Standard Chartered's June 2025 Outlook: Is the Global Rally Just Getting Started?

As global markets show signs of resilience, Standard Chartered’s June 2025 outlook paints a cautiously optimistic picture.

The bank sees potential for further gains in equities, particularly in the US and China, while highlighting opportunities in high-quality bonds and gold.

However, risks such as US fiscal deficits, trade policy uncertainty, and currency fluctuations remain on the horizon.

For Singaporean investors, this presents both opportunities and challenges. Here’s a detailed breakdown of the key insights and their implications.

Strategic Market Views

1. Global Equities:
   • Upgraded to Overweight due to easing US trade policy risks, improved market technicals, and strong corporate earnings.
2. US Equities:
   • Upgraded to a small Overweight as the “Sell America” trade is considered overdone.
3. China Equities (Asia ex-Japan):
   • Overweight due to policy stimulus and a softer US dollar, which benefits export-driven economies.
4. Gold:
   • Downgraded to a Core Holding, with near-term price targets at USD 3,100/oz and a 12-month target of USD 3,500/oz.
5. High-Quality Bonds:
   • Still attractive at current elevated yields, offering stable returns in a volatile environment.

Macro Scenarios and Probabilities

Equity Forecasts: Where to Look

Opportunistic Equity Ideas

1. US:
   • Focus on sectors like semiconductors, software, communication services, and major banks.
2. China:
   • Non-financial high-dividend SOEs and the Hang Seng Tech Index are highlighted.
3. Europe:
   • Banks and industrials offer potential upside.

Bond Strategy: New Opportunities

1. New Bullish Views:
   • US 20Y+ Treasury Bonds and UK Gilts (FX unhedged).
2. Still Bullish:
   • US Agency MBS and TIPS remain attractive.
3. Downgrade:
   • Developed Market Investment-Grade Government Bonds were downgraded to a Core Holding due to inflation and fiscal risks.

FX Forecasts: What to Expect

Commodities: Gold and Oil

Technical & Quant Models

1. Stock-Bond Rotation Model:
   • Slightly Overweight Equities, bullish short- and long-term.
2. S&P 500 Levels:
   • Resistance: 6,088.
   • Support: 5,476.
3. Bullish Bias Markets (short-term):
   • US, China, UK.
4. Neutral:
   • Europe ex-UK, Asia ex-Japan, Japan.

Top Risks to Watch

1. US Fiscal Deficit & Bond Yields:
   • Credit rating downgrade raises tail risk.
2. Tariff Policy Reversal:
   • The July 2025 expiry of the US 90-day trade pause is critical.
3. China:
   • Continued deflationary pressure; more stimulus expected.
4. Europe:
   • Germany’s €500bn infrastructure plan may limit ECB rate cut scope.

Implications for Singaporeans

1. Global Equity Rally:
   • A window for gains exists, especially in US and China’s equities.
   • Positive for Singaporeans exposed to HK-listed Chinese tech via ETFs or mutual funds.
2. Singapore Dollar (SGD):
   • USD/SGD expected to rise to 1.34 in 12 months due to slowing growth and easing inflation.
   • MAS lowered core inflation targets; MTI cut 2025 GDP forecasts.
3. Bond Yields:
   • Attractive opportunities in long-duration bonds like US 20Y+ Treasuries and UK Gilts.
4. Gold Prices:
   • Near-term consolidation expected; consider holding rather than aggressively adding.
5. Emerging Markets (EMs):
   • A weaker USD supports fund flows into EMs, benefiting Singapore-based investors with ASEAN or India exposure.
6. Singapore REITs & Exporters:
   • Lower global rates could reduce financing costs, but tariffs may weigh on export demand.

Do’s for Singaporean Investors

Don’ts for Singaporean Investors

Conclusion

The global rally appears to have room to run, with equities, high-quality bonds, and gold offering strategic opportunities.

However, Singaporean investors must navigate risks such as currency fluctuations, trade policy uncertainty, and slower domestic growth.

By rebalancing portfolios, diversifying regionally, and staying vigilant about macro risks, investors can position themselves to capitalize on the ongoing recovery while safeguarding against potential headwinds.

Is the global rally just getting started? For those who prepare wisely, the answer could very well be yes.