Iran Tensions Trigger Global Alarm | Macro Mondays (June 23, 2025)
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Hello there, welcome to another edition of Macro Mondays. My name is Mikkel Olsenwall and I'm joined as usual here live from Copenhagen by my usual co-host André Astino. Welcome to the show André Astino.

Thanks, Pekul. What a weekend, first of all, with action in Iran. At some point, I started smoking again yesterday since the tension was pretty elevated in many ways. Crypto markets sold off in liquidity and all of that, but we're rebounding as we speak. And we've been very, very firm on that conclusion. We'll obviously get back to why. So I think we've

We've kind of reached peak World War III years over the past 24 hours and without a lot of marital substance to it, to be honest.

Yeah, absolutely. I think it's been another one of those weekends. We've had a lot of them this year, I think, Andreas. I didn't start to smoke. My wife started smoking, probably because I was on the phone the entire weekend. But that's how it is, Andreas. We'll try and unwrap all of that. It's been a crazy six months, Andreas. And it feels like every episode of Macro Mondays has almost turned into a special or a breaking episode. So we're going to try over the next few weeks to get back to some of the roots of the show.

A bit more of the hot takes, fun stuff we find online and try to cut some of that. Still, we're going to try and be very, very actionable, give you all our best trade ideas. So remember out there, this is not investment advice and our trade ideas and analysis might be... Sometimes it may be good, sometimes it may be shit. Absolutely. We have to get with that one there. Okay, Andres, you asked me earlier today, and I'm still not quite sure I get it, if I am part of the, what was it, the woke right movement?

We've got this lovely, lovely meme by Eli David. It seems like, Andreas, we have it on the screen here. So, Andreas, this seems to almost be the trend right now, that the MAGA movement, the Republican movement, is sort of split on this issue. What even is woke right? I don't know. As far as I can see here, we have the Ayatollah giving Alex Jones a golden shower, right, at

I guess Alex Jones kind of hinted over the weekend that he was against the policy decisions made by Trump, Rubio, and his ilk. And I guess this is a newcomer in a sense to US politics that there's a divide within the Republican Party on this Israel issue.

We've been kind of used to that internal divide between the left and right wing of the Democrats. But I kind of get the vibe that Trump needs to solve this Iran issue fairly quickly to avoid some sort of internal battleground surrounding the support of Israel, surrounding this non-interventionism that he basically campaigned on.

So Mikkel, how do you view this and the impact on the internal political agenda in the US? It seems like this is a big deal in many ways. Absolutely. I think, first of all, this is why Trump hesitated last week. We had some announcement that he's going to make a decision within 14 days. Then it came a few days later. I think he was very hesitant because of the reaction he received from parts of his own movement.

I saw some opinion polling. It seems like most of his voter base is moving with him. That's what we've seen historically. But there are some very significant figures within the Republican Party really objecting to this. So unless he can make this a clean hit and run situation, he could face some trouble getting his big, beautiful bill through Congress. He could face some

internal divisions in the Republican Party. We've already seen Elon attacking the big, beautiful bill. If these movements are somehow aligned, the anti-war part of the movement, if they can frame Trump or if he's framed as a, I like to call it a spend and bomb Republican, that could raise some issues for his domestic agenda. I did a show with Jacob Shapiro on Thursday. You can watch it on Real Vision.

for those of you with a pro license in there. He compares this to Lyndon B. Johnson. We don't want to go too much into the history lessons, but essentially the Vietnam War, which Lyndon B. Johnson doubled down on, ended up torpedoing his domestic agenda of the Great Society, etc. So we're not there at all yet, but there are some similarities. It's a very, very interesting skit from this.

Still, for the time being, Trump is moving his voter base. They're following him. So he's okay at the moment, but he's under immense pressure to get this over with very, very quickly. There were some other memes of he's one of them, isn't he? Referring to that Trump is sort of a new Bush or a new Ocon, new Neocon. And that's not good for him. So, Michael, one angle.

to this and watching the press conference late Saturday local time here in Europe where he announced the attack on the nuclear facilities in Iran. We basically had Marco Rubio standing on one side and JD Vance standing on the other side. Maybe that was kind of symbolic ahead of 2028, one part of the party basically backing this and one part of the party not backing this Iran agenda, right?

