bank reserves, mainly at the expense of the USD Source: IMF, World Gold Council, Standard Chartered Our positive view on gold is panning out as expected, albeit in is supported by fundamentals or is a bubble. We view the fundamentals - a view reinforced over the past two months. growth this year, with consensus expectations for 14.6% unchanged, with recent data showing continued demand for the metal. Gold also continues to rise as a share of global growth, led by the technology sector with 32.3% growth. While central bank reserves, though, at the moment, there is little to suggest central banks are aiming for a specific level. We closely, we continue to believe earnings growth is providing the fundamental support for continued equity market gains. will warrant closer attention later in the year. A pure chart- Having said that, we do believe there is value in avoiding backdrop of this bubble debate. We remain Overweight US In this context, recent volatility was likely a result of animal However, we also favour the healthcare and utilities sectors. positioning led to a correction back to trend. Despite these defence sector on solid air traffic growth and geopolitical risks. dramatic moves, little has arguably changed from a long-term Regionally, we remain Overweight AxJ. AxJ has outperformed the US since we published our 2026 Outlook, with USD weakness helping unlock outperformance as expected. This Against the relative excitement in equities and commodities, excessive concentration in the US technology sector. the year. While there has been considerable debate over the Within AxJ, we remain Overweight Indian equities. Indian direction of Fed policy under new Fed Chair nominee Warsh, equities continued to lag AxJ in the early weeks of 2026. US bond yields have been rangebound, offering attractive However, improving earnings expectations, the completion of opportunities to earn a yield, but little more. More significant a US-lndia trade deal, cuts in tariffs to levels competitive with Asian peers and growth-supportive policy measures, such as the recent budget, suggest risk/reward remains attractive. We maturity bond yields higher. However, we see low risk of a spillover to other major bond markets for now. Instead, we region as offering an opportunity to add Overweight exposure. We are also Overweight Chinese equities within Asia. The rates and unchanged policy rates elsewhere. growth and policy backdrop remains a mixed bag, with some Within bonds, we continue to favour EM bonds, which benefit measures. Ultimately, we expect the market to outperform as local currency). We also expect some pressure on US IG bond prices as hyperscaler bond issuance supply starts to rise. favours cyclical, growth-style equity markets.
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