The Fed's Mistake | Macro Mondays: July 6, 2026

0:00Andreas Steno Larsen:Summertime is maybe good, summertime is maybe shit. It's Macro Mondays, big picture, clear play, stocks, bonds, FX, crypto on the way. Get context, it's a tragedy right now on your screen. Macro Mondays, level up your week, oh yeah.

0:21Mikkel Rosenvold:Hello out there, welcome to Real Vision, welcome to Macro Mondays. My name is Mikkel Rosenwald. I'm your usual host. And we have a great show for you today. We're going to be covering the inflation picture, the oil outlook, the latest on the Korean picture, as we usually track every week. Obviously, the latest in the memory market. And a little bit of a question, can the U.S. actually win the World Cup with the backing that they have? So lots of great things to unpack for you today. with me as usual, my co-host Andreas. And Andreas, maybe let's, if you can move your head a little bit to your right, let's address the very literal elephant in the room.

1:04Mikkel Rosenvold:You're not in Copenhagen today. Tell us where you are and how are things down there.

1:09Andreas Steno Larsen:Yes, I'm in France on the island called Hors in French. Corsica, I think, goes by that name in English. Great island, very cozy. You know, not a lot of tourists, actually. I know it's pretty early, given that most Europeans tend to go on vacation a few weeks from now at the earliest, right? So in any case, I'm really enjoying my time here. And it seems like the Internet connection is pretty decent here. You know, as a rule of thumb, we're Northern Europeans, right? Every time you cross a border to the south, the infrastructure, especially in relation to Internet, worsens. So I've only crossed two borders.

1:48Andreas Steno Larsen:So we're still running. technically, yeah.

1:51Mikkel Rosenvold:For an open dress. I have no excuses. I'm still in Copenhagen. I just forgot my mic at home, so I'm speaking into airports. So let's just call this a holiday edition of or vacation edition of Macro Mondays. Anyways, lots of great stuff to unpack. Speaking of France, France has a bit of a mixed reputation in some sorts. I feel like it's one of the teams I enjoy watching the most in the World Cup currently. Not a lot of people are rooting for them, and either our good friend Raul here told us anybody but France to win the World Cup. We can get his treat up here. You seem to enjoy France, but it's a bit of a mixed reputation.

2:33Andreas Steno Larsen:Let's be honest, right? I think France is the only country that everybody's got an opinion on, most often a negative opinion, while they still go on vacation there every year still. I mean, it's the, you know, it's the mother of all hypocrisy. You know, they're humiliated on a running basis by, you know, oh, they always surrender into politics. You know, everyone's calling them out in terms of their World Cup team now, right? And still, everyone loves their food, everyone loves their wine, and everyone loves visiting the country. So I'm here, right? And I'll be cheering for France for the rest of the World Cup.

3:13Andreas Steno Larsen:I'll have to admit for that.

3:14Mikkel Rosenvold:the absolute south of France. We definitely won't be cheering for Norway, that's for sure, even though they're doing painfully well at the moment. Anyway, Andreas, let's get on with the macro stuff. We had some sneak peeks into the rolling over of inflation that you've been forecasting or expecting for a few weeks now, Andreas, last week with numbers out of the Eurozone and also some indications from the ECB summit in Portugal. So are you still bullish on inflation rolling over, solving inflation picture going into the coming months? So what's your feeling right now based on the numbers that you're tracking?

3:52Andreas Steno Larsen:So a couple of things. We got the numbers from the Eurozone around the calendar turn, and they looked promising. On a Eurozone aggregate level, we got a surprise between 0.2 % and 0.3 % as points below the economist consensus. So that's point number one. It wasn't really particularly energy driven. Of course, energy came down, but it was pretty broad based. And if you look at some of the detailed data that we have from some of the larger regions in Germany, already delivering all of the soft components of the index, I'd argue that it was as soft as you could have hoped for. an incredibly soft inflation report for June.

