With a number of longer-term moving averages signaling reversals in several currencies, fresh record highs in a number of global equity market measures and crude oil prices managing to hold $10 to $12 a barrel above their 2015 lows, global macroeconomic prospects are improving.
While the latest string of US economic data sparked some concern over growth prospects, there have been a number of bright spots from China and the Euro zone.
While US economic activity appears to have faltered a bit, evidence of recovery in the Euro zone is starting to surface.
From the recent action in Treasuries, stocks and physical commodities, one could come to the conclusion that the global economic condition remains suspect.
The US economy has bulldogged its way to growth in February, despite adverse weather, ongoing energy sector layoffs, adverse foreign exchange rate action and periodic talk of rising US interest rates.
Not surprisingly, the Euro zone debt crisis continues to linger, and the situation in the Ukraine remains highly fluid.
Global Negative Sentiment in many ways has probably already exceeded rationality. To the bears’ credit, unrelenting declines in crude oil, copper and equities justifies some fear of slackening demand.
The events in the second half of 2014 will do more to stimulate the global economy than all the central bank and governmental efforts combined.
The recent market action appears to have been a capitulation event that has exaggerated global slowing fears.
Negative headline news has reached a fever pitch, seasonal commodity price pressure remains in place, adverse Dollar action dominates, and perhaps most importantly, the international economic outlook continues to deteriorate.