Deutsche Bank's Ozan Tarman and Aditya Singhal on Understanding the Macro Risks

The global markets are defying expectations despite escalating geopolitical tensions, rising oil prices, and stalled disinflation—driven not by fundamentals alone, but by a profound structural shift in how the world thinks about risk, assets, and power. Ozan Tarman and Aditya Singhal of Deutsche Bank argue that the 'bus is empty': investors are underpositioned, creating a fragile but persistent rally fueled by AI optimism and a re-pricing of real assets like gold, infrastructure, and commodities. The core thesis? The West’s long-standing economic model—relying on China for manufacturing and services—is breaking down. As China builds its own tech stack, from AI chips to robotics, and the West scrambles to reshore critical industries, the world is entering a new era of 'deglobalization with a twist': not a full decoupling, but a strategic re-alignment where both sides must rebuild from the ground up. This shift is already visible in central bank gold buying, sovereign debt dynamics, and the rise of 'real assets' as the new store of value. Even Japan’s central bank has stepped in to calm markets, proving that 'risk parity' is now a global policy tool. The AI race, far from being a Western monopoly, is being matched by China’s parallel, cost-optimized advancements—making the West’s current AI-driven rally more fragile than it appears.