Saturday Macro Note: No Deal for Now
In this brief Saturday Macro Note - we cover the latest geopolitical developments from the evening - and lay the foundation for the Weekly Macro Note tomorrow.
Don Johnson (@DonMiami3), Chief Economist
Good Saturday evening MacroEdge Readers and Community,
This will be a concise update given the latest updates on the geopolitical front - and due to the fact that I expect things to remain fluid over the next 24 hours and beyond. The big news of the evening (obviously), which we broke through the @MacroEdgeRes account, was the fact that the Iranian delegation rejected multiple offers from the US delegation in Pakistan to find peace. While there is no news on the ceasefire to this point, the IDF may make some moves here over the next few days, and things could once again move quickly in the wrong direction as both delegations make their way back to their respective countries. On the Iran front, it appears that they have no interest in ceding any control over the Strait of Hormuz back to any other GCC country, and this continues to be their ‘nuclear option’ that few experts expected they would actually utilize in any conflict. Obviously, they still retain the real nuclear option through their proxies to close the Red Sea, though I do not expect that we will see that utilized for the time being, given that it would get more nations involved in the conflict directly. Right now, we’re still on an accelerated timeline for the energy shock (and physical shortages) to begin hitting East Asia this week, and Europe the following, especially with jet fuel and distillates, as the last tanker from the Middle East arrives there this week.
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Strait crossings remain near zero, and just a few tankers have made the crossing since the ceasefire began. The measure now appears more of a buy time deal for both sides to reload up on the munitions front, barring any progress in talks here now over the next 24 hours… the further we get away from the time of the meetings that just occurred, the more likely we are to see the conflict flare up again, and go ‘hot’. This is a huge deal, and contrary to what some faux experts on X claim as this being something like 5 days of supply impacted in total, the aggregate shortage in the physical markets continues to build as the 13mbpd in production offline compounds daily. Even with VLCCs rushing to the Gulf Coast to get product to East Asian and European markets, this will only serve as a band-aid, the longer the Strait remains closed. Before jumping to any conclusion, or jumping the gun, we’ll let the next day play out and see how things progress into the futures open in the US before diving into the Weekly Macro Note.
We continue to live in unprecedented times day after day, and even in the face of this tumult, it’s our job to continue to see through the clouds and deliver intelligent strategies to you all.
Setting the Schedule for the ‘On the Ground’ Series
Given the popularity of our energy sector and data center reports in February and March, which both incorporated a significant amount of anecdotal information collected on the ground, we’re going to expand our ‘on the ground’ data and research with this new series.
Agriculture: A Deep ‘On The Ground’ Dive Into Wheat and Corn - May 2025
Data Center - The New Shale Series - May 2025 and on
Energy Pt. 2 - An Update from the Permian and Bakken - May 2025
Aviation - America’s Favorite Public Utility - June 2025
Over the next week, we will publish the exact dates for each report, and a calendar will be discoverable through a new link on the club.macroedge.world - so stay tuned for the May and June dates.
Given the speed of news, market data, and price action of late, I don’t want to chain all of our coverage down to slower processes and methodologies, which are all designed with profiting from a portfolio strategy or basket as an absolute #1 priority. The above is designed to be a starting point for us being early to trends, and then follow-up on them as we capture the opportunity (ie: energy), which is really part 3 of the series since it will mark our third visit to the Permian in the last few months.
