a caddy so obviously you pay him to do the dirty job here uh yeah trump had a great great trip to scotland we'll we'll get back to that and we'll also get back to the announcement from Trump regarding the Putin deadline.

10:14We'll get back to that. Before that, Andreas, let's get to the hot take of the week. And this is one that you sent me. I think most of you may have seen this post, this meme from Eric Trump, sort of doing a mic drop on his February 3 announcement that now would be a great time to add ETH. And someone else posted this, that he essentially lining up the timeline here, that he posted this on February 3rd. hasn't really been a good trade ever since that, just up until June 22nd. So the second this trade went in the green, he did the mic drop. That is a great hot take. But in any case, it's been a good trade, especially in recent weeks.

10:54We are in a very, very bullish season on ETH. Yeah, finally, it's been a good trade. And I've even dared to call this a chat GBT moment for Ethereum, which could be the famous last words of macroeconomists. But I think the Genius Act is actually an act of genius by the Trump administration. It's one of the better pieces of legislation I've read for a long while. And it kind of sets the scene for a large and broad-based use case for stablecoins. It establishes the regulatory framework for stablecoins issued by institutions that are qualified to do so given this legislation. So it may be a pretty big deal.

11:42And obviously, we know the ETH is kind of the mother of stablecoins, especially when we talk boomer institutions. So I think it's a big deal. So, Eric Trump was obviously in the know about details of this piece of legislation. He was probably, if that's it, three, four months early on trying to broadcast those in an indirect way. And, you know, take this as a piece of advice from someone who's been on the sell side for quite a while. People hate when you take victory laps the second you're in green. You probably need the trade to run a little bit longer before you take a victory lap. So, a piece of advice to Eric here.

12:23Yeah, absolutely. Well, I guess you'll cover the triple whammer of crypto legislation a bit more on Thursday. Perhaps a very, very interesting setup for crypto overall. It's been covered elsewhere here as well. But it's definitely sustaining that case. Okay, Andreas, do you want to dive into the EU-US trade deal or look at liquidity? What do you want next? Yeah, so let's start with liquidity because that's beneath the hood, obviously, something that impacts this ETH case. as well. I think we've been very, very clear in our communications basically since May that we've seen a bottom in liquidity.

13:04We've seen a bottom in the business cycle. We're starting to see clear signs of macro surprises on the top side of expectations, on the back of this positive development beneath the hood. It's been very dollar driven. And that's why I want to highlight this chart of the week from our massive chart deck released for the pro subscribers at real vision later this afternoon i basically provide a grand guided tour around all of our forward-looking indicators now that i've gotten back from vacation i always you know start with a refresh of all of my indicators that's the first thing i do when i get back at the desk and And, you know, spoiler alert, everything looks pretty decent still.

13:47And we're seeing an acceleration in many ways in the liquidity cycle, as you can see from the light blue line here. But we're also seeing a liquidity acceleration if you set aside the so-called FX effect. So the effects of the dollar weakening versus peers globally. We're not seeing that today, but we've obviously seen that through the year. Why is that important? Well, in my opinion, we get the strongest signal when liquidity is performing both in local currency terms and in dollar terms. And we're currently seeing both. Of course, the sharpest acceleration in dollar terms, but liquidity is going up and there is no way about it.

14:29And why is that so important when you look at the cycle here? Well, we've seen a reacceleration of various soft growth gauges basically since the reopening of trade with China after the whole standoff between Trump and Xi was called off. It makes a ton of sense. Things move forward again as soon as that trade debacle with China is off the table. On top of that, we see liquidity developments now moving in a positive direction. and we see what I typically call a re-inflation environment in many commodities. We see that in copper. We see that in oil today. We see that in palladium. Everything linked to the business cycle is starting to show signs of life.

15:18So what I'm saying here is that we're in a so-called up-up-up scenario. Growth up, liquidity up, and inflation slightly up, but not in a worrying way. that reminds me a lot about what happened in late 2020 early 2021 when everything kind of went bananas towards the end of that cycle we've seen you know reminiscent trading patterns single stock names going bananas because sydney sweeney is suddenly wearing a bikini and the likes right for once i actually think that's a fundamental story In contrast to what a lot of other pundits said about putting Sidney Sweeney on your poster, I mean, why not buy that stock?

16:04I was tempted as well. Setting that aside, we've seen meme stock trading patterns. We've seen risk taking further out the curve in crypto space, et cetera. So we're starting to see some of the signs of an accelerating business cycle. And typically, you actually see some of these very, very aggressive return profiles when you go from, say, 48 to 53 in the PMI. And that's exactly the kind of stage we're at. If you want to see this whole package of forward-looking indicators, you need to sign up for the pro tier at Real Vision. It's a very comprehensive package where I go through everything from inflation to liquidity to growth.

