Daily Newsletter 5/27/25
Signal over news
The art of reading the market’s pulse beneath the surface drama
Markets were on edge as the threat of steep tariffs and intensifying trade tensions loomed, so Trump’s decision to hit pause is now seen as a rare chance for negotiators to step back from the brink and possibly dial down the drama. Still, with the fate of U.S.-EU trade talks hanging in the balance and broader economic clouds on the horizon, many investors remain wary—watching for the next plot twist before diving back in.
Futures rose approximately 1% on Monday night, maintaining the gains seen throughout the weekend.
Gold prices declined in response to the stronger equity outlook.
Early indicators suggest that next session is likely to open on a positive note. The DAX also posted robust gains.
Notably, current positioning and sentiment data do not reflect excessive optimism among investors.
We believe it is especially critical right now to keep a close watch on the bond market, as ongoing developments there could have significant spillover effects on the broader financial system if there is no substantial shift in current fiscal policy.
The recent turbulence reflects so-called bond vigilantes* signaling their dissatisfaction with the government’s fiscal stance, particularly in light of escalating tariff tensions and the global trade war combined with high levels of public debt. Their actions are less about technical trading strategies, such as basis trades, and more about genuine concerns over the long-term trajectory of yields and fiscal sustainability.
We are also dedicating significant attention and resources to European equities, which are likely to be impacted by the latest tariff developments, as well as to gold, oil, and cryptocurrencies.
U.S. crypto regulation is in the midst of major transformation, and we believe that developments over the coming weeks and months will be pivotal in shaping the future of the crypto industry and decentralized finance. As early adopters in DeFi, we remain confident in its long-term potential—a promise that no investor should ignore. That said, DeFi still faces significant hurdles and has considerable ground to cover before reaching maturity.
We’re keeping a keen eye on the crypto market’s pulse as momentum builds. Investor enthusiasm is surging across both retail and institutional arenas, while on-chain data reveals a compelling story of growing accumulation and heightened network activity—signals that hint at a dynamic next chapter for digital assets.
Without a doubt, we view U.S. regulation as the primary catalyst shaping this narrative.
We believe the market’s direction remains uncertain, and we expect this cat-and-mouse dynamic to continue, with prices reacting sharply to even the smallest bits of information. However, as macro investors, our focus is on interpreting underlying signals rather than reacting to headline news.
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