The Point for Australia/NZ

Research evidence excerpt

The Point for Australia/NZ

Global Economic Outlook & Strategy - Renewed Uncertainties—But Continued

Resilience

The global economy has absorbed a significant shock with the higher oil prices

that have followed the Iran conflict and the closure of the Strait of Hormuz. While

the resulting pressures and uncertainties have taken a bite out of performance, the

pain to date has remained manageable and the global economy has shown

continued resilience. Notably, our forecast for global growth this year continues to

run near 2½%, which is down only a couple of tenths from when the year began.

This observation leaves us correspondingly more sanguine about the prospects for

the remainder of the year, even if pressures in oil markets linger. The reality is that

the global economy is less dependent on oil than in previous decades. In addition,

only part of last year’s sizable accumulation of petroleum inventories has been

reversed, and global inventory levels generally remain ample.

Nathan Sheets | Johanna Chua | Arnaud Marès | Ernesto Revilla | Gina Schoeman

Global Asset Allocation - House Views July 2026 – From Penalty Kicks to Macro

Risks

Since our last asset allocation, the Middle East conflict has escalated again, with

oil recovering much of the June losses. Rates have taken their cues from oil, while

equities and FX have remained more stable so far. We remain overweight equities,

as we still expect an eventual conflict resolution. But the size is reduced, as we

took profit on our Emerging Asia long in early July. We remain long the US, being

less sensitive to oil, but note that our “Generals” indicator is not far from

triggering, which would be equity negative. In duration, we stay neutral,

underweight the US, now against Bunds (replacing Gilts), given that US duration is