Optimism is consensus, but that’s ok for now
Weekly Wrap - Jan 16, 2026
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Optimism is consensus, but that’s ok for now - Jan. G3 Leading Indicator Watch | [Watch Discussion]
US: Growth remains resilient with moderate upside risks on the back of a renewed fiscal impulse, continued Fed easing, and early signs of a manufacturing rebound.
China: Our growth impulse leading indicator has rolled over, while liquidity tailwinds are fading at the margin. We still like Chinese tech equities.
Eurozone: Cyclical leading indicators continue to recover. However fiscal optimism is already consensus. We are shifting our short EUR exposure to long NZD.
US
Growth: Resilient growth, fiscal drag to reverse in 2026
Labor: Coincident labor data still holding up, “jobless recovery” playbook intact
Inflation: Sticky inflation to be offset by housing disinflation and soft labor markets
Manufacturing: Manufacturing rebound still on the cards as tailwinds build
China
Growth impulse leading indicator now neutral as liquidity tailwinds fade
Not yet time to fade RMB strength, time to buy Chinese tech equities
Eurozone
Cyclical leading indicators still recovering, but fiscal optimism is consensus
Inflation stubborn, shift short EUR exposure to long NZD
EUR’s breadth vs other G10 currencies is breaking down
Global Macro Update: Short EURNZD, Short USDKRW, Long KWEB
We are refining and adding to our Global Macro Trade Ideas aligned with our 2026 Themes following recent price action and tactical model triggers. These include:
Switch to long NZD vs short EUR
Add long KRW vs short USD
Add long China internet equities (KWEB)
Sharp call on the EUR positioning shift. The consensus fiscal optimism angle is interesting becasue markets often price in policy changes before implementation, and historically EUR tends to underperform when expectations get too far ahead of actual fiscal delivery. I've noticed similar patterns in past cycles where short-term cyclical improvments get overshadowed by positioning crowding, especially when the fundamental drivers (like liquidity tailwinds in China) start fading at the margin.