Global Outlook 2026 – An uneasy calm

What the desk is arguing

The desk posits that the global economic landscape will be influenced by new growth drivers, including technological advancements and demographic shifts, which may lead to an 'uneasy calm' in markets as they adjust. Per the full note source, these dynamics could result in both opportunities and risks for traders, particularly in the foreign exchange space.

Key evidence supporting this view includes projections of moderate GDP growth in both developed and emerging markets, which Standard Chartered estimates will hover around 3% annually through 2026. This growth, however, is tempered by potential geopolitical disruptions and inflationary pressures that could impact central bank policies.

Where it sits in our coverage

Our consensus target for the EUR/USD pair is 1.075, with a range from 1.04 to 1.12. Specific targets from other firms include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)

This view aligns with jpmorgan, which is positioned at the higher end of the range, while bofa represents a more cautious stance at the lower bound, indicating a divergence in outlook among major players.

How other firms see it

Aligned firms like jpmorgan and citi share a bullish outlook on the EUR/USD, anticipating a gradual recovery supported by easing inflation. Conversely, bofa and hsbc maintain a bearish perspective, citing persistent inflation risks and potential central bank tightening as key concerns.

Watch the EUR/USD closely as it reflects broader trends influenced by the ECB's monetary policy and the Fed's interest rate decisions, particularly as they relate to inflation indicators and employment data.

What the calendar says

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