Morning Brew May 27 2025

Good morning,

Trade news seem to be the driving force for now, European Equities traded rather friendly yesterday, the Dax gained 1.7% on the 50% tariffs not taking effect on July 1^st. With the US and the UK closed yesterday trading was failrly uninspired yesterday.

US Yields are trading lower today with the 10 year at 4.47 and the 30 at 4.98, the USD Index rises to 99. EURUSD is 1.1380, GBPUSD 1.3550 and USDJPY 143.10, USDCHF 0.8215

Gold and Silver are 3325 and 33.15, Platinum 1085. Silver need to break above the 33.70 for real upside potential, gold is currently struggling with a descending trendline from the high early April. Support level are near the 3300 and 33/32.90

Rheinmetall can gain on rising aggression in Ukraine and is now at 1834, a year-to-date performance of 200%.

BYD weighed on EV makers by announcing sharp discounts, BYD fell 9%, Geely 8.6% and NIO 3.5%. Tesla Sales in Europe declined 46% this year and Tesla has been outsold by BYD for the first time, this could weigh on Tesla today.

The trade negotiations between the EU and the US are likely to be in focus this week, we are also expecting decently important US data, with Durable Goods Orders, the Case-Shiller Home Price Index and Consumer Confidence. German GfK and CPI from France, Italy and Spain will only be significant if a surprise.

The next key datapoints will take some time to come out as the impact from the tariffs has not yet really made it into the data.

Biggest event risk remains with the US Administration, yesterday, Trump called Russian President Putin absolutely crazy…

While we wait how the day will develop after the US and UK holiday, here are some interesting publications from our strats team:

Hardy’s Macro View: Rule #2 for the Trump 2.0 market era.

Rule #2: The real value of US equities is excessive and dangerously concentrated, but timing how this unwinds is impossible.
The US equity market completely dominates global markets, with US stocks making up nearly 75% of the MSCI World global stock index at the peak in US equities at the start of this year. This is a record share and compares with 55% ten years ago and well under 50% back in the 1990’s. Part of that enormous size is due to US stocks valuations compared to global peers. 

Our latest Podcast is out: The TACO trade engages once again | Saxo Bank Switzerland

It's a new week and we have the latest example of what an FT columnist has called the TACO trade engaging once again: Trump Always Chickens Out. In this case, it was Trump's announcement late yesterday to delay the threat to slap 50% tariffs on the EU already to July 9 rather than June 1

How to use cash-secured puts to buy UBS stock (or earn income while you wait)

If you’re interested in buying UBS shares - but only at a better price - there’s a simple, conservative strategy that lets you “get paid to wait.” It’s called a cash-secured put, and it may be the most practical way for long-term investors to either buy UBS at a discount or earn a bit of extra income if the shares don’t get cheaper

Nvidia earnings coming up: Will the AI superstar keep flying high, or is turbulence ahead?

• Nvidia is expected to deliver strong revenue growth driven by AI chip demand, with high investor expectations for performance.
• Margins face short-term pressure from production ramp-up and export restrictions but are expected to recover.
• Geopolitical risks, particularly US-China tensions, pose significant challenges, though Nvidia is actively adapting to mitigate impacts.

COT Report: Hedge funds return to gold; elevated grains short ahead of key season

• Our weekly commitment of traders update highlights futures positions and changes made by hedge funds across forex and commodities during the week ending Tuesday, 20 May 2025.
• Speculators bought USD in a delayed reaction to the short-lived bounceback that followed the recent 90-day trade truce announcement.
• In commodities, hedge funds responded with limited enthusiasm—partly due to the current lack of clear trends across several major commodities, many of which have experienced volatile but rangebound trading, and partly due to ongoing tariff flip-flopping.
• While gold saw buyers return following weeks of net selling, surging platinum forced speculators to flip positions back to a net long.
• The grains net short reached a nine-month high—and the highest seasonal level since 2019—just ahead of the important and often volatile growing season.

Tuesday, May 27

• GfK Consumer confidence
• CH Trade

- US: Durable Goods Orders, S&P/Case-Shiller Home Price Index, Consumer Confidence (May)

- France, Italy, Spain: Preliminary May inflation data

Wednesday, May 28

- US: Richmond Fed Manufacturing Index (May), 10:00 AM[7]

- Major US earnings: NVIDIA (NVDA, AMC), Salesforce (CRM, AMC), Synopsys (SNPS, AMC)[5]

Thursday, May 29

- US: GDP (Q1, Second Estimate) Initial Jobless Claims, Pending Home Sales (April)

- Canada: Current Account

- Japan: Unemployment Rate (April), 7:30 PM; Industrial Production (April, Preliminary),

Friday, May 30

- US: PCE Inflation (April

- US: Chicago PMI (May),

- Canada: GDP (Q1)

 Major Earnings (Selected Highlights)

 Date          Company            Timing   

--------------------------------------------

 May 27 (Tue)  HP (HPQ)           AMC      

 May 28 (Wed)  NVIDIA (NVDA)      AMC      

 May 28 (Wed)  Salesforce (CRM)   AMC      

 May 28 (Wed)  Synopsys (SNPS)    AMC