Risks and Relief

Financial markets have been pulled between opposing forces in recent days. Risk sentiment has been hit by concerns over US lenders, credit conditions, tariffs, the government shutdown, and a potential AI-driven valuation bubble (chart 1). Offsetting this, easing growth and inflation have strengthened expectations of further central bank rate cuts, lifting soft-landing hopes. In our charts this week we drill into:

 

• US equity market valuations
• Non-US equity markets and data surprises
• Oil prices and monetary policy
• China's credit growth
• US wage pressures
• UK inflation