LionGlobal Says

20 Feb 2026

Macro Movers & Shakers

Growth Inflation Policy
US The US economy is expected to grow steadily in 2026, supported by strong AI-related investment, government spending, and the expected rate cuts. Labour market remains in a ‘slow to hire and slow to fire’ steady state. Increase business investment should improve economy due to the restoration of Tax Cut and Jobs Act incentive. Inflation should ease further in 2026 but is likely to stay above the Federal Reserve's target. Wage growth and steady consumer demand may keep price pressures from falling quickly. The Federal Reserve (Fed) will lean towards easing rates to support employment and growth, while upcoming board changes could affect the size and speed of rate cuts.
Europe Europe is set for a mild improvement in 2026. Germany’s higher infrastructure and defense spending should help lift growth, while easier credit conditions support the recovery. However, export momentum may stay weak due to US tariff pressure, lingering trade uncertainties, and competition from China. Eurozone inflation is expected to continue cooling as energy prices normalize and demand stays moderate. Price levels should move closer to the European Central Bank’s target, though not fully reach it. The European Central Bank (ECB) is likely to stay on hold in the near term as policymakers see the economy in a state of equilibrium as inflation has stabilized, and the euro-zone economy has weathered the global trade stress and geopolitical upheaval surprisingly well.
Asia Asia’s outlook is mixed. China’s growth is likely to slow as exports weaken and the property market remains soft, though tech-driven industries provide some support. Domestic demand should hold up but not accelerate. Other Asian economies, especially Korea and Taiwan should benefit from global tech spending but may feel the drag from China’s slower pace. Inflation in Asia is generally lower and more stable. China’s softer growth and weak property market should keep price pressures contained, though food and energy costs remain watch points. Singapore raised 2026 inflation target from 0.5% -1.5% to 1% -2% due to upside risk to economic growth. Across the broader Asia region, inflation remains well-contained thanks to steady supply chains and moderate demand, allowing central banks to keep policy balanced, while China still has room to cut borrowing costs or lower bank reserve requirements if needed to support its 4.5 - 5% growth target. MAS has kept its SGD policy unchanged in the latest meeting.
Japan Japan is expected to post modest growth in 2026, supported by steady wage gains and ongoing corporate investment. With the landslide victory by ruling LDP, the government is in powerful position to amend constitution and push through fiscal spending. Japan’s inflation is likely to stay above the Bank of Japan’s goal as wage gains broaden, services prices remain sticky, and may fall more slowly than in other regions. Bank of Japan (BoJ) remains well behind the curve, and the market anticipates additional hikes by the end of 2026. Ueda has signaled that policy normalization is likely to continue gradually rather than end at 1%.
RISKS
- A market selloff triggered by a re-rating of valuations across AI-tech companies
- Persistent inflation and concerns over Fed independence creating interest rate volatility and leading to a steeper yield curve
- Geopolitical risks from a widening of Russia/Ukraine war, tensions over Greenland, US interventions in Iran, and the China-Japan

Sensible Considerations

Valuation based on Price-to book ratio.

At a Glance | General Product Suite

*This is an actively managed ETF
**CPFIS Funds: LionGlobal Short Duration Bond Fund Class A SGD (Dist), LionGlobal Singapore Fixed Income Investment Class A SGD, Infinity Global Stock Index Fund SGD, Infinity Global Stock Index Fund Class C SGD, Infinity U.S. 500 Stock Index Fund SGD, LionGlobal Asia Pacific Fund SGD, LionGlobal China Growth Fund SGD, LionGlobal Japan Growth Fund SGD, LionGlobal Japan Growth Fund SGD-Hedged and LionGlobal Singapore Trust Fund SGD.
All data are sourced from Lion Global Investors as of 31 January 2026, unless otherwise stated.

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