This outlook provides a summary update of our economic and asset class views following the quarterly CIO Day. These views are supported by 2025 and 2026 forecasts for GDP growth and inflation, along with 12-month (September 2026) targets for key policy rates and fixed income, equities, commodities and FX markets.
We are sanguine on the economic outlook for late 2025 and early 2026. The current slowdown in the US economy is likely to be brief, supported by multiple reductions in interest rates and other policy initiatives. German growth will be boosted by recently adopted government investment programmes. Chinese growth could however slow slightly from current levels.
We maintain a positive view on equities with healthy earnings growth likely to support stock prices – although temporary setbacks are possible in coming months. In fixed income, any future falls in yields are likely to be modest and steeper yield curves are here to stay. In FX, the USD may experience some headwinds from repeated Fed rate cuts. Gold prices could rise slightly further from current levels on a 12-month horizon, but oil prices may fall with ample supply to meet demand.