16:44But the spoiler alert is that we're in an up-up-up scenario. Yeah. And speaking of the up arrow in inflation, probably the one to watch this fall, one of the big jokers is obviously the tariff effects. And this week we got or this weekend, we got two of the major deals done that we were expecting, Japan and Europe. It seems like the China deal is getting postponed once again, but we sort of have a framework for that. So what's your overall take on this? We've had a lot of varied reactions across Europe, a lot of criticism for Funderland for this deal. What's your take from a European standpoint?

17:19Let's maybe start with that. Okay, Mikkel, so first of all, I'll also allow you to talk about the political aspect of this since you obviously have your sources within the European Commission, etc. But I'm surprised that the market is so negative after this press conference in Turnbury, Scotland yesterday. It was one big humiliation of the European Union, this press conference. I have to admit to that. And I kind of get the vibe that that is the main reason why we're seeing sell-off in European equities in the euro after this. It felt like a humiliation. But I actually think that the deal details are pretty okay from a European standpoint.

18:00We've been saying this out loud for a while. Trump is easy to handle as long as you give him a public relations victory and a photo op. And that was exactly what he got yesterday. right they pre-committed to buying u.s military equipment but no like firm details on how much and uh when and how uh they pre-committed to buying u.s energy we buy that fucking energy anyway we don't have any energy ourselves so why is that an issue you know we just pre-committed to buying it in the u.s instead of elsewhere it's not a loss for the u.s uh euro um and then finally we pre-committed to some weird 600 billion investment deal in the US, which is, you know, it lacks detail still, which by the way, is also the case for the Japanese deal.

18:48And, you know, Trump loves to be able to showcase a very concrete number. And that was exactly what he got. If you listen to this press conference, Trump explicitly said the European Union is investing billions of dollars into the US. You know that number. It's big. But now they're adding 600 billion. He's got no clue whether 600 billion is a lot or not. It doesn't matter. It's a photo op. It's an opportunity for him to say that the European Union gave to his demands, which is partially fair. I don't think it's such a biggie. And if we go by the playbook from the first terrorist war against China, where we had a similar photo with Chinese officials.

19:36A lot of these numbers never came into fruition anyway. So, you know, yes, it was one big humiliation of the European Union. Two quarters ago, everyone in the European Commission would have told you that 15 % base case tariffs were off the table. They would have laughed at you. They would have left negotiations and blah, blah. So it is a victory for Trump in many ways. But I still think it's a very palatable deal for the European Union, especially in relative terms. Yes, I agree with that. We can dive into some of the details as well, perhaps especially on automobiles would be interesting. I think from a political standpoint, this, Andreas, first and foremost, this is what you're able to do and stomach when you're not up for election, when you have a leader that's not up for election.

20:19Ursula von der Leyen, yes, she's democratically elected, but not directly. No one voted for her. She was elected among the heads of government of Europe, essentially. And she can stomach this. She's okay with being humiliated if that gets Europe a better deal. I think the strategic backdrop of this for Europe is there's no way around these tariffs. Trump couldn't do zero for zero across the line or across the board. The U.S. are going to try out tariffs no matter what we do. So let's choose our battles wisely. let's not have a battle between von der Leyen and Trump. Let Trump humiliate von der Leyen, give him some number.

20:56That's the Saudi way of doing things. We'll just throw in a huge number of billion dollars. And then remember, this is almost a one-pager agreement from what we know so far. This is a framework. Now this is taken off Trump's desk. He doesn't care about it anymore. The deal is done. Now the bureaucrats get to work on this. And that's where the European Union has their strong, has the upper hand compared to the Trump administration. So I think once this gets ironed out, it will become a lot better for Europe. There are a lot of factors. I mean, the 15%, it's okay. I get the optics of this, that Europe hasn't got anything in return, but it's quite okay.

21:35And these investments, as you said, the energy number is very, very big, 250 billion. But let's see. It's a letter of intent, essentially. So the situation has been diffused. I think that's what the European chambers of commerce wanted most of all, was to get some clarity in this, to get some guidance of, okay, this has got to be the level. Now we can begin to work. And remember, this comes on top of a NATO meeting where Trump was also placated. So instead of doing Trump's first term, he was very antagonistic against Europe. They had a very bad relation. Relations are much, much better now. They have a strong working relationship.

