EU Goes Autocratic...
- Marc Bentin
- Dec 15, 2025
- 8 min read
BentinPartner Weekly
Dear Reader,
Please find below our latest Weekly Trend Report.
Have a nice start of the week.
Marc Bentin,
Bentinpartner GmbH
Over the past week, US stocks dropped marginally and international bond yields grinded higher despite the expected decision of the Federal Reserve to cut Fed Funds by 25bps and the decision to bring back QE and start a monthly purchase of T-bills of USD40bn “…for the purpose of maintaining an ample supply of reserves over time”, and alleviate concerns that rates in the repo market had repeatedly become disconnected with the Fed Funds rate.
As we reported on Thursday, the Fed also issued its GDP and inflation forecast, expecting GDP at 1.7% and 2.3% respectively for 2025 and 2026 and core PCE at 3% and 2.5% respectively for 2025 and 2026. Fed Chair J. Powell noted in his Q&A session that inflation remained elevated and tilted to the upside due to tariffs, observing that disinflationary pressures still prevailed in the service sector.
The Fed Chair observed that the labor market “has clearly softened” and that inflation pressures were not “Philips Curve related”, highlighting the curious observation that large corporations seem to be accelerating job cuts programs whilst people are actually not (yet) filing jobless claims.
Addressing the potential impact of AI on jobs, he reiterated the hope that past innovations generally led to improved productivity, higher earnings and in the end, new jobs, still leaving the door open for “this time to be different” (which it really looks like it will be…).
In his latest memo (transcript) Howard Marks addressed the much-asked question, “Is there a bubble in AI?” He identified the uncertainty associated with AI investments and the conspicuous parallels to previous bubbles (financial engineering and mania included).
As for the question of the AI impact on jobs that few people ignore but many faint to ignore (only too busy to try to convince themselves that the AI bubble is not one or that they will be able to escape/address it on time).
For Howard Marks, the only solution will be the “universal basic income” (which is obvious), leaving open or rather with many question marks the issue of how to finance it. Could it be that all roads will lead to more QE in the end?
On the issue of Fed Chairman J. Powell’s succession, the WSJ reported that President Trump said he was leaning toward choosing either former Fed governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the Federal Reserve next year…. ‘He thinks you have to lower interest rates,’ Trump said of Warsh. ‘And so does everybody else that I’ve talked to. Making no mystery of the finger print (mark or bruise) he intends to leave on Fed policy, Trump said he thought the next Fed chair should consult with him on where to set interest rates. ‘Typically, that’s not done anymore. It used to be done routinely. It should be done,’ Trump said. ‘It doesn’t mean—I don’t think he should do exactly what we say. But certainly we’re—I’m a smart voice and should be listened to.' Asked where he wants interest rates to be a year from now, Trump said, ‘1% and maybe lower than that.’ He said rate cuts would help the U.S. Treasury reduce the costs of financing $30 trillion in government debt. ‘We should have the lowest rate in the world,’ he also said.”
Treasury Secretary S. Bessent accelerated the US administration deregulatory push, asking the Financial Oversight Stability Council, a financial crisis-era government panel that monitors threats to the financial system, to take steps to ease regulations that they claim are strangling economic growth, the NYT reported.
The Ft published an interesting report comparing the performance of the major “quant funds”, many of which suffered a nightmare in October 2025 (including the famed Renaissance Technologies) with 2025 rolling out as being, not a bad year but one riddled with an unusually large number of unsettling, quant tremors.
Last week’s rate cut decision brought the Fed’s total easing to 175bps in 15mths which some argued led us to bubble excesses and closer to a speculative blow-off extreme in AI, leveraged lending, private Credit and crypto.
- A few weeks ago, we, along with a growing cohort of skeptics, started to follow the share price and CDS evolution (credit default swap) of ORCL as a key indicator of the market saturation regarding the circular vendor financing nature of deals announced by major AI players. Judging from last week’s closure of both ORL share price (now 40% lower than previous peak reached at the beginning of October, after a gap higher following the historic announcement of a USD300bn circular financing deal with Open AI) and CDS level (now at 151bps), the situation did not improve .
- Cryptos were back under pressure last week.
In FX, the dollar index dropped -0.6% following the Fed’s decision and Trump’s pronouncements that US interest rates should come down to 1%, “the lowest in the world”.
The dollar dropped by roughly the same amount against CNY (our preferred long vs. USD at the moment as we appreciate the need to sell the dollar but less so the need to buy the de facto offsets of the USD which his primarily EUR and at the margin GBP and JPY, especially following the recent surge in the Chinese trade surplus.
The BIS reported in its triennial survey that foreign-exchange trading surged to an all-time high this year, averaging $9.5trn per day in April after President Donald Trump’s trade tariffs roiled markets.
Silver surged to record highs, gaining more than 6% while Gold gained +2.4%, rapidly closing in towards its previous all-time high of USD4370 before a correction occurred.
We referred in last week’s Weekly Wrap-up to the 33 -ages US Security update, where the White House said Europe risked being wiped out unless it changed its politics and restores its cultural roots.
This US report highlighted among several key existential threats facing Europe, censorship of free speech and suppression of political opposition.
