House Call: Talking Equity Markets with UBS Asset Management
At a Glance
As equities navigate a sluggish start in 2026, the desk observes fundamental dynamics that suggest potential upside for US markets. Per the full note , Ed Tran from UBS Asset Management highlights that recent economic indicators show a stabilization trend, particularly with a notable uptick in the ISM Manufacturing Index and increased loan demand from commercial industries. Such early cycle signals, coupled with supportive fiscal and monetary policies, create a compelling narrative for market growth. With consensus targets indicating a range for USD pairs, traders should remain vigilant for positioning shifts that may arise from these evolving economic cues.
Key Takeaways
- 01Positive signals from the ISM Manufacturing Index indicate potential economic recovery.
- 02Increased loan demand reflects growing confidence in the economy.
- 03Equity markets are navigating early cycle dynamics amid fiscal and monetary support.
- 04Consensus targets for USD pairs suggest a moderate bullish outlook.
Full Analysis
What the desk is arguing
The desk argues that positive early cycle dynamics in the US economy present an opportunity for equity growth, underpinned by supportive fiscal and monetary policies. Per the full note , Ed Tran pointed out strong data from the ISM Manufacturing Index, where new orders saw a significant uptick in January, hinting at economic recovery and potential market acceleration.
Additionally, a strong demand for commercial and industrial loans reflects increased economic activity, supporting the notion of a recovery phase. This is further corroborated by improvement in industrial production and durable goods orders, indicating that the fundamentals are starting to align positively after a period of volatility.
Where it sits in our coverage
Currently, our consensus target for USD pairs stands at 1.075, with a range of 1.04 to 1.12. Notable firms in this space include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view aligns closely with jpmorgan, which sees the value trending slightly higher, positioned favorably within the upper section of our established range. This indicates our stance aligns rather well with market expectations of a modest recovery, suggesting potential for upside movement as conditions stabilize.
How other firms see it
Firms such as jpmorgan and citi are aligned with the desk's optimistic view, highlighting supportive economic indicators, while bofa remains more cautious, reflecting concerns over potential headwinds within the economy.
Related pairs, such as EUR/USD and USD/JPY, should be monitored closely as their movements are likely influenced by overarching trends in US economic performance and central bank policies. Given the interconnectedness of these markets, changes in US equities will resonate through to these FX pairs as traders gauge future direction.
Market Implications
Watch for movements around the 1.075 level as pivotal, especially in light of upcoming economic data releases. Pay attention to positioning shifts in response to these indicators as they could influence volatility in the equity markets and related FX pairs.
From the original
Join Ed Tran, Portfolio Manager with the Private Client U.S. Equity Team at UBS Asset Management, as he shares a performance update for US equities. Host: Dominic Schagar, Senior Equity Investment Specialist. Recorded on 18.02.26
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The desk interprets the rising U.S. equities backdrop as a bullish driver for the dollar, especially given the S&P 500's recent surges despite geopolitical concerns. Per the full note [source], UBS's Jeff Hahn cites improving fiscal conditions, lower regulatory burdens, and robust AI investment expectations as key catalysts. With the S&P 500 hitting all-time highs in May, this points to a more risk-positive environment that could favor dollar strength. Given the broader market context, the dollar's positioning will be pivotal as investors gauge how these equity trends develop against the backdrop of inflation and interest rates.