DAX divergence from US tech – how long can it last?
Been watching the DAX with some skepticism lately. You see the FTSE is flat, and the DAX, despite some underlying strength in core European industrials, just feels… inflated. While US tech continues its run, the DAX is pushing up against a backdrop of pretty grim macro news out of Europe – persistent inflation, energy concerns, and the ECB still sounding hawkish. It feels like the market is betting heavily on a soft landing that might not materialize here, or perhaps it's just following US sentiment without much conviction of its own. I'm looking at how $USDMXN is reacting to global shifts and it's interesting to compare it to how $DAX is clinging on. Anyone else seeing this as a potential setup for a notable correction in European equities, or am I missing some critical upside catalyst? Tell me where I'm wrong, I'm here to learn.
It's not just the macro; Germany's industrial base has its own structural problems. Relying on China for exports and cheap Russian gas isn't a sustainable model. That divergence will catch up eventually.