Talking about the market from the comparison of CPI composition in Europe and the United States

US CPI composition:

European CPI composition:

The largest share of the US CPI is the service industry, accounting for nearly half. Last year, the U.S. CPI fell because of the fall in energy and commodity prices, not because of the service industry. There is not much room for downward pressure on energy and commodity prices. In contrast, in Europe, more than half of the increase is due to increases in utility bills, rents, etc., and rising energy prices have a huge impact. Now that the price of natural gas in Europe has returned to the beginning of last year, and the influence of the conflict between Russia and Ukraine has dropped significantly, then I personally think that the CPI decline in Europe this year should be much faster than that in the United States. If the logic of the exchange rate remains unchanged, the appreciation of the currency whose CPI is higher will definitely benefit the US dollar in the medium term.

At the beginning of the year, this wave of shorting the US dollar should be digging a pit for people. I squatted next to the pit to take a look. The market only priced in the recession in the United States, while the fed did not raise interest rates but pushed hard to price in Europe to continue raising interest rates. I feel that the market is very emotional. I don't want to be alienated from the market, but I also don't want to make money that was fooled into it. I just do it as a range. Tell the truth: the United States is in decline, and who can survive alone in other countries? According to the current structure of the international system, the last ones to bear the harm should be the em countries. In addition, the unemployment rate in the United States is 3.5%. I want to laugh when you say recession! Why do places with an unemployment rate of 3.5% worry about a recession, while some places with a skyrocketing unemployment rate are expected to have a skyrocketing GDP? Does the market really know how to write the words "seek truth from facts"?

In addition, Japan’s CPI exceeded expectations, and Australia’s CPI exceeded expectations. These developed countries should be connected, and everyone’s situation should be similar. So I have reservations that the US CPI will be lower than expected tonight. I'd rather try a long dollar than an empty dollar.

Although I have no proof, there is definitely a repatriation of euro capital. European stocks have risen by 7% since the beginning of the year, while U.S. stocks have only risen by 2%... I think this is the main reason why the euro is so strong, and all CPIs have to be slightly behind.