UBS On-Air: Market Moves

Investors and the Fed got a dose of relatively good economic data last week, yet interest rates rose again. Rising yields remains a dominant market story, however with a light calendar for economic data this week, and Q3 earnings season starting next week, macro might take a back seat in the near-term. Jason Draho, Head of Asset Allocation Americas from UBS Chief Investment Office, weighs in on the current environment and how to position accordingly. Host: Daniel Cassidy

The US employment report offered few reliable facts for investors, other than the reminder that data is revised a lot. If markets listened to economists with the reverence they deserve, that would not be a surprise. Markets were surprised—revisions suggest a weaker employment position. The sense of an affordability crisis is likely to be reinforced—wage growth after adjusting for inflation is near zero, and after adjusting for inflation perceptions is probably negative.

As long-term US Treasury yields have climbed to levels not seen in more than two decades and today's AI investment boom draws comparisons with the internet buildout, the 1999 cycle increasingly offers a useful point of reference. This episode explores the parallels and key differences between the two periods, and examines what rising term premiums and fiscal dynamics could mean for rates and portfolio positioning.

Housing affordability is under pressure across many major cities. Yet the UBS Global Real Estate Bubble Index 2026 shows that housing markets are following increasingly different paths as accumulated financial wealth supports demand in prime residential segments. Is wealth overtaking income as a driver of demand? And how is that reshaping housing risk? In this episode of Across the Pond, host Belinda Ulander speaks with the index’s co-authors, Matthias Holzhey and Maciej Skoczek, about Zurich’s position at the top of the ranking, diverging trends across Europe, and the importance of selectivity for investors.

The US employment report has a wide range of estimates around the payrolls data. This is not surprising—labor market data precision is challenged by low response rates and structural changes in the way people work. The general expectation is for an OK report with stable unemployment.

Xingchen Yu, Senior Investment Strategist from the UBS Chief Investment Office, shares reflections from his latest trip to China, where AI ambition and seamless digital convenience coexist with cautious consumers, fierce competition, and lingering property pressures. Through stories from the ground, he explores an economy moving at two speeds, and what the latest Trump-Xi summit means for a relationship defined by both engagement and strategic competition. Reference Xingchen’s recent blog: Reflections on my latest trip to China, two years on. Host: Daniel Cassidy

The important point from yesterday’s US data was not the larger-than-expected downward pressures on reported inflation—these are technical changes that US consumers do not experience in their daily struggles with the affordability crisis. The important point was savings. Lowering savings rates are how US consumers keep spending. The savings rate level was revised higher. This suggests savings can pay for tariffs and oil prices for longer.

UK second quarter GDP was revised stronger, as new methods reveal how much new economic activity has been missed from the data. Rising real disposable incomes encouraged a rise in the UK household savings rate. If the Gulf war does not, in fact, turn into a forever war and oil prices come down, the impact on real disposable incomes should be positive; but that would probably then be used to rebuild savings rates rather than accelerate spending.

The rise in treasury yields continues to be top of mind for investors - Jason Draho, Head of Asset Allocation Americas from the UBS Chief Investment Office, explains why they’re rising. We also touch on an outlook for oil prices, new developments in agentic AI, and what it all means for your portfolio. Host: Daniel Cassidy

Bond yields and oil prices continue their close relationship. Central banks are supposed to look through an oil price shock as being beyond their control. However, if central banks seemingly care about oil, the only policy remedy is to weaken the non-oil economy, as something they can control. In that case, higher oil prices make it more likely interest rates will have to rise to recession-inducing levels. We are not at that stage, but there are enough oil price comments to have markets contemplating more repressive monetary policies.