Supported by resilient growth, easing inflation pressures, and expected US rate cuts, 2026 promises increased opportunities outside the US, particularly for Australian investors amid favourable currency and commodity trends.
Global economic conditions look set to remain broadly supportive for risk assets in the first half of 2026, driven by resilient activity, easing price pressures in many advanced economies and an expected loosening of US monetary policy. That combination should favour markets outside the United States and lift commodity-linked assets, while also reshaping foreign-exchange dynamics that will matter for investors in Australia.
Policy and growth expectations are central to the outlook. The Reserve Bank of Australia’s February 2026 Statement on Monetary Policy notes a stronger path for Australia’s trading partners this year, driven by firm trade flows and robust domestic demand, and concludes global growth will slow less sharply than previously expected. National Australia Bank reached similar conclusions in its October 2025 Forward View, upgrading global growth forecasts and pointing to stronger-than-anticipated momentum in the United States and parts of East Asia. According to the International Monetary Fund, headline inflation is projected to ease substantially through 2026, to around 3.7% globally, although inflation pressures will vary by region and remain a risk in the United States.
Expectations for US interest-rate cuts are a key driver of market positioning. Multiple market reports anticipate one to two Federal Reserve cuts that should move policy toward a more neutral stance, a shift that analysts say will put downward pressure on the US dollar. IG’s Forex Market Outlook and ING’s G10 FX note both highlight the potential for dollar weakness as the Fed eases, with ING flagging a scenario where AUD/USD could approach 0.70 in 2026. A softer dollar would tend to boost returns in non-US equity markets for Australian investors once currency effects are accounted for.
Within equities, the case for greater exposure outside the United States is persuasive. A combination of improving commodity fundamentals, stronger cyclical momentum in parts of Europe and Asia, and the currency tailwind from a weaker dollar supports allocations to ex-US developed markets and emerging markets. That said, US large-cap technology remains distinctive: the earnings capacity of major Nasdaq constituents continues to differentiate that market, with some firms demonstrating resilience even in a softer-dollar environment.
Australian equities are viewed more favourably than in recent years. The improvement reflects firmer commodity prices, rising earnings momentum and what some strategists see as an attractive valuation entry point after recent weakness in domestic technology stocks. The Reserve Bank’s improved external-growth assessment and NAB’s upgraded projections lend additional macroeconomic context to this more constructive stance on Australian shares.
Fixed income and defensive allocations should also be recalibrated to the changing yield landscape. Sovereign bonds now offer a meaningful premium over cash, and Australian government and corporate bonds appear to provide among the more compelling risk-adjusted opportunities in investment-grade fixed income. Gold retains appeal in US-dollar terms as a diversifying asset within multi-asset portfolios amid continued macro uncertainty.
Technology investment trends provide a broader structural backdrop. Mercer’s Economic and Market Outlook highlights substantial AI-related capital spending, approaching USD 500 billion, that is underpinning business investment in the United States and supporting global demand for high-tech goods and services. That investment is a potential medium-term growth engine for both developed and emerging-market exporters of technology and components.
Taken together, the macro and market signals point to a preference for international diversification outside the US, selective exposure to Australian equities and a cautious but constructive approach to fixed income and gold. Investors should, however, remain mindful that uneven regional inflation, policy risks and geopolitical trade reconfigurations could still produce divergent outcomes across markets.
- https://www.betashares.com.au/advisers/insights/h1-2026-investment-outlook/ – Please view link – unable to able to access data
- https://www.rba.gov.au/publications/smp/2026/feb/outlook.html – The Reserve Bank of Australia’s February 2026 Statement on Monetary Policy outlines an upward revision in the growth forecasts for major trading partners in 2026. This revision is attributed to resilient trade flows and robust domestic demand in several economies. The report also notes that global growth is expected to decelerate less sharply in 2026, as the rapid reconfiguration of trade flows and supply chains has mitigated the negative impacts of higher US tariffs. Additionally, the outlook for global inflation remains stable, with headline CPI inflation returning to central bank targets in some economies and expected to remain there.
