While the idea of US growth re-acceleration is driving dollar strength, it's not the only story. Recent positive surprises in European PMI data and upgraded Chinese GDP forecasts suggest broader global growth resilience. This breadth should help cap the US dollar's rally and may promote weakness against other currencies.

For commodities to benefit from reflation, rising inflation alone is not sufficient. It must be accompanied by a genuine economic and industrial rebound, indicated by rising Purchasing Managers' Indexes (PMIs). This combination dramatically improves commodity returns, especially for energy and industrial metals.

A powerful market signal is the "quad count," or the forecasted sequence of economic regimes. A progression from Quad 4 (recession fears) to Quad 3 and then to Quads 2 and 1 creates a powerful contrarian setup. This allows investors to buy assets like small caps when recession probabilities are priced at their highest.

Emerging vs. developed market outperformance typically runs in 7-10 year cycles. The current 14-year cycle of EM underperformance is historically long, suggesting markets are approaching a key inflection point driven by a weakening dollar, cheaper currencies, and accelerating earnings growth off a low base.

The link between emerging market currencies (EMFX) and US tech stocks is not about the tech sector itself. Global equity markets have become a unified signal for the global economic cycle. A sell-off worries investors about global growth, impacting risk-on EM currencies regardless of their direct tech exposure.

Stronger US growth isn't hurting EM currencies because growth is also being revised up globally in places like China and Europe. This prevents a repeat of the 'US exceptionalism' theme that typically strengthens the dollar and pressures EM assets, making the current environment less problematic for EMFX.

Asset allocation should be based on liquidity cycles, not economic cycles like GDP growth, as they are out of sync. An increase in liquidity precedes economic acceleration by 12-15 months. Strong economic data can even be a negative signal for asset markets as it means money is leaving financials for the real economy.

An index of non-traded industrial commodities like glass and tin provides a clearer view of true economic activity. Because these materials are not easily traded by financial investors, their price movements are less likely to be influenced by speculative activity and more directly reflect genuine industrial demand, making them a purer leading indicator.

The convergence of positive global growth indicators raises a crucial question for monetary policy. If the economic backdrop is genuinely strengthening, as these diverse signals suggest, it undermines the justification for central banks to implement further rate cuts. This creates a potential divergence between improving economic reality and market expectations for easing.