Investment Monthly

Macro Outlook

• The US is expanding at a solid pace, but growth is unbalanced. AI-related capex is providing strong support, but a cooling labour market and tariff-driven price rises are a headwind to consumers
• We expect US growth to converge towards rates seen in other developed economies. Tariffs pose upside risks to inflation
• In China, we expect resilient but uneven growth, as supportive macro policies and export/manufacturing competitiveness offset tariff headwinds
• We think premium growth opportunities lie in emerging and frontier markets, with economic power shifting to Asia and the Global South

Policy Outlook

• The US Fed is divided over the rate outlook, reflecting differing views on the medium-term trajectory for inflation and the labour market
• After eight rate cuts, eurozone inflation is close to target and policy is in neutral territory, with the ECB taking a “watch-and-wait” stance
• EM Asia has increased fiscal and industrial support to offset trade headwinds, as the region enters the late stages of its monetary easing cycle
• China will rely on incremental and targeted policy to support economic and financial stability. Policy efforts will focus on strategic objectives such as technology innovation and self-reliance, and economic rebalancing