Yeah, to me it almost seemed biblical. Like you have the angel on one shoulder and the devil on the other shoulder. I'm not sure that's how it is to be read. But absolutely, this could be defining for Trump's presidency if this tracks on. It could lead to a real schism within his own administration, within the Republican Party. I mean, no Republican candidate can really –

entering to the general election as a pro-war candidate. Those times are over. You're not going to win any elections on that. You're going to be easy pickings for whomever the Democratic elect. And first and foremost, we have the midterms where a lot of Republicans are going to weigh on how closely linked they're going to be to Donald Trump. So very, very interesting dynamics, Andreas. I think we should

turn our attention to how the markets have evaluated the situation. We've done a lot of coverage on the geopolitics of this. Again, watched my show with Jacob Shapiro here to get more of that. But I think a lot of people, Andreas, anticipated today to be a complete bloodbath in markets. It hasn't really been. What's been the reaction and how do you view that? Yeah, I'm watching my phone here just to get the latest updates and

We're firmly in green from the get-go of the trading session in the US. We even have a pretty decent rebound in some of the bombed out crypto names. And I think what we're seeing is...

textbook stuff when it comes to these geopolitical risk events unfolding over a weekend. Yesterday, we had the peak fear. We had prediction markets predicting a blockade of the Strait of Hormuz. I think we have a chart on polymarket odds of Strait of Hormuz closing. So during yesterday, we basically traded at plus 50%. And I don't really...

It's a thin market liquidity-wise, so I don't really think it was a true base case, but it kind of showed...

the level of panic or the level of fear that entered the frame yesterday, especially after that headline from Reuters. I think it was on Iran's parliament voting to actually close the trade. And in my opinion, it was kind of gullible that the market responded to that story. It was kind of gullible the way Reuters reported on that story because the parliament in the dictatorship is not

truly important. I mean, I don't know. Not in these matters anyway. This is obviously down to the Supreme Leader. And personally, I think the chance of this happening is much lower than 30%. It would be a desperate move from Iran. It would alienate their main supporters in China. So I think the chance of this is very, very low. Some further charts of the weekend race here. A lot of people posted this. I think it was a Chinese ship around. Yeah.

Yeah, Costco ship. Okay. We turned around in the straight and people are like, oh, now it's being closed. No, these things happen. It got rerouted for some reason. We brought along another chart here of the traffic through the straight. So, I mean, probably some of the insurance companies are putting a premium on sitting through the straights, but we're not seeing a blockade right now. We're not seeing a closure of the straights at all. Yeah. So, Mikkel, let me just...

mentioned that this is live from Bloomberg. It's probably delayed a little bit, but this is basically a live map of the traffic in and out. If you compile the data, we are seeing

a slowdown in you know the amount of crossings so it there is obviously a risk people there's a risk and some of these private companies decide not to go with that i think you know i i don't know why this costco ship turned around but but there's probably a reason why uh so the point here is that the straight is open uh but there's obviously a risk that is elevated

So those reporting yesterday that the Strait was closed and it was misguided and to some extent probably even deliberate to try and push a short-sailing narrative. The Strait is wide open. Remember that the Strait consists of both the Iranian and Omanian waters. So most parts of the Strait

east to western bound traffic where they're basically sailing in another country's water so it would be a major escalation for Iran to try and you know block that part of the strait and it probably won't happen and I'll

I'd like to show one of the so-called hot takes of the week, one of the new covers to our show, Mikko, because I have a hot take from basically kind of a representative of the Saudi Arabian stance on this. We've had Anas Al-Hajji

And he's basically ridiculing everyone trying to pitch the notion that this strike will close. We're also talking about a substantial part of the Saudi Arabian exports of energy going through the strait, right? They obviously have ports for Dublin, Jeddah, where they can ship out oil and so on and so forth in another direction. But in any case, we're talking about very, very powerful local markets.

such as Saudi Arabia, Qatar, etc. that would be harmed a lot by such closure.

