Global Outlook 2025 Podcast - Reverberations

What the desk is arguing

The desk posits that the US presidential transition will have profound implications for global economic growth, the USD, and EM assets. Per the full note from Standard Chartered, the anticipated tariffs on China and other key partners could lead to a recalibration of trade relationships, impacting currency flows and investor confidence.

Supporting this view, Standard Chartered's analysis suggests that the transition could exacerbate existing tensions, potentially leading to a stronger USD as investors seek safe-haven assets. The desk notes that any shifts in trade policy could influence capital flows into EM markets, which have been sensitive to US monetary policy changes.

Where it sits in our coverage

Our consensus target for the EUR/USD stands at 1.075, with a range of 1.04 to 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26) - citi: 1.12 (Mar26)

This view aligns with jpmorgan, which shares a similar outlook, while bofa presents a more cautious stance at the lower end of the spectrum. The desk's target is positioned towards the upper bound of the consensus range, indicating a belief in a stronger EUR against the USD as the political landscape evolves.

How other firms see it

Firms like jpmorgan and citi are aligned with the desk's perspective, anticipating a stronger USD amidst geopolitical shifts. Conversely, bofa holds a contrary view, expecting a weaker EUR/USD trajectory.

Key currency pairs to monitor include USD/JPY, which may react to shifts in US monetary policy, and AUD/USD, sensitive to trade dynamics with China. These pairs could provide insight into broader market sentiment as the political landscape changes.

What the calendar says

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