Reality or fiction? The answer lies in the data

This reading is confirmed by a brief review of the first month of the year, which has seen the beginning of a transition process in Venezuela, the signing of a deal between the EU and Mercosur and a Free Trade Agreement with India, tensions on both sides of the Atlantic over the sovereignty of Greenland and a new episode of tension between the US and Iran. As Mark Carney reminded us in Davos, the world is experiencing a disruptive process that bears all the hallmarks of a rupture, rather than an orderly transition, and where the choice is between being either «at the table» or «on the menu» and nostalgia for past times is not a strategy. Thus, in this turbulent environment in which we find ourselves, it is increasingly difficult to separate reality from fiction, and it seems that published economic data lose value as they are a snapshot of an economic context that may have changed within a matter of weeks.

However, in recent years, the data have consistently indicated the resilience of the global economy to various kinds of shocks. Indeed, this is the trend that emerges from the information published to date for the 2025 year-end, which shows a global economy growing at rates close to potential, inflation nearing central banks’ targets after the post-pandemic tensions and, notably, a rise in productivity in the US that is offsetting the atypical balance of the labour market (few hirings or redundancies). Therefore, whilst the effects of the two opposing forces that will shape the new future economic reality – fragmentation/geopolitics versus artificial intelligence – continue to manifest themselves, the positive momentum of the landing process continues apace.

Meanwhile, just as sinologists attempt to decipher what lies behind any minor change in China’s political-military hierarchy («reading tea leaves», as it is known), macroeconomic analysts seek to select indicators that might predict changes in the tense calm that characterises the economic and financial landscape. And, while some of them, such as inflation expectations, do not reflect any future tensions in the balance of global supply and demand, geopolitical uncertainty is beginning to generate risk aversion, which is particularly affecting the commodity and currency markets. In this context, the possibility of a recurrence of «Truss moments» – where a sudden loss of fiscal credibility triggers a disorderly market reaction with significant effects on the currency and the long end of the sovereign debt curve – cannot be ruled out. The latest example of such an episode occurred in Japan, where the prime minister’s decision to call a snap election and announce a fiscal expansion plan rekindled investors’ concerns over budgetary balance, pushing long-term sovereign interest rates to all-time highs (the interest rate on 40-year debt exceeded 4% for the first time). This movement was accompanied by a sharp depreciation of the yen, fuelling rumours of a possible joint intervention by the Japanese Ministry of Finance and the US Treasury in the currency market.

All this is happening precisely at a time when the relationship between commodity markets, currencies, and geopolitical tensions has become a fundamental component of the new global economic order’s central architecture, with the dollar as the protagonist and central barometer of all these new dynamics. Questions surrounding the new US administration’s intentions for the greenback have led to structural changes in global investment portfolios over the past year, with precious metals acquiring a more prominent role as safe-haven assets. In this context, the sensitivity of gold and silver prices to changes in the dollar’s exchange rate has been steadily increasing, as demonstrated by the sharp correction on 30 January (–10% for gold and –30% for silver), when the announcement of the official candidate for the Fed presidency (Kevin Warsh, the most orthodox of the nominees) led to a strong appreciation of the US currency. When looking for signals, it is on the dollar – as the link between commodities, geopolitical risk and uncertainty levels – that we will need to focus our attention in the coming months.