Market Update 08/2026 | A Quiet August? Not for Investors
A Quiet August? Not for Investors — Bonds Upgraded as Supply Scarcity Reshapes Returns
In August 2026, T&T International maintains an Attractive stance on equities across the US, Europe, Asia ex-Japan, Japan, Singapore, Australia, China, India, Germany and Emerging Markets, as indices hover near all-time highs and markets look past the Middle East conflict to refocus on strong underlying fundamentals. The macro backdrop stays constructive — resilient consumption, robust access to capital, supportive fiscal policies and a recovering manufacturing sector — and we anticipate 20%-plus EPS growth for the MSCI AC World Index this year, with performance broadening well beyond technology.
We upgrade the overall bond asset class and High Yield to Attractive, joining High Grade, Investment Grade and Emerging Market bonds. Cheap valuations and elevated yields drive the upgrade: markets priced in renewed rate hikes after the energy spike, but with energy prices and inflation expectations since falling, we doubt central banks will deliver them all — leaving room for capital gains, with most value at the front and belly of the curve. Broad commodities, copper and active commodity strategies remain Attractive. In FX, the NOK joins SEK, NZD, AUD, GBP and CNY as Attractive, while the EUR stays Neutral with EUR/USD expected to hold a 1.14–1.20 range.
The Topic of the Month — A Quiet August? Not for Investors — argues the summer lull is unlikely to materialise. The fastest AI investment buildout in history is unfolding in a world shaped by supply scarcity, where energy constraints, tight labour markets and geopolitical fragmentation shift the focus from efficiency to resilience, while governments and hyperscalers draw on the same pool of savings. The result is a global repricing of long-term yields — the US 10-year near 5%, German yields at a 15-year high and Japanese yields approaching 3% for the first time since the mid-1990s. For investors, the role of government bonds has shifted: less ballast, more income.