22:12and now they've gotten things de-escalated. They took the heat of the situation and got it into the more cool bureaucratic arena, essentially. So I agree with you here, Andreas. I'm not too pessimistic. Could you just elaborate a little bit because we talked about this a little bit earlier. I know, so the 15 % is across the board. There is, say, I think it's a 27.5 % tariff on cars and then the 50 % tariff on steel and aluminum. but the Europe still has preferential access to US steel. So, I mean, is this bad for European automakers? Because it seems to be a worse deal than the Japanese automakers.

22:51Yeah, but, you know, it kind of depends on how they iron out the details and quotas because we've actually had a situation, I think since 2022, where the European Union had a quota that was, you know, So, except from the steel and aluminum tariffs, the sectorial tariffs of the 232 set up in the US. So, in that sense, it still depends on the details whether the Eurozone will be able to export at least parts of the current export mix at lower tariffs than what was kind of penciled out in the headlines. And on top of that, the auto deal looks okay as far as I can judge for now. And at least for the parts where you have US sock components in the car, you'll get to the 15 % tariffs.

23:50And for most parts, I think we'll end up seeing European autos being exempt down to the 15 % tariff rate also on automobiles. So, you know, from the standpoint of the CEO and the Bayern district in Germany or the Bayern region, from one of the big car makers, I think it's an okay deal given, you know, what was potentially on the table here. On top of that, we obviously still have some outstanding issues relative to the U.S. when it comes to semis and Barma products, not least. That's the big one.

25:00And it's 50 % of pharma exports from the European Union to the US. And obviously, the US is mad about that. This is a tax haven set up from Irish soil. We, by the way, run a fund from Ireland, so you can guess why. Ireland is a tax haven in many ways. And they've almost exploited that on purpose at the expense of the rest of the European Union, in my opinion. So obviously, what the European Union has done here is basically to say to Ireland, you need to clean up your own mess on pharmaceuticals. It's a big issue for Denmark. It's a big issue for Sweden, some of the niche countries doing a lot of pharma exports to the US.

25:49but Germany, France, Spain, etc. they couldn't care less about pharma exports they don't export any pharma basically Nope, so a very niche case but still one to keep an eye out for if you're invested into that Andres, just one note on the last Trump story of the week or at least one other we just got news that Trump has grown even more impatient with President Putin he issued I think it was two or three weeks ago a 50 days deadline that's now being cut down to 10 or 12 days. I kind of get the feeling that Trump was afraid that Putin had forgotten about this deadline. He's like, remember, there's a deadline and now we're shorting it.

26:32Because what's supposed to happen in those 10 to 12 days? I don't know. Are the negotiations ongoing? Not as far as we know. So can they iron out a peace deal between Ukraine and Russia within 10 to 12 days? I think this is sort of a wake up call to Putin, say, at least give me a phone call here. Give me something to work with. Because it's going to be very, very tough for Trump to avoid hitting him with new sanctions if you don't. So this is the framework for the next 10 to 12 days. We might get a phone call. We might get a further pushback of that. But we are most likely looking into sanctions against Russia.

27:11And you should read, again, if you're a subscriber, You can read the drill articles from two weeks ago where we take a deep dive into this potential sanctions package and what it might mean for metals and some stock picks and that as well. So, yeah, just a little note on that address. It's going to be really, really interesting to follow if Putin could do another phone call to save the situation as he's done before. But in sharp contrast to the European Union, you know, Russia's actually got some need to have stuff. Yeah, they do. I think that's the biggest issue for the European Union every time they negotiate with counterparts globally, is that we don't produce anything that you need to have.

27:53You know, we export loads and loads of services, but many of them are nice to have. And, you know, the biggest export, especially for the southern part of Europe, is related to goods within luxury. So everything from bags to champagne, but it's not neat to have stuff, right? And in service terms, the biggest export good we have is tourism, when you look at it from many aspects in the southern part of the Union. And those are nice to have goods, very nice to have, by the way, but when push comes to shove, it's not neat to have. And what basically happened between the U.S. and China when they were in that standoff was that China told the U.S., okay, we'll just not export any rare earth magnets to you.

28:45That's a need to have product, right? So, you know, we kind of lacked that. And given that, I actually think that Ursula von der Leyen did a pretty good job of securing a deal for the European Union. And we don't have the card in these negotiations, which is a big difference to Russia because they have quite substantial impact on the supply chain of everything from oil to uranium to palladium, stuff that we need. And therefore, I'm still skeptical that he can set such a firm deadline without having to accept that he needs to push that deadline ultimately if there's some movement on the other side.