BY ANDREW GIOVINAZZI
August 6th, 2025
They’re all made in Switzerland—except for the VIX. Yes, those famously neutral Swiss, who generally sail along smoothly aside from the occasional financial scandal involving one of their giant banks. I came across the following headline:
If I’d known they were planning to make a deal beforehand, I would have predicted the market rally that followed.
But here’s the thing – there’s actually a way to stay ahead of these moves.
Want to know when the next major trade announcement is coming?
The USA is running a deficit with every other country
With President Trump maintaining lower tariffs, foreign leaders are making visits to the U.S., recognizing they have limited alternatives—America remains the top destination for many global exporters. As the U.S. seeks financial contributions from allied nations for its longstanding role as the global security provider, these leaders are now under pressure to negotiate new agreements. Many countries have thrived economically while relying heavily on U.S. defense support, often contributing little in return.
That model sustained the global order for years—until Congress lost sight of its duty to practice fiscal discipline. History makes one thing clear: Congress will spend whatever it collects. And it’s been more than 25 years since a genuine fiscal conservative held real sway in the House.
The Swiss Test was just a preview of what’s likely to unfold in the coming weeks. As I mentioned last week, we saw unusually high VIX futures premiums despite historically low actual market volatility. Now, VIX futures have returned to the exact levels seen when the VIX hit a relative low on July 29th. See below:
VIX futures curve Jul 29 and Aug 06
Traders kept volatility elevated leading into the event, and they’ve now absorbed nearly a 2-point spike in VIX cash. It almost feels as if they had advance warning. With Trump holding the leverage, this appears to be the direction things are headed.
However, traders are releasing volatility pressure gradually. We can expect to see more of it unwind over the course of this week.
To Your Trading Success,
AG
