In this week’s Global Macro update, we highlight a surprising shift in Europe: Italy’s government bonds and stock market are now outperforming France’s. Political instability in Paris has pushed French bond yields higher, narrowing the gap with Italy, long considered the weaker credit. As a result, Italian and Spanish equities are powering ahead while France struggles.

Across the Atlantic, US markets continue to defy higher borrowing costs. Margin debt has topped $1 trillion, IPO activity is heating up, and investors are rotating into emerging market debt and even crypto, with Ethereum breaking above $4,000.

The message is clear: risk appetite is back. But with valuations stretched, holding cash and using stop-losses remains key for disciplined investors.