Thank you.

I mean...

The oil that comes through the strait, yeah, some of it goes to the West, but most of it goes to China. They're by far the biggest taker of all this oil. This would hurt them a lot more than it would hurt the US because, I mean, this is like 2002 logic to me that, oh, the US is doing all this to get the oil. No, no, no, no, no. The US is almost self-sufficient in oil, or they could be if they wanted to.

from the US or Canada. I mean, in Europe, yeah, we're buying some oil from down there, but it's mostly from other sources. So this would mainly be a problem for China. And that's why I think this would make no sense from Iran, unless they're like a cornered animal just

desperately trying to create some trouble. I don't really see why they would do this. Let's show the truth post by Donald Trump 15 minutes ago. So it's not like he doesn't care. Everyone keep oil prices down. I'm watching you're playing right into the hands of the enemy. Don't do it. I don't know who he's specifically referring to here, whether it's Saudi Arabia, Iran, or whoever it is, maybe local producers even. But

The point here is that it's now at the center of his attention, this energy price spike. So in my opinion, it speaks in favor of him allowing Uranus to do more or less whatever they want from here. I think you've had that thesis as well over the past 24 hours that we get some sort of – you've called it a white piece that he'll kind of allow them to do whatever they want from here. He's done everything.

Yeah. So very, very briefly, strategically, the way I see it, first of all, I think this tweet will have the opposite effect of what he's hoping for. The signal to the U.S. president is in all desperation. And I think also his communication after the strike signal that he wants to end this now. And it's kind of the same mistake he made when he entered negotiations with Ukraine, that he enters negotiations where everyone knows that he wants them to be finished very, very quickly. And that's a horrible way to enter negotiations.

Anyway, this probably means that the U.S. and Israel, they won't have too many demands of Iran because why would Iran surrender a lot of stuff right now? I mean...

I know bombs are falling left, right and center down there, but they could probably go on for a few weeks and that would be a huge problem for Trump. So I think what's most likely is that we'll have some sort of de-escalation, some sort of deal between the U.S. and Iran. It doesn't have to include a lot of things. Maybe it will include Iran pledging a freeze to its nuclear activities and a freeze to supplying some of these groups. Could even include lifting some sanctions on Iran. Let's see.

In any case, Trump really, really needs it. He was very, very clear also in his communication around this strike that this was a one-off. They wanted to present this as a fait accompli, that they've done this and now it's a new situation. This doesn't start anything. Obviously, the Iranians communicated otherwise. So,

The point is, Iran is going to retaliate to the strike. Okay, that's going to come today, tomorrow, Wednesday, we don't know. The US expects this. They're going to accept that as long as it's within reasonable scope. After that, I think we have to get that out of the system. After that, I think it's very likely that we'll see a quick deal. At least that's what Trump is going to push for. Yeah.

So that's the outlook for me. But, Michael, my best guess is that the oil price peaked at the open on Monday.

So the futures market opened between Sunday and Monday, a little bit more than $80 per barrel for Brent. And we've seen, you know, fading price action ever since. It's again textbook when you see over the weekend action that you get this gap opening and then sort of a fading price action. It's exactly the same, just...

the opposite way around for equities. We saw a gap lower and then slowly but surely we retraced higher. And my best guess would be that we end the trading day firmly in green territory. And I was probably more or less the only one betting on that yesterday. The amount of insult I perceived on SoMeet stating that, yeah.

It was kind of telling. And even Andrew Tate went on YouTube to tell everyone that oil would be through the roof today. I guess that's kind of telling for the sentiment. Live from some Romanian outback city there. Recording that from. Absolutely. Let's move on to some of the investment thematics here, Andreas. Yeah.

We've talked about the oil price. Maybe we should bring up this chart of the Iranian market share as compared to Saudi Arabia. That's just one point I want to get in here, that the big winner of all this right now is Saudi Arabia. They've been pumping oil out onto the markets. Prices are rising while they're regaining market share slowly. Dreamland scenario for Saudi Arabia, essentially.

