Market Musings 240126: US dollar at a critical juncture

Market Musings 240126

US dollar at a critical juncture

Weekly Podcast and Snapshot:

Infrastructure: Laying the foundation for growth

Infrastructure is the economic backbone linking people, goods, data and markets. Recent years have seen a rapid evolution of the sector sustained by robust economic growth and breakthrough technologies, sparking strong investor appetite.

Today’s demand is powered by three key forces: (i) digitalisation and electrification (AI‑driven data centers, EV‑charging networks), (ii) renewed government commitments, and (iii) the need for assets that hedge geopolitical and macro‑economic uncertainties.

AI, 5G networks, cloud computing and EV‑charging are spurring a massive build‑out of hyperscale data centers, and a resilient power grid. In parallel, the electrification of transport and heavy industry fuels unprecedented demand for both conventional and clean‑energy generation, transmission and battery storage. This propels record‑level investment across the entire infrastructure sector.

Similarly, governments are putting in place spending plans to revive and upgrade their infrastructure driving major infrastructure investment.

Finally, infrastructure is emerging as a natural inflation hedge with low correlation to the public markets providing investors the hedge they need in times of uncertainties.

US dollar: teetering on the edge of a breakdown?

This has been a potentially pivotal week for the US dollar. Several factors have driven recent...