AI-generated
On paper, Europe looks cheaper than America. But a discount can be a bargain or a verdict, and which one it is depends on a question nobody can yet answer: when the AI boom settles, who actually gets paid – the builders, the users, or neither?
Two Nordic leaders rang the Kremlin to talk about peace and spent most of the call listening to medieval history. In Brazil, the state quietly stepped back from its own bond market, and German firms suddenly feel better while their customers feel worse. Which of the week's signals matters most for European real yields?
French households have rarely felt this poor, and most of them answered the survey before the riots began. The students have won concessions, yet they are back on the streets on Saturday. Paris has nothing left to offer, and the ECB meets on Thursday with inflation above target. So who, exactly, is supposed to close the gap before April?
South Korea's stock market has fallen some 40% even though analysts expect earnings to rise by more than 400%, leaving a price-earnings ratio of just four. That is the textbook signal of a cyclical top. Yet order books, export volumes and Chinese factory profits tell a different story. Which of them is reading the AI boom correctly?
German firms are more hopeful than they have been for years, and Berlin has the fiscal room France can only dream of. Yet the €500bn is barely moving, and voters who say they want reform reject it every time it gets specific. What would it take to wake Sleeping Beauty – and what happens to Bunds if she sleeps through the winter?
Wall Street reads this week's tech sell-off as a valuation story: Meta's cash flow, chip stocks, a Chinese bear market. On the streets of Paris, Milan and soon Berlin, a different bill is being argued over. Jobless claims are near multi-decade lows and profits are at their highest share since the 1950s. So why are the young protesting – and who will pay?
Measured in dollars, the yen has gone nowhere. Measured in euros, it has gained some 6% in seven weeks – the kind of move that, in the past, ended only when someone rode to the rescue. France's yields have hit 5%, AI credit stress is spreading and Japanese savers are starting to come home. So who, this time, is coming to stop it?
Beijing's most important meeting of the year is not about the economy. Paris wants Frankfurt to sweep the ice again. More oil is leaving the Gulf than before the war, yet crude is above $100. And the bond market is still treating a country with a $2tn deficit as the safe place to hide. What is everyone missing?
For a decade, Europe's populists fed on one fear. Now there are three – and each has found its own party. In Berlin, a firewall has just fallen on the side nobody was watching, and the plan on the table involves other people's flats. The question for investors is not who wins the next election, but who is left to pay the bill.
Washington has found its cautionary tale on the streets of France. Yet America runs a bigger deficit at full employment, and its interest bill now outweighs defence. For fifteen years, QE made borrowing feel free. So why can't the Fed simply ride to the rescue again – and who will send Washington the bill?