4:37Andreas Steno Larsen:Obviously, in roughly a week from now, we get the inflation report from the US. If you look at inflation markets, so inflation fixings priced by inflation swap desks at banks, they have a substantially lower expectation for the inflation print in the US compared to the economists surveyed. And I'm certainly on team markets here. You know, the now costing that we're doing is also on the low side of the expectations of many of the market participants. And again, I kind of also think that the job report we got on Friday from the US confirmed that some of the impacts that we saw in May were skewed due to the exact World Cup that we discussed to begin with, right?

5:25Andreas Steno Larsen:We saw a reversal of the hiring within leisure and hospitality, for example. And I wouldn't be overly surprised to see some technical softness in a few of the categories related to services in this inflation report due to this up and down impact from the World Cup as well. So in any case, yes, I'm still confident that inflation is rolling over. And we got a few early soft steps in that direction from the central bank chairs last week in Portugal. we had the french governor of the cb lagart stating that well inflation is clearly surprised to to the low side of our projections no shit sure luck i mean the oil price was lower than their mildest inflation scenario already when they met um and you know on top of that we've also seen a positive surprise inflation coming lower than their expectations across of uh across a range of other measures.

6:22Andreas Steno Larsen:So Kevin Walsh kind of said the same, right? Inflation expectations have come down since I took office. So maybe they'll get the chance to pivot already after summer. I think that's likely.

6:33Mikkel Rosenvold:Yeah. Or maybe he's waiting for the official numbers, giving himself a bit of time to get into the job and get the committee behind him, Andreas. If you want to get the full analysis of the inflation picture and the outlook for central banks, you should check out Real Vision Pro, the approach here. It's a little bit expensive, but we have a couple of really good articles every week in there. I really like the one you published on Friday, Andreas, especially looking into the inflation and central bank situation. Also covering what trades we see as good in this scenario with softer inflation prints coming out of our now costing models.

7:09Mikkel Rosenvold:Some very interesting thematic sector bets there. While you're on Real Vision, we have a great week coming up, so you should absolutely make sure to sign up for that. tomorrow at 9 a.m. Eastern, we have Michael Howell and Ash Bennington in the studio. You interviewed Michael Howell. Was it earlier this year, Andreas? Yeah. It was a great talk. A bit of a follow-up on that. On Thursday, 9 a.m. Eastern for the Connect here and above, we have Joe Bland back to discuss the beginner's portfolio. If you're looking to gooste that into the Real Vision environment and community, that's a great way to get started with Joe Bland, great guy over there.

7:50Mikkel Rosenvold:So lots of great content on Real Vision this week and ongoing over the summer, Andreas. We're going to be keeping up this, more or less keeping up our publishing rhythm. So no rest for the wicked here. Andreas, you just mentioned oil. And you have a great piece out today as well on Real Vision Pro on the outlook for oil because we've had quite the first half of the year in oil. A lot of oil pundits expected oil to go to 200. We didn't go anywhere near that. All is rolled over in the low 70s now. Some people are fearing a glut. Would you see something else? Take it through your thinking and the charts you're looking at here, Andreas.

8:31Andreas Steno Larsen:I wouldn't say that I fear a glut. I would hope that we get a glut. A lot of the energy system is still running on nat gas and oil in Europe. So having said that, everyone and their favorite oil pundit got wrong-footed during April and May. And everyone called for high oil prices. The Economist banged the drum on high oil prices, like three headlines in a row. Yeah, La La Land. Yeah, I think they used that exact phrase that the oil price was in La La Land. And here we are with all prices basically back at square one. You could even argue that in some instances we're below square one, if you know what I mean, before the Iran war.

9:19Andreas Steno Larsen:And the big question is, what's next? Because we had this trade right. We exited our energy longs in the first week of April. We basically couldn't get that timing more spot on. And then we rolled over into semiconductors and stuff like that. So, you know, that change of scenery was basically smack-deck forecasted by our now casting. But I think the next move is a lot less uniform, directionally speaking, because you have effect pulling in opposite directions. And I'd like to start with just a brief status on the Strait of Vamoose and allow you to unpack your thinking as well there, Mikkel. But if we go to the tanker tracker, this is the official one from Bloomberg.

