The GIV elaborates on the latest views, convictions and outlook of our Global CIOs, Investment Platforms and the Amundi Investment Institute.
Central banks easing into a thus-far resilient economy
The year gone by has been exceptional in some respects. Global equities touched new highs, and emerging market stocks reached close to their 2021 levels. All this happened despite the US administration’s somewhat unconventional policies, particularly on the trade front, leading to a phenomenal performance of safe-haven gold.
Neutral duration with regional divergences
While the global economy has been reasonably resilient, there are some minor nuances across the main regions. For instance, in the EZ, wage inflation is low, and overall disinflation looks on track. Our expectations of ECB rate cuts in 2026 remain, despite recent hawkish comments from some board members. In Japan, a key question for us is at what yield-level Japanese debt becomes sufficiently attractive, and how much further fiscal easing is likely from the government.
Diversify with small and mid cap in Europe
The global economy has played out reasonably well, and that’s being reflected in market performance amid ample liquidity. What’s not reflected in the markets is policy uncertainty, signs of consumption slowing down, and risks of high valuations. In this environment, our focus remains on fundamentals and staying tilted towards businesses where risk-reward is well balanced. Increasingly, we find such businesses in regions outside the US.
Risk-on: recalibrate, but not retreat
We are seeing mixed macro signals in the US. Job markets are deteriorating, but the pace (of deterioration) is stabilising, the Fed is easing and is conscious of maintaining liquidity, and fiscal policy is supportive. In Europe, consumption is subdued, but inflation is declining. These factors, combined with strong liquidity and benign credit conditions in the markets, somewhat offset (but not completely eliminate) the risks posed by high valuations. Hence, we made some adjustments to our views on risk assets, without changing our medium- term stance. In addition, we maintain that safeguards in the form of gold and hedges on DM equities are essential amid high valuations.
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