Morning from Copenhagen.

We have one more week of economic calendar silence before the big figures—NFP, ISM Manufacturing, and the like—arrive at the start of March. That leaves us in another one of those weeks where trends will likely prevail in macro. We continue to lean long on European equities and short USD/JPY going into the week, and even gold could extend its rally. However, the underlying fundamentals are slowly but surely turning, making the case for gold weaker going forward.

The calendar this week consists mostly of inflation data across the globe, with U.S. PCE along with European HICP figures from Spain, France, and Germany, as well as Japanese Tokyo CPI, all released on Friday. Until then, there are few macro events likely to shift sentiment.

Since inflation is the main macro focus this week, it’s worth examining our models to see how inflation trends are shaping up in both the U.S. and Eurozone ahead of Friday’s releases. Our nowcasting models have already captured a growing divergence in growth—with U.S. growth softening due to DOGE, affecting both hiring and broader economic sentiment, while Eurozone growth is accelerating. Now, we’re seeing a similar divergence in inflation trends, but with opposite signs. The inflation outlook is becoming more benign in Europe compared to the U.S. over the next 1–2 quarters, aligning with official consensus for EU HICP prints on Friday, where markets largely expect European inflation to continue trending lower.

This adds yet another compelling argument for European assets—both in equities and FX, where EUR/USD is starting to show signs of life, especially after Trump’s comments on Friday suggesting that Europe is “behaving nicely” from a trade perspective.

Chart 1a: Inflation Stays High in the U.S.