Allianz Global Investors believes the global economy is entering the final quarter of 2026 with renewed momentum. Inflation remains stubborn and central banks are keeping policy tight, but the asset manager still sees a supportive backdrop for investors who stay selective and well diversified.
 Jenny Zeng |
Inflation remains the main challenge
For policymakers, inflation is still the central issue. Price pressures have eased from their peak, but energy-driven inflation and RESILIENT demand lead AllianzGI to expect inflation to stay above Target in most developed markets. Labour markets are cooling gradually but remain broadly healthy, which continues to support consumer spending. Investors should also keep an eye on geopolitical tensions, energy market volatility, questions over central bank independence and the approaching US midterm elections.
Against this backdrop, AllianzGI expects the major central banks to maintain a restrictive stance. Following the September rate hikes, the asset manager anticipates a further 25 basis point increase from both the Federal Reserve and the European Central Bank before year-end. The Bank of Japan is expected to continue its gradual normalisation, while the Bank of England is likely to leave rates unchanged.
Equities: AI opportunities extend beyond chips
According to Michael Heldmann, CIO Equity, the AI investment theme is broadening. "Opportunities now extend beyond semiconductors to the wider infrastructure that supports their deployment, with growing demand for optical interconnects, advanced materials and power systems. Electrification continues to Benefit from the expansion of data centres and infrastructure spending." In Asia, he sees opportunities among hardware suppliers, in China's AI ecosystem and in India's consumption-led growth. Japan continues to Benefit from pro-growth policies and corporate governance reforms. Beyond AI, Heldmann highlights value stocks as a source of diversification: "They combine attractive valuations with distinct sector exposures and can act as a counterweight to crowded growth and momentum strategies."
Fixed income: steeper curves and carry
Jenny Zeng, CIO Fixed Income, sees opportunities across the bond Spectrum . She expects yield curves to steepen in the United States, Germany and Australia, with US Treasuries offering attractive real yields. Among government bonds, she favours short-dated German Bunds and long-dated UK Gilts. In emerging markets, AllianzGI prefers debt from oil-exporting countries as well as selected Brazilian and Hungarian local bonds. "In credit, carry remains the main driver of returns," says Zeng. "That supports a preference for financials, consumer Staples and selected AI-related issuers." In currencies, she favours pro-cyclical and high-yielding currencies, against a broadly neutral outlook for the US dollar.
Multi asset: overweight equities, positive on gold
Greg Hirt, CIO Multi Asset, is maintaining an overweight position in equities. "We have a clear preference for emerging markets, followed by Japan, the US and Europe. This positioning is supported by robust earnings growth, upward revisions and continued AI-related investment." He sees attractive thematic opportunities in robotics, biotechnology and gold miners. Hirt remains cautious on developed market government bonds, although he favours European sovereign debt. He also sees value in emerging market bonds, particularly those of energy-exporting countries, and in investment grade credit. Neutral on currencies in the short term, he expects the US dollar to weaken over the longer term. He remains positive on gold and commodities, as investors seek diversification amid fiscal concerns, supply constraints and tight energy markets.
