Shifting Forces: Dollar Weakness, China’s Self-Reliance, and Evolving Return Dynamics

The July 2025 CIO outlook from AXA Investment Managers explores major macro developments—including USD depreciation, China’s strategic pivot, and asset pricing revisions—and how these forces are shaping medium-term asset class views.

• The U.S. dollar has weakened despite higher rate differentials, as structural deficits, foreign capital rotation, and EU fiscal momentum weigh on demand.

• China’s policy focus on self-reliance is reshaping investment flows, with AI, green energy, and health sectors positioned as long-term domestic growth drivers.

• Bond-credit arbitrage remains in flux, with current preferences leaning toward corporate risk, but yield curve dynamics could shift that balance.

To understand how these transitions may recalibrate portfolios, explore the full outlook from AXA’s global CIO team.