Back to school: from summer clarity to autumn’s changing winds
- Global growth resilience faces tariff tests
- Lessons from the summer: earnings clarity and shifting yield curve
Geopolitics
Multipolar world in action
Geopolitical multipolarity is set to persist, with heightened risks of miscalculation, shifting alliances, and military build-ups driving uncertainty and security risks.
The US is using tariffs to pursue foreign policy goals, but it remains constrained. It is also waking up to its dependence on China’s rare earths, while Russia, broadly self-reliant, has ignored Trump’s demands to end the war. These dynamics highlight the limits of US leverage in a multipolar world.
Global Investment Views
A summer of calm on surface, turbulent currents beneath
US equities touched new highs in August and European markets traded close to their March levels, while corporate credit spreads compressed over the summer. Sentiment was led by expectations for AI capital expenditure, a strong US earnings season, and a relatively dovish Fed at Jackson Hole. Markets seems to be ignoring the risks around economic activity (e.g., labour markets), political pressure on the Fed, fiscal deficits, and corporate margins.
Summary
Back to school: from summer clarity to autumn’s changing winds
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