Eren Osman

We expect markets to be driven by three main dynamics: the Fed's policy stance, the trajectory of the labour market, and the evolving impact of tariffs. The recent cooling in job growth and wage pressures suggests a gradual rebalancing in the labour market. This supports the growing narrative of a soft landing — where inflation moderates without triggering a sharp rise in unemployment. Such a scenario would give the Fed greater flexibility to begin easing rates. We see inflation on a downward path, while tariffs may introduce temporary upward pressure on prices, their impact is likely to be contained. Beyond the US, the global growth outlook has shown signs of improvement. Manufacturing PMIs across Europe and Asia have strengthened, pointing to a potential rebound in industrial activity. This recovery could provide an additional tailwind to risk assets, especially if it coincides with central banks lowering interest rates.

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