Yeah. I mean, as you can see from the dark blue line here, Saudi Arabia has slowly but surely started normalizing their production levels. They were still more than a million barrels a day away from their production target from 2022. And it was in many ways...

a situation that they couldn't live with for long, the situation we had in '23 and '24 where they had to artificially keep their production down while, for example, Iran pumped out oil in a way that they had done for years. So Saudi Arabia lost market shares to Iran. They lost market shares to the US. They basically lost market shares to everyone. They were the only ones trying to keep supply contained.

For now, they have this cocktail of Iran at least threatening to wreak havoc on the supply from the Middle East, but they're not really wreaking havoc on the supply. So you should more view the current price action in oil as some sort of insurance premium in the oil price because the supply is actually okay-ish.

And on the other side of this, I would still argue that the market is vastly oversupplied. You can see on chart 16, Mikkel, that the overall supply will likely exceed demand unless we get a demand spike during the second quarter here. And we're potentially talking a few million barrels a day. It's quite an oversupply. So the only reason why we're seeing this acceleration right now is the supply side.

the demand side is not there to cope with this increase from saudi arabia and opec overall uh so yeah they have they kind of they're kind of in a sweet spot right now for as long as it doesn't escalate into a complete um a meltdown of the supply from the middle east through the strait of humus which again let me stress that we could be clearer

the risk of that is vastly overstated. And I think that's one of the reasons why you can be bullish this week.

Not on oil, but on everything else. Okay, Andreas, let's move on to how to navigate this. So essentially the thesis, people are panicking out there. That makes this a buying situation. It seems like the markets reacted in that way as well here on Monday. We brought in a few charts here for how to navigate this. What do you want to start with, Andreas? Maybe we can set the scene with a tweet from a geopolitical analyst called Philip Jokin. Maybe you can...

Philip on the platform sometime this June or July. He's very much anti-Western in his thesis in many ways, a big fourth turning guy. And I kind of get why you end up spending a lot of your bandwidth on this fourth turning and all of the geopolitical risks out there because it is...

frankly very tempting to do so. And he tweeted this yesterday, right? That, okay, it's actually happening, referring to the Strait of Hormuz.

closed and a blast of inflation that could hit 7%, 8%. The West is not able to cope with it. We'll basically see a complete decline. I don't agree with this, but this is a very common take out there right now, that the West will basically falter should we get a new wave of inflation. My best guess, and that's also what I've written in the editorial available for pro members of Real Vision, flash updating you on everything related to markets after this, besides

bizarre weekend, is that China is in a much worse spot should this happen than the US.

Absolutely, absolutely. And I mean, this is a very, very strange situation because Iran is completely isolated right now. They used to have the backing of Russia. They have a defensive pact with Russia. They haven't lifted a finger in support of Iran. China hasn't lifted a finger in support of Iran here. So Iran is very, very much isolated. Israel and the US are solving a lot of problems. We can discuss the long-term implications of this. They might not all be positive. We've done so in other shows, but I mean,

Very, very short term point of view, Israel has really cleaned up shop in the Middle East. From a cynical perspective, they destroyed the more or less, we'll see the effect of the bombing, more or less destroyed the nuclear program of Iran. Might even provoke a regime change. So right now, it's very, very hard to see this as a defeat for the US, I have to say.

And yeah, of course, there are some risks to inflation. We heard these inflation targets as well around Liberation Day. Where is that inflation? Is it in the room with us? I don't know, Andreas. I think this is way, way overstated. And the death of the West is way overreported right now, we have to say. Yeah, I agree. But it feels kind of odd to discuss this from...

our location in Northern Europe because we're kind of not invited in a sense. It doesn't really feel like we're involved. We obviously have these talks between

the UK, France, Germany, and Iran on Friday, and nothing really happened there. And I think that was kind of where Trump ran out of patience. So obviously, Europe is in a soft spot here in many ways as well, but Asia as well. Let's go to the few market takeaways I have to conclude the show, and you'll have to read our editorial and portfolio updates to get all the juice.

