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The findings, based on Permutable's Trading Co-Pilot and Regional Macro Indices, shows that what might appear as disconnected headlines - dovish monetary policy in the US, protests and political strains across Europe, and accelerating flows into gold - are in fact quantifiable sentiment signals.

Overview:

• United States: The Fed's 25 bp cut to 4.00-4.25%, its first since 2024, reignited risk appetite. The US dollar index fell to a three-year low (96.25), equities hit record highs, and two-year Treasury yields slipped below 4.1%. Permutable's models detected the dovish sentiment build-up weeks before the meeting, confirming a structural shift into a risk-on regime.

• Europe: Despite fundamentals showing only modest deterioration, political shocks - from wealth tax proposals in France to protests in Germany, Italy and the UK - have entrenched a bearish sentiment regime. Permutable's Political Tension Indices highlighted persistent fragility, with France emerging as the epicentre of volatility.

• Gold: The standout performer, climbing to $3,780/oz (+12% month-to-date, +41% YTD). Permutable's cross-regional sentiment analysis confirmed gold's role as the universal hedge, with consistently positive signals across the US, Europe and emerging markets.

Jack Watson, Analyst, Permutable, added: "The data is clear: sentiment fractures precede market moves. By monitoring these divergences in real time, we see relative-value trades emerge long before traditional data catches up."

Implications for global macro strategy

• US: Risk-on leadership, anchored by dovish policy and resilient corporate earnings.
• Europe: Relative weakness, with only tactical rallies likely; structural fragility persists.
• Gold: Strength as a cross-regional hedge; demand supported by both dollar weakness and European political instability.

• Trading Co-Pilot processed 120,000+ multilingual news sources and market commentaries in real time, flagging the dovish US monetary narrative before the Fed cut.
• Regional Macro Indices tracked cross-country divergences, confirming positive US divergence against entrenched European political drag.
• Political Tension Indices identified persistent volatility clusters in France, Germany, and Italy, validating the bearish skew.

Press release

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