- https://www.mercer.com/en-au/insights/investments/market-outlook-and-trends/economic-and-market-outlook/ – Mercer’s Economic and Market Outlook for 2026 projects steady global growth, driven by a resilient US economy supported by solid consumption, fiscal stimulus, and a surge in AI-driven investment approaching USD 500 billion. Easing monetary policy and stabilising trade conditions are expected to sustain momentum, while Europe benefits from German infrastructure spending and lower rates. The UK remains soft but fiscally stable, and Japan’s growth stays modestly above trend on rising wages and automation investment. China’s expansion is likely to hold near current levels as weak domestic demand offsets gains in high-tech manufacturing and AI localisation. Beyond China, emerging markets should grow at a decent pace, supported by loose policy, a softer US dollar, and strong tech exports in Asia, though higher rates are likely to weigh on parts of Latin America.
- https://www.ig.com/au/news-and-trade-ideas/forex-market-outlook-for-2026-251211 – IG’s Forex Market Outlook for 2026 anticipates that the US Dollar Index (DXY) will face considerable headwinds due to central bank policy divergence. The Federal Reserve is expected to implement one to two rate cuts toward a neutral stance around 3.00% – 3.25%, while other central banks pursue different trajectories. The European Central Bank’s extended pause at 2.00% creates favourable conditions for modest euro appreciation as the Fed eases. Additionally, uncertainty surrounding changes in Fed leadership adds another layer of negative sentiment toward the dollar as Jerome Powell’s term as chair ends in May.
- https://www.imf.org/-/media/Files/Publications/WEO/2025/October/English/text.ashx – The International Monetary Fund’s October 2025 World Economic Outlook projects that global inflation will decline to 4.2% in 2025 and to 3.7% in 2026, with notable variation across regions. Above-target inflation is expected in the United States, with risks tilted to the upside, while much of the rest of the world experiences subdued inflation. World trade volume is forecast to grow at an average rate of 2.9% in 2025–26, boosted by front-loading in 2025 yet still much slower than the 3.5% growth rate in 2024, with persistent trade fragmentation limiting gains.
- https://www.nab.com.au/content/dam/nab-email-composer/nabmarketsresearch/economics/pdf/The%20Forward%20View%20Global%20-%20Oct%202025.pdf – National Australia Bank’s October 2025 ‘The Forward View – Global’ report revises upwards global growth forecasts, highlighting resilience in the global economy. The report now expects global growth of 3.3% in 2025 and 3.0% in 2026, up from previous projections of 3.2% and 2.9%, respectively. This revision reflects stronger-than-expected growth in the United States and several East Asian economies. The report also notes that a bring forward of activity ahead of US tariff increases helped sustain activity earlier in the year, but this is now fading. Policy support has been evident, including from Chinese authorities in the first half of the year and through monetary policy easing. Support has also come from investment in AI, which has been a particular driver in US business investment.
- https://think.ing.com/articles/g10-fx-outlook-2026/ – ING’s G10 FX Outlook for 2026 discusses the challenges the US dollar may face due to central bank policy divergence. The Federal Reserve is expected to implement one to two rate cuts toward a neutral stance around 3.00% – 3.25%, while other central banks pursue different trajectories. The European Central Bank’s extended pause at 2.00% creates favourable conditions for modest euro appreciation as the Fed eases. The report also notes that the Australian Dollar (AUD) is well-positioned, supported by solid GDP growth in Australia and expectations of a rise in AUD/USD to 0.7000 in 2026.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article was published on 4 February 2026, making it current. However, similar content was published on 3 February 2026, which may indicate recycled material. ([betashares.com.au](https://www.betashares.com.au/insights/h1-2026-investment-outlook/?utm_source=openai))
Quotes check
Score:
7
Notes:
The article includes specific figures and projections, such as ‘headline inflation is projected to ease substantially through 2026, to around 3.7% globally.’ ([betashares.com.au](https://www.betashares.com.au/insights/h1-2026-investment-outlook/?utm_source=openai)) However, these projections cannot be independently verified, as no external sources are cited.
Source reliability
Score:
6
Notes:
The article originates from Betashares, a financial services company. While it is a reputable source within its niche, it may have a vested interest in promoting its own products and services, which could influence the objectivity of the content.
Plausibility check
Score:
7
Notes:
The claims made in the article, such as global inflation projections and expectations for US interest-rate cuts, are plausible and align with general economic trends. However, without independent verification, these claims cannot be fully substantiated.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents current economic projections and analyses; however, it lacks independent verification and originates from a source with potential conflicts of interest. These factors raise concerns about the objectivity and accuracy of the information presented.