Global Liquidity has peaked and is now turning lower, pushing markets into a late-cycle phase where volatility is likely to rise, policy must tighten and asset allocation should become more defensive. China is the key exception, with PBoC reflation supporting gold prices and potentially Chinese assets, while fiscal strain and Treasury-led monetisation across the Advanced economies point to higher bond yields, faster money growth, and renewed inflation risks.
Our outlook rests on a powerful macro backdrop: economies remain resilient, supported by large-scale fiscal spending, the AI capex boom, and rising investment and inventory demand linked to de-globalisation. Against this setting, investors should reduce credit and long-duration bond exposure, favour monetary inflation hedges such as gold, and maintain commodity exposure, with oil offering a particularly compelling upside case.
