Europe’s Fiscal Uncertainty Meets America’s Data-Driven Debate

In this week’s Long and Short of the Week Ahead, Matt Jones is joined by Senior Portfolio Manager Neil Staines to explore the macro themes shaping markets.

Key discussion points:

• Fiscal politics in focus: France heads toward a confidence vote after parliament rejects a prudent budget, while the UK faces rising fiscal uncertainty with tax hikes looking more likely than spending cuts. Both countries felt the pressure of bond vigilantes, with curve steepening rippling into global markets.
• ECB policy backdrop: European inflation is back at target, and growth has stabilised, but divergence between the periphery and the German core complicates the outlook. With policy at neutral, the ECB is likely to hold steady, though tariff risks and council divisions remain key watchpoints.
• US growth and jobs: A pivotal payrolls report and upcoming CPI print will set the tone for the Fed. Growth remains below equilibrium but resilient, with labor market moderation offset by AI-related CapEx. The debate over cuts toward the 3% neutral rate continues.

Plus: Neil shares his weekend picks — from cricket and football internationals to the US Open Tennis Finals and the Italian Grand Prix in Monza.

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