Attack the Week (ATW)
Hot Macro Views / Calendar / Dashboard Stories / Asset Allocation Update
Monday Thoughts
I hope everyone is enjoying their well-deserved long weekend. It’s a sweltering heat here in the UK, where temperatures are meant to hit 33 degrees Celsius (91 F) tomorrow. For a country where things operate smoothly between say 5 and 20 degrees, that’s bound to create some chaos. Atypical for a bank holiday weekend here is that shopping malls are full, where people seemingly enjoy free air conditioning. I am sitting at my desk with a loud mobile air-conditioning unit blaring at an uncomfortable decibel level while keeping me cool. We are exploring getting our place fully air-conditioned soon. It’s about time.
As I scan market screens, renewed enthusiasm is sweeping through markets. Hell, even bonds are loving it, and I like it as I’m still long following last week’s reversal signal, which our models called the top in yields globally. Well done.
Is it the lack of an escalation over the weekend that is driving markets, or the renewed optimism pushed by the White House? Admittedly, we are trading in very low-volume sessions here. There were so many messages over the past few days, I am losing count. All that matters is that nothing has really changed. As I’m typing this, Trump has, once again, pushed out a long message, starting with the following, which, in his true style, means absolutely nothing:
”Negotiations with the Islamic Republic of Iran are proceeding nicely! It will only be a Great Deal for all or, no Deal at all — Back to the Battlefront and shooting, but bigger and stronger than ever before — And nobody wants that!”
His latest statement on Iran and the Abraham Accords reads like an attempt at a grand regional bargain: a nuclear settlement tied to broader Middle East normalisation, Gulf capital flows, energy stability and economic integration. But beneath the optimism lies a harder reality about leverage. As Trump himself wrote in The Art of the Deal: “The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood.”
The market implication is that Washington increasingly appears focused on avoiding an energy shock and recession at almost any cost, while Tehran understands its strategic leverage via the Strait of Hormuz. Markets are clearly interpreting this as a de-escalation signal — lower geopolitical risk premia, improved growth sentiment, and softer support for oil and gold — but the risk remains that a failed grand bargain could ultimately lead to an even larger repricing of geopolitical risk.
Over at pa-globalmacro.com, our home for models and technical research, members can now save the dashboards, signals, and chartbook as a PDF by clicking the button in the bottom-right corner.
For anyone new or existing, I have put together a guide to using and interpreting the output from our daily scans.
A reminder that I am currently running a 7-day free trial for anyone interested in exploring the full offering.
Behind the paywall, I am outlining my current macro view and roadmap, which I am slowly building. I am also working on a separate post for subscribers outlining the similarities between the present and recent history. I am not normally a fan of analogs, but I think we have a setup similar to what we experienced during that historic period. No history, of course, repeats, but it’s interesting to look at similarities and then see how things develop from there.
Then we take the normal turn in exploring Macro D’s vision of the macro world and checking out his latest weekly performance spreadsheet, all laid out, every single trade, entry, exit and stop for full transparency.
I then quickly review this week’s macro calendar before we analyse the latest Dashboard signals and explore the asset allocation model’s latest output.
Have a great week ahead, and stay cool.
