Momentum crashes awaken value - Our weekly cross-asset views

The macro newsflow remained pretty light: no surprises from the ECB, a slightly more dovish MPC reinforcing the likelihood of a cut in March (vs April), and a hike by the RBA as expected. The US newsflow was mixed, with a record jump in the ISM Manufacturing, but confirmation of the increasing weaknesses and skills mismatches in the US job market, increasing the focus on next week NFPs.Despite this fairly calm fundamental environment, market have turned risk off this week with momentum crashes affecting equity techs, precious metals and cryptocurrencies. The micro newsflow did not help, as markets strongly sanctioned the above-expected capex announcements by US giants (forecast capex by Alphabet, Amazon, Meta and Microsoft is $650Bn!). Equity markets experienced their worst drawdown since April 2024, but at that stage the equity dispersion in the US is the main take-away, and a nice resilience in ex-US ex-China equity markets and in credit markets for now. Still, the US dollar and US govies are up this week, a sign that they can still be safe havens.