The Week in Markets: Rest of the world outperforming the US so far this year

Inputs from US inflation indices released last week infer a January core Personal Consumption Expenditure reading of 0.27% month on month, lower than the 0.3% the consensus expects. January retail sales fell 0.9%, the largest decline since March 2023. Together, these data should reverse talk that rates would have to go up again this year. US President Donald Trump is now talking about reciprocal tariffs, which would be much less punitive than the 25% on Canada and Mexico he had been talking about before. US and Russian officials say they will start talks on ending the war in Ukraine in coming days. Reuters reports that Chinese President Xi Jinping will chair a symposium to boost private sector sentiment this week that will be attended by the big technology company founders/CEOs.