Turning a corner?

Macroeconomic update for July 2026

The preliminary US-Iran agreement, while still fragile, removes a major geopolitical overhang. Although inflation is still elevated and has prompted central banks to adopt a more hawkish stance, we believe much of the recent increase has been due to temporary energy-related factors, not broader inflationary pressures. As oil prices come down and supply conditions improve, we expect inflation to gradually ease. Equity markets have also fully recovered their conflict-driven losses, buoyed by stable economic fundamentals, strong corporate earnings, and ongoing investment in artificial intelligence. In the latest CIO Monthly video, the Multi Asset Boutique’s Mario Montagnani walks us through these developments and explains what they mean for our outlook and asset allocation. 

  Key Takeaways  

1. What about inflation?
   The conflict in the Middle East has pushed inflation higher. However, we are not overly concerned about a sustained spike as the most recent pressure stemmed from non-cyclical components.
   
   
2. How are central banks responding?
   Central banks, such as the US Federal Reserve, have adopted a more hawkish tone amid inflationary pressures, though this has likely been priced in by markets. 
   
   
3. How are we positioned?
   The Multi Asset Boutique reiterates its overweight positioning in equities, with a preference for emerging-market stocks. It maintains an underweight stance on bonds and stays neutral on commodities and gold. 
   
   

Even the smallest undertaking starts with a conversation