10:10Andreas Steno Larsen:We also subscribe to some Kepler data, which puts this tanker crossing number at slightly higher levels. In short, we're nowhere near levels that we saw pre-war. But why would we ever get back there? We've bypassed this trade via pipelines and such things. and probably to the extent where approximately 7 to 8 million barrels a day leave the region via pipelines and trucks and stuff like that instead of tankers from the Strait of Amuse. Iran. Curious about online trading but haven't taken the first step yet? You're not alone and Plus 500 Futures is a great place to start. The futures markets are moving fast, and with Plus500, you can explore popular assets like oil, gold, the S &P 500, Bitcoin, and more.

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11:48Andreas Steno Larsen:Played its hand. They will never get the straight back to where it was. and they even struggle with Oman trying to sort of gain market shares in terms of the transits now. So I actually think they're stuck in a bit of a mess, but what's your thinking around the strait and whether we should actually expect some action there, if you know what I mean?

12:11Mikkel Rosenvold:I think we might see some actions because the Iranians are very clearly trying to milk this for everything it's worth while it still has some leverage value because you're completely right, Andreas. Yes, we are, or the world is bypassing the Strait of Hormuz to the extent that we can, that we have capacity for. That capacity is going to be built out. There's no question about that. Some of it we have heard, some rumors about some of it. But that's going to take 6, 12, 18 months to materialize. It takes a lot of time to build a pipeline across the Arabian desert, for instance. It's going to be built.

12:47Mikkel Rosenvold:The Chinese are going to build it, most likely. So I think the Iranians see, okay, we have a short-term window to maximize this. We have a great situation vis-a-vis the US. They have essentially retreated from the war. The Iranians are trying to max this and milk it for everything it's worth. And that is going to create some continued turmoil. And that is going to prohibit us probably from getting back to the usual tanker levels. And it's also going to, of course, give people a great incentive to build new bypassings of the straits. So in a sort of way, this is a self-fulfilling prophecy, because if the Iranians recognize that they have a limited window to leverage the Strait of Hormuz, they're going to maximize what they do with it in that period of time.

13:29Mikkel Rosenvold:And that's going to accelerate the buildup of shortcuts or alternatives. So absolutely, geopolitically speaking, the Strait of Hormuz will never have the same importance again, both for the sort of technical reasons we just mentioned, but also simply due to the fact that we had a closure for, was it three months of the Strait of Hormuz? And it was okay. I mean, yeah, we had some volatility in oil markets. You would expect that. It wasn't far from the major disaster that every sort of wargaming of this or scenario forecasting of this has been. It's always been a big specter of geopolitics, like this big fear that if something happens, they're going to shut off the trade-off remove.

14:13The world economy is going down the zero.

14:18Mikkel Rosenvold:It didn't happen. Now we know how to handle it. Next time, we'll be able to handle it even better. So the trade-off remove is gone as this big fear factor. It means that a lot of risk premiums can be reduced a little bit long term. And this is very, very positive. But obviously, in the short term, we have the Iranians still trying to maximize this. And that is probably going to put some ceiling on at least the number of official crossings. I don't see the problem as much in oil, because oil can be, and that gas can be transported through other ways. But other commodities, Andreas, and other manufactured goods might be a problem out of the Gulf states.

14:57Mikkel Rosenvold:And they're really going to have to search for alternatives here. So, Mikko, a couple of things.

15:02Andreas Steno Larsen:If we look at the oil market live in terms of the oil and water basically being moved from A to B, we've probably reached a new all-time high by today, especially if you adjust this running measure for sanctions. What do I mean by that? Well, we have a chart here on the global crude on water, and currently no one's really sanctioned. I actually think that's the short version of it. The Iranians can export. The Russians can, to a large extent, export with some caveats. But, you know, there's no doubt to me that we have more oil on water than we've ever had before. And, you know, currently not a lot of this is stuck in the strait.

