Morning Macro 17th October
Trump said he spoke with Putin in what he called a “very productive” call about ending the war in Ukraine. He plans to meet Zelenskyy today at the White House and hold an in-person meeting with Putin in Budapest to push for a possible peace deal.
Confidence in currencies has collapsed: cash allocation for institutional investors is down to its lowest since 2013, at 3.8%. Just buy gold!
Another day, another all-time high for Gold that peaked above $4376/oz (Graph 1, Bloomberg). The precious metal has added over $11 trillion in market value in 2025 alone, bringing its total worth to $25 trillion. Silver followed too, at a new all-time high of $54.45/oz.
Will the S&P go down? Investors are already cashing in profits. According to BofA Securities, last week investors sold $3 billion, with hedge fund managers leading – selling on a 4-week average basis reached $2.1 billion, bringing the weekly unwinds to the largest on record, dating back to 2008! While retail investors keep buying!
Good week for bonds! The 10-year US Treasuries are trading below 4% to their lowest in 6 months! German bonds also opened higher on Friday, as European trading reflected the global bid for havens. The 10-year yield fell four basis points to 2.53%, the lowest since June. French bonds also rose, continuing their good week.
The US Treasury posted a $198 billion budget surplus in September – the largest on record for the month and nearly quadruple consensus estimates. Receipts surged to $544 billion, led by a jump in income and corporate tax payments, while outlays dropped to $346 billion. Customs receipts were at $30 billion, up more than fourfold from a year earlier due to Trump’s tariffs. Despite the strong close to the fiscal year, the FY2025 year-to-date deficit still stands at $1.78 trillion, only slightly below last year’s. (Graph 2, US Department of the Treasury)
Meanwhile, Bessent confirmed that he is planning on a $20 billion facility for Argentina to complement the existing $20 billion currency swap that was initially agreed with the two countries. Bessent added that the US would continue to support Argentina financially if Millee’s government pursues “good policies” regardless of the election outcome!
Data today: Euro Area inflation, Fed speeches
