Written Commentary
MACRO FRAME
Global equity markets overnight tracked in positive territory again and once again definitively outperformed US equity markets. Apparently, London equities were reportedly receiving rotation investment from large US tech shares into global non-tech indices and into global mining shares! In other words, big tech/AI in the US at present is viewed as overvalued and it appears that global money managers are moving toward the strongest performing regions which is justified given ongoing significant outperformance. It should also be noted that rotation into global mining shares speaks to very bullish price outlooks for gold, silver, and copper ahead. Furthermore, money is exiting the US and moving toward Europe as recent softer European inflation measures combined with stubbornly hawkish US Federal Reserve views suggest that rate cuts by the ECB will provide support to the European economy well before the US central bank steps in and aids the US economy.
Overnight economic data included a slight uptick in Japanese CPI, relatively strong Japanese retail sales readings for January, anemic Swiss GDP, weakness in French nonfarm payrolls and contrary to overnight equity market dovish ECB dialogue a series of somewhat concerning European inflation readings from France and Spain. However, German regional inflation measures were partially soft, and the German economy is the key leading economic force in the European Union.
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