Asia outlook in the Year of the Horse - 2026 Markets

The Year of the (Fire) Horse is associated with speed and energy - tempered by restlessness. In this short video, Sameer Goel, Global Head of Emerging Markets & Asia Pacific Research at Deutsche Bank, discusses how that metaphor maps onto markets in 2026: powerful runs punctuated by quick pivots, and why Asia may be positioned to benefit as the global backdrop evolves.

Full transcript of the video:

“The key traits of a horse are speed and energy but combined with restlessness.

For markets, that means sprint ahead but then pivot fast.

In fact, that’s our 2026 outlook in one image - bursts of momentum punctuated by course corrections.

We foresee stretches where markets run hard on the back of steady global growth, with outperformance in the US and Germany; strong policy support, especially fiscal; fading effects from tariffs; and big spending on AI.

And then there will be moments where they switch direction suddenly as policies or headlines change.

Three things to note in particular:

1. Monetary policy is getting close to a turning point, the Fed is nearing the end of rate cuts while the ECB is likely to hold rates, which means a more neutral dollar outlook.

2. Asia should benefit from risk positive global trends, but it’s the local factors like policy, tech investment, and capital flows that will drive performance and differentiation.

3. China’s growth will likely slow down but also rebalance as "anti-involution" policies focus on corporate profitability.

The global backdrop should be supportive for the region, though the best returns in Asia are likely where tech demand is strongest. Think economies tied to chips and data centres.

The field of play is getting wider. More use of local funding in Asia, more access to local markets, more onshoring of FX transactions, all that means money can move in new ways.

Asia is continuing to open-up, attracting more global investment as markets gain inclusion in major indices.

The increasing adoption of local currencies is helping to drive steady inflows. The ongoing expansion of AI is providing solid support for technology exporters.

Many Asian currencies are still undervalued, therefore the potential to reprise against the dollar if outflows ease and confidence improves.

Be careful though. Sudden policy changes, such as shifts in tariffs can swiftly alter market sentiment.

Geopolitical developments may catch investors off guard; some segments of the AI sector could lose steam temporarily.

Asia is a major importer of oil. Even though oil supplies currently seem stable, unexpected disruptions could still have a significant impact.

In a nutshell – how to invest in 2026? Ride the momentum, stay agile, and be prepared to pivot when needed.”

This material is for information purposes only and does not constitute investment advice or a recommendation to transact in any security or strategy. Market views are subject to change.