AI-generated
Three delegations sat at the table in Abu Dhabi. Europe waited outside the room in which its own security order was being discussed, in words Moscow has used since 2008. Meanwhile Sweden keeps growing, euro area inflation hits 4% and Washington shields the chief executive of Nvidia. Who is actually negotiating on Europe's behalf, and who will pay the bill?
Since the midterms, data centres have been put under a political lid and petrol is getting cheaper. Investors could be forgiven for thinking the Fed's inflation problem is fading with them. Yet on Tuesday a Fed governor said he would hike even on good news, and hours later the price data came in. So what is still feeding the fire?
China has reported a trillion-dollar trade surplus for the second year running, and from the quayside in Shanghai it looks like the world's most successful economy. Yet factory-gate prices, deposit rates and Europe's trade figures tell a different story. Is this really a success, or is someone else quietly paying the bill?
For three years, a picture of a cat in a spacesuit riding a flamingo cost nothing, at least for whoever asked for it. Last week, someone else sent the bill back, from a closed-door summons in Washington to a Texas governor-elect and activists inside a Microsoft site in Amsterdam. Markets call it a correction. What exactly would it be correcting back to?
On Wednesday, investors bet that a Democratic Congress would save the AI spenders from themselves. On Thursday, they changed their minds. The S&P 500 is still only in correction territory, but chip stocks tell another story. Is "correction" still the right word when nobody knows what unruly Democrats will do – or what it may cost them?
Democrats took both chambers on Tuesday and oil collapsed, so bond investors should have been celebrating. Beneath a calm 10-year yield, however, two opposite moves cancelled out, and one of them matters far more for Europe than the election itself. What exactly did American voters change, and what did they leave on Europe's bill?
For two years, markets have priced the will of one man. From January, they must also price a Congress with the power to refuse him. Republicans lost big, the president kept his veto, and the bond market barely blinked. So who actually holds the power now, and why does Tuesday's vote leave Europe's bill where it was?
Beijing has just finished its plenum and Americans are voting today, yet Europe's bill looks the same no matter who wins. Households have started paying, and larger instalments are still to come. Autonomy will be expensive whichever path Europe takes, so the real question is how large the bill becomes, and who in Europe is prepared to pay it when it...
A record crypto heist, an unheeded spy warning, a diesel deal with Moscow and European gas at €100. Within 48 hours, the world's problems kept pointing to the same address. The question for investors is not who is to blame but who ends up paying – and whether the two things markets fear most would actually give central banks relief.
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?