15:52Andreas Steno Larsen:It was stuck to some extent, but currently not. So we're talking about an oil market that is more than in balance now. We probably have an oversupply, but remember one thing, and this is the key to understanding everything that happened over the past couple of weeks and months for that matter. China remains on a buying strike. If you look at the most recent updated data from China, they're importing a little less than 6 million barrels of oil, less per day. It's huge. and I tend to think that this was the surprise element to the Iranians, right? Because they probably counted on the Chinese side to support them in this Strait of Amoose combat with the Americans.

16:38Andreas Steno Larsen:But the Americans and the Chinese, they met in Beijing and they made a deal on this, most likely, right? So in short, I have a load of very technical ways of measuring it live that I'll give away to all members. in this research piece that we released today. But in short, you need to go low oil when China starts buying again. And currently, that's anybody's guess, but they typically buy when they find the price to be low enough. And I don't think we're far away from that point. Let me just put it like that.

17:12Mikkel Rosenvold:I agree completely. This is what China does well geopolitically. They build situations where they can afford to be patient. They build a situation where they could afford because they have the reserves large enough to do this, to just stop buying. I say, okay, we'll stop buying. Then we don't have to fix anything in the Gulf. We'll just wait for it to fix itself. And that is what they're doing. Once they decide to start buying again, they will have a lot of Russian crude on the borders, as we just showed. They will have a lot of supply to buy from at very decent prices. So at least here, we can discuss other areas, but at least here the Chinese are playing this very, very well geopolitically.

17:52Mikkel Rosenvold:They can afford to be patient. they can afford to dictate things if they want. But obviously, a huge driver for the oil price for the second half of the year, Andres.

18:04Andreas Steno Larsen:Yeah, we would have been in a mess if China didn't, you know, rebalance markets in the way they did during April and May. Or at least it would have been a lot worse. But yeah, thankfully, they made a deal with the Americans. I'm almost 100 % sure that this was agreed upon in Beijing when Trump and Xi Jinping.

18:26Mikkel Rosenvold:I think so. Absolutely. So a quick break in your regular programming. If you're serious about your future, grab my free report called Prepare for 2030. I think you've got five years to make as much money as possible. And this guide will help you navigate what's coming. The link is in the description. Download it now. Absolutely, Andres. Any more remarks on the oil?

18:50Andreas Steno Larsen:out milk or where do you want to run off news the short version is that you know everyone's flipped short on energy now uh even most of the you know pundits and media outlets and managers that sounded the alarm on high oil prices through the last three months we can see the positioning data has rolled over completely and even the economist this weekend basically decided you know to throw in the towel and they wrote an editorial where they apologized and they tried to explain why they were wrong. And they even followed up with an article where they tried to show their track record over the past 10 years or so, stating that this was, you know, one of the more wayward predictions and so on and so forth.

19:42Andreas Steno Larsen:So we're getting there in terms of going on oil. That's just for the right to tell you.

19:47Mikkel Rosenvold:Yeah, so there's the short version of this is that you have the biggest buyer in the world essentially waiting on the right entry point into the market, essentially. That's obviously the luxury that China has, but it also puts a certain floor on the oil price because at some point, they will just start to fill up their stocks again, essentially. So it's very interesting.

20:11Andreas Steno Larsen:By the way, it holds true also in net gas markets where Europe, obviously one of the biggest buyers on earth, we've been on a buying strike to some extent because of two elevated prices and a lack of supply. And we can do that since we're currently amidst what you would call the filling season, right? Because we typically use more net gas for heating than for cooling in essence, because we're not allowed to cool our houses in all sorts of places in Europe. It's not even wrong. No, no. We've had that discussion over the past month in Denmark, right? A lot of people are against ACs per definition because, oh, you cannot use energy to cool things.

20:51Andreas Steno Larsen:You can only use energy to eat things. And as per usual, I bring up this chart showing that more people die from heat in Europe than people die from gunshots in the US. And people just cannot wrap their head around that. But it's true. Every single year, more people die from heat in Europe than people die from gunshots in the US.