A new report by Amundi expects the US dollar’s depreciation to continue. While Schroders has turned negative on the dollar, remaining positive on gold. Like a number of wealth managers, Pictet Asset Management remains upbeat on US, emerging market equities.
Paris-headquartered asset manager Amundi has released its 2026
Capital Market Assumptions paper in which it expects the US
dollar’s depreciation to continue. However, the firm believes
that the erosion of the dollar”s central role in the global
financial system will happen gradually, especially since the US
is incentivised to and has the resources to defend the dollar’s
hegemony.
The report takes a look at the long-term forces shaping the
investment environment, the impact on public and private assets,
and implications for asset allocation.
Amundi believes that the most compelling long-term opportunities
are in undervalued currencies where domestic assets are becoming
more attractive, including selected G10 commodity currencies. “In
Asia, both the yen and the renminbi should appreciate gradually
over time: the yen still benefits from its cheap valuation and a
more normal rates backdrop, while the renminbi is supported by
valuation metrics and by China gaining incremental leverage in
regional and global trade and capital flows,” Amundi said.
This month, Patrick Brenner, chief investment officer,
multi-asset at London-headquartered investment manager Schroders
also downgraded his position on the dollar to negative.
After benefiting from the recent surge in energy prices
and speculative short US dollar positions unwinding amid the
risk-off conditions, he expects volatility to normalise
which will re-ignite a weaker dollar regime.
Like a number of investment managers, Brenner maintains a
positive view on gold as the structural outlook is robust due to
central bank reserve diversification, a declining appetite for
dollar assets, and sustained demand from China and official
buyers. Amundi also believes that gold is no longer just a
commodity; but it is becoming a structural hedge against
fragmentation and policy-driven risks. Chi Lo, senior market
strategist, Asia Pacific, at BNP
Paribas Asset Management has also said that central bank
purchasing will remain a long-term support for gold,
prompted by geopolitical tensions and an increase in the
incentive for de-dollarisation amid concerns about dollar
debasement. See more here.
US, emerging market equities
Brenner is optimistic about US equities, supported by strong
earnings revisions and anticipated rate cuts. With valuations
having been re-set, he maintains a positive outlook on US
technology, which remains driven by earnings.
Amundi believes that US equities should still deliver the
strongest Earnings Per Share (EPS) growth in developed markets at
around 7 per cent per annum. On a sector level, in the US it is
no longer only about software, models and digital adoption. It is
increasingly about physical AI, data centres, power demand,
semiconductor capacity, automation, robotics and industrial
capex.
Mark Haefele, chief investment officer at UBS
Global Wealth Management, also retains an attractive view on
US stocks and expects the S&P 500 to move higher by year-end,
supported by healthy profit growth and a still-supportive
monetary backdrop. Within US equities, Haefele continues to
favour consumer discretionary, financials, healthcare,
industrials, and utilities, while staying constructive on
AI-linked areas of the market.
Amundi believes that emerging markets (particularly India) stand
out as a source of opportunity thanks to stronger EPS growth.
Brenner continued to be constructive on emerging market equities
this month, particularly in Korea and Taiwan, where markets
benefit from technology exposure or attractive local rates.
Their stance is supported by Luca Paolini, chief strategist at
Pictet
Asset Management, who sees a positive outlook for emerging
market and US equities. “We have upgraded both emerging market
and US equities to overweight but we remain selective,” Paolini
said on Friday. “US stocks look especially attractive, supported
by robust earnings, ample liquidity and the ongoing industrial
and AI investment boom.”
“Companies in emerging markets are also benefiting from robust
earnings and seem to be relatively protected from the impending
energy shock. The developing world is well positioned to benefit
from the AI cycle, as it is home to some of the world’s largest
chipmakers, such as Taiwan’s TSMC and Korea’s Samsung and SK
Hynix – the trio that together make up nearly a quarter of
the MSCI EM equity benchmark,” Paolini continued.
He maintains an overweight stance on Chinese stocks. “Strong
monetary and fiscal stimulus should underpin domestic demand,
while rising industrial production and AI-related exports should
boost earnings in a market that has greater capacity than most to
absorb external shocks,” he said. “We are neutral across non-US
developed markets, where equity valuations remain fair but
significant uncertainty persists over the economic impact of the
war.”
At sector level, Paolini upgraded industrials to overweight.
Industrial stocks are supported by global infrastructure spending
and improving manufacturing trends. Capital expenditure in the US
is booming, with core capital goods orders up 11 per cent
year-on-year in March. He retains an overweight position in
technology stocks, but prefers hardware and semiconductor
companies to software firms. “While the valuation discount from
the recent sell-off may prove temporary for a broad group of tech
stocks, big tech companies’ investment plans for AI data centres
and digital infrastructure this year – estimated at $700
billion – warrant a premium,” he added.
He also maintains overweight positions in the Swiss franc and
Japanese yen. “Both provide reliable protection in a
stagflationary environment. The yen, in particular, stands out:
the prospect of a widening of Japan-US interest rate
differentials leave ample scope for a rebound.”
Patrick Kellenberger, emerging market equities strategist at
Swiss private bank Lombard Odier also
favours diversified and selective equity exposure with an
overweight in emerging markets where exposure to AI’s suppliers
is available at more attractive valuations. “We remain positive
on emerging markets because they offer a compelling combination
of faster earnings growth, a valuation cushion, and direct
exposure to the same AI capex cycle that is driving US leadership
– but at a more reasonable price,” he said on Friday. “The AI
infrastructure cycle is increasingly dominant, with 80 per cent
of the growth concentrated in semiconductor exporters,
particularly from South Korea, and to a lesser extent Taiwan,
where supply bottlenecks support pricing power.” See more
here about US, emerging market equities.