East meets West: Navigating geopolitical and economic turbulence

Contrasts create uncertainty, but also opportunities. On 23 September, a group of ING economists from Asia, the US, and Europe gathered in Amsterdam to exchange insights and perspectives. These economists and researchers constantly track the latest developments, using real-time insights to make sense of today’s fast-moving global economy.

In an upcoming series of articles, these trends will be unpacked in more detail, offering practical insights and guidance to help companies seize opportunities and find certainty in an uncertain world.

The global economy has rarely felt more contradictory. Across the world, economic trends and markets are pulling in different directions, and ING economists and researchers witness these shifts Done up close every day. Opens in a new tabJames Knightley, Chief International Economist at ING in New York, sees confidence in Donald Trump’s agenda fading as tariffs, regulatory bottlenecks, and a cooling labour market erode optimism.

Inflation remains sticky. Many corporates worry more about regulation and unemployment than growth.

Europe tells its own story of contrasts. Opens in a new tabCarsten Brzeski, Global Head of Macro in Frankfurt, notes that Germany talks big on investment plans it struggles to deliver, while France battles deficits it cannot easily contain.

Both countries’ challenges weigh heavily on Europe’s ability to act as a unified bloc.

- he explains. And yet, the Netherlands continues to punch above its weight. Bert Colijn, Chief Economist in Amsterdam, observes that the country doesn’t experience weak demand but is mainly constrained by labour shortages and regulatory uncertainty. Companies remain cautious, delaying major investments. Relative to its neighbours, the country remains in a “luxury position”, but improving potential growth will be key for the coming years. 

Markets mirror these global tensions. Opens in a new tabPadhraic Garvey, ING’s Regional Head of Research in New York, points out that investors remain calm amid political interference at the Federal Reserve.

Markets are focused on the broader turbulence of Trump-era policy, treating disputes around Fed governors as secondary for now.

- he says. Yet that calm has limits. Should a Trump-led majority push through ultra-low rates, markets would react negatively. He also pointed to the US Treasury yields being fifty basis points above the risk-free 10-year Secured Overnight Financing Rate (SOFR), which he sees as a sign investors are not fully relaxed about deficits of six to seven percent of GDP.

Across currencies, Opens in a new tabChris Turner, Global Head of Markets and Regional Head of Research for UK & CEE in London, notes the longer-term trend of de-dollarisation, with policy makers increasingly pleading for the euro as a safe reserve asset.

A stronger euro could mark a ‘global euro moment, offering more stability in cross-border transactions and on average lower interest rates.

Amsterdam-based Opens in a new tabMichiel Tukker, Senior European Rates Strategist, stresses that for now government deficits weigh on bond markets, but over time the Draghi report’s call for deeper integration could enhance the euro’s international role.  

Energy markets carry their own contradictions. Opens in a new tabWarren Patterson, Head of Commodities Strategy in Singapore, warns that while oil and gas markets look calm, the underlying dynamics tell a different tale.

Markets have become somewhat numb to geopolitical flashpoints, adopting a wait-and-see attitude.

- he explains. Structural shifts also play a role: expanding liquefied natural gas (LNG) capacity in the US may keep prices suppressed in the near term. Patterson forecasts a surplus in oil and notes that gas prices in Europe are unlikely to return to pre-2022 levels. Even in the case of a peace deal between Ukraine and Russia a return of Russian pipeline gas to Europe is unlikely. The current environment with low prices, however, masks uncertainties that could quickly upend markets tomorrow. 

In the midst of these contrasts, corporates express cautious optimism. 

Risk isn’t the opposite of opportunity. Even amid geopolitical turbulence and a world full of contrasts, companies can leverage actionable insights to navigate uncertainty and plan strategically.

- concludes Chief Economist Opens in a new tabMarieke Blom. The role of Opens in a new tabING Research, she emphasised, is to remain curious: curious about what is really driving today’s global shifts, and curious about where certainty can still be found in uncertain times. 

This spirit of curiosity and cautious optimism will underpin a series of articles that follow, each exploring these themes and contrasts in greater depth. They will provide expert analysis and practical guidance to help corporates make informed decisions, manage risks, and identify opportunities. Stay tuned, as curiosity is what ultimately turns insights into action.