Mid-Week Update

Nirvana or Samsara?

For those less acquainted with Buddhism, nirvana is the ultimate liberation: the cessation of suffering, desire, and the cycle of rebirth. The direct opposite of nirvana in Buddhist thought is samsara, the endless cycle of birth, death, and rebirth characterised by suffering, ignorance, and attachment. While nirvana represents freedom from suffering and the fires of greed, hatred, and delusion, samsara is marked by their continual presence.

Needless to say, since the surprise China/US deal, markets have been feeling euphoric and in a state reminiscent of an epic grunge band.

What’s next? Over the past few days, I was only in observation mode, looking at how markets would settle after the news. Tuesday saw the continuation of the risk buying, while the USD unwound a large degree of Monday’s rally. Similarly, US Treasuries were weaker after a lower-than-expected inflation print, which could be stale given that none of the tariff effects have yet to surface.

Interestingly, we are approaching 5% in US 30-year treasury yields without the panic, which accompanied the move to that level during the panic in April. We are potentially setting up for the next macro story, namely the fiscal situation, which, given increasing deficits, still has to be addressed. I would keep an eye on these developments. So far, markets don’t seem overly concerned about this potential narrative.

US 30-year real rates are closing in on 2-decade highs. Why are we seeing those levels? Are they not attractive enough? If you think equilibrium rates are lower, a recession is likely and potential growth should not be too dissimilar from the previous decade, why are we here?

I think there are various reasons, but the most important one is possibly around the additional term and real premium investors are demanding for holding a long-duration asset of a currently fiscally challenged issuer.

While my 2025 buy-and-hold portfolio is nicely back close to 8% YTD (not including today’s performance, which probably added another 1%), the tactical side of my macro process has been doing well thanks to some timely technical signals my models have given us.

A reminder that you can now also use my models in TradingView scripts, which I made available for subscribers to use on their charts. This is not for free and incurs an additional cost.

If you are interested, ping me an email with your TV username. Note that only paying subscribers will be granted access. No exceptions.

My roadmap for April served me and hopefully all my followers very well. Find the full write-up below. I think this roadmap is still very much in play. The 90-day pause might mean to some that the tariff concerns are now in the past. I think that’s wrong.

I think the friction might have paused, but that’s about it. It’s like two heavyweight fighters deciding to postpone the championship fight so they can train a bit longer, but the punching will very much happen when the time comes.

Given the state of markets, it’s interesting that the models are throwing out some counterintuitive signals at the current juncture.

Let’s explore