Amundi: Global Investment Views – November 2026
Recent weeks have seen a reassessment of risks across energy markets, fiscal space, artificial intelligence-related (AI) stocks and emerging markets. Investors are increasingly favouring businesses with strong balance sheets, pricing power and exposure to structural supply constraints.
In energy markets, the geopolitical premium appears more apparent, reflecting tighter and more expensive supply routes, rather than a temporary disruption. Although energy prices have retraced, this premium is likely to stay for some time.
In equities, we are witnessing a rotation out of AI-related stocks. Markets are scrutinising the earnings potential and cash flows from the massive capital expenditure on AI. Government bond yields initially rose to levels not seen in years, but Treasuries eventually regained their safe-haven appeal. Core European bonds also benefited from a flight to quality.
The second round of energy shock and inflation risk
Oil markets have shifted materially, with rerouting implying that effective supply is currently around 80% of pre-Iran-war levels. We expect prices to remain elevated through year-end before gradually easing over H1 2027, as transport conditions normalise.
Gas markets face tighter constraints, as rerouting options are more limited. The inflation pass-through is becoming increasingly evident, and this second wave of energy price increases could prove more persistent. The key risk to monitor is second-round effects via wages and services inflation.
Higher-for-longer rates
This remains the dominant narrative across yield curves. The short end continues to reflect central bank policy tightening, or signals of further action. As inflation is expected to remain above target across most developed countries, the Fed will likely hike once in December and possibly again in early 2027, before staying on hold for the rest of 2027. We also expect the ECB to raise rates once in December and again in early 2027. The long end of the curve in most developed countries is likely to remain under pressure from fiscal deficit concerns.
Fiscal policy in Euro Area
Europe’s fiscal framework is facing its toughest test since the post-pandemic overhaul of the Stability and Growth Pact. Policymakers face an increasingly difficult trade-off between public backlash and the need for fiscal consolidation, creating an incentive to delay the latter.
The broader risk is credibility erosion, with widening European sovereign spreads suggesting that investors are scrutinising debt trajectories more closely. Looking ahead, the key question is whether the institutional framework can hold under the combined pressure of monetary tightening and fiscal strain.
AI trade dispersion amid higher rates and power bottlenecks
AI-related investments are becoming increasingly differentiated. Investors are becoming more cautious about higher interest rates, power constraints and the lack of near-term returns from large capital outlays. Weak IPO performance, project delays and rising credit default swap costs for AI-linked companies all point to cooling sentiment.
Emerging market fragmentation
We believe the developing world is becoming increasingly fragmented, with a split between commodity exporters and importers. Some idiosyncratic risks are also emerging and we continue to monitor events in Brazil and Indonesia.
Portfolio construction guidelines
In a supply-driven environment, where supply constraints matter more than demand, investors should focus on scarce assets. Many commodities markets are likely to remain structurally undersupplied. In equities, this includes scarce resources such as rare earths, as well as sectors linked to supply constraints, such as AI infrastructure, defence, aerospace and energy. In bonds, preference should be given to countries with low debt-to-GDP ratios, given the risk of oversupply in more indebted economies.
In fixed income, we have marginally raised our constructive stance on Eurozone duration, favouring peripherals over core and retaining a steepening bias. We are also positive on the UK. However, in the US and Japan, we remain close to neutral. EM bonds remain attractive, and we are increasingly selective, favouring countries with strong external finances. In credit, we prefer global and EU IG as well as higher-quality yield opportunities.
In equities, we maintain a balanced approach, combining defensive sectors with quality cyclical stocks and a focus on balance sheet strength. We remain positive on Europe and Japan over the long term, and constructive on EM, where earnings remain supportive, despite widening divergence.
From a multi-asset perspective, we see rotation opportunities emerging in favour of the US and Japan. At the lower-risk end of the spectrum, we are positive on US and European duration, as well as euro investment-grade credit. Secondly, in EM, we have become more constructive on both local-currency and hard-currency EM debt.
Overall, we maintain a mildly risk-on stance, with an emphasis on diversification and selectivity amid volatility, while paying close attention to portfolio construction.