2025/08 Market Situational Awareness
August Market Review: Flows Recalibrate as Policy Tightening Persists
Asset flows and factor leadership adjusted to a tighter policy regime, with equities showing increased selectivity as investors rotated toward quality, value, and cash-generative exposures. Rate-sensitive segments and speculative positioning remained under pressure, while dispersion across sectors and styles widened materially.
Cross-asset signals reinforced a restrictive macro backdrop, as real rates stayed elevated, FX markets reflected defensive positioning, and growth expectations moderated. The combination of tightening financial conditions and recalibrating risk premia pointed to a market environment favoring disciplined allocation and tactical positioning over broad beta exposure.
