With the stress tests out of the way, the market has turned its focus toward the global macro backdrop.
China is doing what China does, chugging out loads of exports and spending bucket-loads on building out an infrastructure from scratch. It may be slowing at the margin, but that is by design.
Europe has slowed far less dramatically than the market as a result of the sovereign debt crisis and the US is showing pockets of strength amid a general slowdown. All in all, not a horrible backdrop.
The market is reflecting that backdrop, selling the safe-haven dollar and buying pretty much everything else. In a reflationary world, that is a virtuous cycle. Long may it last…
