1. The dollar is weakening as traders reduce bets on Federal Reserve interest-rate hikes following weaker-than-expected US economic data.

There is now less than 30% chance that the Fed will raise its policy rate in September, down from about 70% odds at the end of last month.

2. Europe's time to shine.

Equity strategists are positive about European stocks again, given improving earnings performance and a better macro backdrop.
Last week Goldman Sachs lifted its target for the STOXX 600, while UBS and Barclays also sounded optimistic.

“We continue to target fresh index highs into year end. The earnings tailwind underpinning our stance is clearest in Europe, where we expect Eurozone EPS growth of 18% in '26 and 12% in '27”, says JPMorgan.

JPMorgan says Europe is attempting to move from a model targeting efficiency and economies of scale toward a greater focus on security, resiliency, and strategic autonomy. “The implication for markets is a longer lasting, policy-supported capex cycle that — relative to the US — starts from deeper under-investment in defence readiness, grid build, and industrial capacity, so the catch up could be meaningful.”

Positioning also leaves room for the move to extend. Europe remains relatively lightly owned versus other major markets.

3. Energy security has become a critical priority.

For European governments and companies, securing reliable and affordable energy is now a strategic requirement, not only to support rising demand, but also to protect industrial competitiveness, digital infrastructure, and broader economic resilience.
The post REPowerEU drive to cut strategic energy dependence has shifted from ambition to implementation. The result is a sustained demand pull for grid equipment and renewables build.
Investment in the power grid is one of the most overlooked challenges in the energy transition. Renewable energy projects cannot connect to the grid, and electrification
cannot move forward, without major upgrades to transmission and distribution networks. Analysts see a growing demand over the next decade for Capital Goods companies that make electrical equipment and cables, as well as for the regulated Utilities that own the networks.

4. Nuclear is also part of the energy puzzle.

For a decade the political direction was to close nuclear plants, but the energy shock changed the calculation. Governments realised that renewables alone cannot guarantee power when the wind does not blow and the sun does not shine, and that importing gas is the very dependence they are trying to escape. Nuclear solves both problems at once. It is domestic and it runs around the clock, which is exactly what “energy security” requires. In the last few years, several countries have reversed course, extending plant lives and backing new builds.
Below: Uranium is moving higher from the lows in March.

5. The king of AI is not American.

Alibaba’s open-weight models have accumulated more than 3 billion global downloads in the past six months, eclipsing Meta, Alphabet and domestic peers to become the world’s No. 1 AI model.
Meanwhile, Deepseek CEO Liang Wengfeng says that future AI systems — and eventually AGI (Artificial General Intelligence) — will be open. While America will maintain its capability advantage for now, China, in his eyes, will play the role of token factory at global scale, pushing the price of intelligence down as it did for countless other industries during its manufacturing boom.

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