At the moment when the “narrative” of the EU mainstream media collides with the realities, the EU is now actively working on setting up a Ministry of Truth by preparing to sanction one of the leading and most credible voices on the Ukrainian conflict, Col. J. Baud, a former Colonel of the Swiss army who, besides having written 4 books on this conflicts and its origins, previously headed several peace-making NATO missions. He runs the risk of being added to a black list of sanctioned individuals with his European assets frozen.
We may disagree with propaganda or disinformation but not with facts and certainly not with measured, abundantly documented and academic-level research materials on a topic that is of concerns to every European and his/her siblings’ future. If he said once or twice that it was problematic that the European diplomacy is being discredited by somebody with low representativity (the smallest country in Europe), very poor analytical and objective skills, and deprived of an ability to officially speak about anything else than more sanctions against Russia (and de facto Europe) and possibly deep rooted in conflicts of interests, this is not propaganda, it is factual. And it is not worth any effort to black list Col J. Baud. It is only food for thought for those with a sense of common EU interest.
I would recommend to anyone wishing to know more about Col J. Baud and interested by the Ukrainian conflict to listen to this 2.5 hours contradictory debate dating from 2024 organized by the Free University of Brussels (ULB/VUB) titled “Il faut débattre”.
The two “professors” (with the tone of “lecturing”) addressed the other side of the debate (which included J. Baud), thinking they were talking to submissive students taking their course as a vaccine (or easy credit). What they faced instead was two calm, courteous and experienced debaters that lectured the lecturers…
Over the past week, the S&P500 dropped -0,6% (16,3% YTD) while the Nasdaq100 dropped -1,9% (20,0% YTD). The US small cap index gained 1,2% (14,9% YTD). AAPL dropped -0,2% (11,1%).
The Equally Weighed SP500 gained 0,7% (10,4% YTD), outperforming the S&P500 by 1,3%. The median SP500 YTD return closed the week at 8,7%.
Cboe Volatility Index rallied 2,1% (-9,3% YTD) to 15,74.
The Eurostoxx50 dropped 0,0% (20,1%), outperforming the S&P500 by 0,6%.
Diversified EM equities (VWO) dropped -0,8% (22,5%), underperforming the S&P500 by-0,3%.
The Dollar DXY Index (UUP) measuring the USD performance vs. other G7 currencies dropped -0,5% (-5,0%) while the MSCI EM currency index (measuring the performance of EM currencies vs. the USD) gained 0,1% (6,4%).
10Y US Treasuries dropped 5bps (-38bps ) to 4,18%. 10Y Bunds climbed 6bps (49bps ) to 2,86%. 10Y Italian BTPs underperformed rising 6bps (3bps ) to 3,55%, matching Bunds.
10Y French OAT’s dropped 5bps (38bps) to 3,58%, outperforming Bunds by -1bps.
US High Yield (HY) Average Spread over Treasuries climbed 11bps (-12bps ) to 2,75%. US Investment Grade Average OAS climbed 1bps (-3bps) to 0,84%.
In European credit markets, EUR 5Y Senior Financial Spread dropped -1bps (-8bps) to 0,55%.
Gold rallied 2,4% (63,8%) while Silver rallied 6,2% (114,4%). Major Gold Mines (GDX) rallied 5,7% (152,6%).
Goldman Sachs Commodity Index dropped -1,8% (7,2%). WTI Crude sold off by -4,4% (-19,9%).
Overnight in Asia…
Ø S&P future +18 points; Hong Kong -1.1%; Nikkei -1.1%; China -0.4%
Ø US equity futures are in a reflex rally following Friday’s poor session and Asian markets trading mostly lower amidst queasiness about the AI trade.
Ø Gold and Silver rallied overnight, each a few dollars from all-time highs.
To learn more about our AMC offering and how to invest in the trend-following, visit our Advisory web page.
If you like our Weekly, you will love our Daily!
Consider a subscription today. Discounts may apply!
To learn more about us and how we can assist you, check our website
Important Disclaimer
© Copyright by BentinPartner LLC. This communication is provided for information purposes only and for the recipient's sole use. Please do not forward it without prior authorization. It is not intended as a recommendation, an offer, or solicitation for the purchase or sale of any security or underlying asset referenced herein or investment advice. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situation, investment horizon, and particular needs. This report does not include information tailored to any particular investor. It has been prepared without any regard to the specific investment objectives, financial situation, or particular needs of any person who receives this report. Accordingly, the opinions discussed in this report may not be suitable for all investors. You should not consider any of the content in this report as legal, tax, or financial advice. The data and analysis contained herein are provided "as is" and without warranty of any kind. BentinPartner LLC, its employees, or any third party shall not have any liability for any loss sustained by anyone who has relied on the information contained in any publication published by BentinPartner LLC. The content and views expressed in this report represent the opinions of Marc Bentin and should not be construed as a guarantee of performance with respect to any referenced sector. We remind you that past performance is not necessarily indicative of future results. Although BentinPartner LLC believes the information and content included in this report have been obtained from sources considered reliable, no representation or warranty, express or implied, is provided in relation to the accuracy, completeness, or reliability of such information. This Report is also not intended to be a complete statement or summary of the industries, markets, or developments referred to in the Report.
Comments