But this is a chart of the oil price. As you can see, we peaked right around 80 from the get-go of the trading session overnight. And we've slowly descended basically through the day, and it seems like peak panic is behind us. When you look at it in a slightly longer time frame, or a longer time frame, on the next chart, it's really, really key levels here.

We kind of spiked above trend line.

but we're now slowly but surely descending below so it could be a fake breakout and as you as you've seen basically through uh 22 23 and 24 this trend line has been incredibly solid and my best guess would be that the oil price has peaked um in all transparency we offloaded our oil position late last week uh just ahead of peak fears and uh yeah i'm pretty satisfied with that position uh or that change of position uh since

Yeah, absolutely. And I mean, this curve could have been even steeper if the Saudi Arabians hadn't... Yeah, sure.

played around with their supply. And I think that is the overall trend also that's going to push this further down. The Saudi Arabians are so far still committed to some sort of price war. They're committed to taking back their market shares. They're seeing inside of countries like Iraq and Kazakhstan cheating on the weight. And so the coherence within OPEC is still very, very fragmented.

And when you have a price cartel essentially falling apart, that usually means lower prices and stronger competition overall. Yeah. So, I mean, of course, I acknowledge that tail risk of a...

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Switch to Apple Cash and start sending privately. Apple Cash services are provided by Green Dot Bank member FDIC. You know, closure of the Strait of Hormuz. But I actually think it is more likely that oil will go to 50 than 100.

um yeah i agree because and the market is oversupplied should should this end up as a nothing in many ways and address this chart here this wouldn't be you without a couple of fx pairs uh a link to fx what's uh what's your takeaways here yeah so um i'm actually kind of surprised that we haven't seen a stronger dollar through this uh we've seen some early signs of it over the past couple of trading days but what you typically see should

energy prices remain somewhat elevated for a while. And my best guess, as I said, is that oil has peaked, but it will slowly but surely descend. The wall of worry is still there. It will take time to get that insurance premium out of the market. And that is oftentimes good news for the dollar versus, for example, the Japanese yen. That's what you can see in the

this heat map, while one of the few currencies that will actually gain some ground versus the dollar in such a scenario is the Mexican peso, probably since it is a country with an okay energy balance, but also since LATAM central banks, they're used to fighting inflation. So this is typically good news for the dollar and the

surrounding countries, Canada, Mexico versus European countries and versus Asia to a large extent, as you can see with Japanese yen. The reason obviously being, and that's basically what we referred to when we discussed the straight of the moose earlier, Japan is very dependent on the straight of the moose. China is very dependent on the straight of the moose. Mexico, US, they're not.

And they're not going to be dependent on administrative moves anytime soon, if ever again. So I think that's very noteworthy. And that's also why I'm happy to see the market rebounding, at least when I checked the phone the last time here, it really looked like a true rebound into the opening of the session here, because that's maybe the final point I want to make. That's typically what we see when we have swift and efficient markets.

intervention from the US military. We saw that with Operation Desert Storm. We saw that with the bombing of Yugoslavia. I'm not trying to pick a side on the moral aspects of this. I'm just merely stating the fact that it's often taken as good news for especially US risk assets. And let me conclude with this thesis. The US is obviously

not keen on seeing the Strait of Hormuz being closed. And to ensure that the Strait is not closed, they probably have to cooperate with China on this topic or at least not provoke a response from China. So I wouldn't rule out that China will get another discount on tariffs just to ensure that they stay on top of this Strait of Hormuz topic and that they use all of their resources

diplomatic channels with Iran to tell Iran, don't do it. So I think the US risk asset space looks promising. I also think Chinese risk assets look promising given this context.

Great stuff, Andreas. That was all for us this week. Remember to watch the Macro Meets Micro on Wednesday. A lot of very, very actionable stock picks in there. You have to be a pro subscriber for that. If you're not, you can still watch Macro Mondays every Monday for free, but we really suggest you take a look at Real Vision Offering. So that's all for this week and the hectic weekend. Let's see if we can match that next Monday, Andreas.

Great to talk to you. Thank you to all of you for listening. We'll be back next week.

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