Goldman Sachs

The pound's post-Brexit recovery has, according to Goldman Sachs, now overshot the fundamentals that justified it. Goldman's GSDEER model labels sterling the most structurally overvalued G10 currency, a harder verdict than the bank has issued for years, and its FX team is recommending a long EUR/GBP position as the explicit trade. The mechanism is straightforward: Goldman projects three 25bp Bank of England cuts by end-2026, more than markets currently price, which narrows sterling's yield advantage against the euro just as UK fiscal consolidation bites into domestic growth. For context, Goldman's earlier fair-value estimate for GBP sits around $1.25, well below pre-Brexit levels of $1.45, and the bank sees the currency as extended even in a weakening-dollar environment. UK importers and any business carrying dollar-denominated costs should revisit their hedging book before the BoE delivers the first cut the market has not fully priced.

Goldman Sachs is anchoring SpaceX's planned $50-75 billion IPO at a $2 trillion valuation, making it the largest listing in history. The bank also arranged a $20 billion bridge loan to clean up $17.5 billion of X and xAI debt before the public debut, removing cross-company liability concerns. Separately, Goldman is offering share-backed loans to existing SpaceX investors at up to 25% of their stake value, providing liquidity while preventing selling pressure ahead of the IPO. Musk told a Tel Aviv summit he's 'back in Texas working on plans for an initial public offering' and needs to 'get the SpaceX IPO stuff going here pretty soon.' The fee pool from underwriting and lending could net Goldman hundreds of millions.

Goldman Sachs revised its yuan forecasts higher across all timeframes, calling the currency one of its highest conviction trades for 2026. The bank's GSDEER model shows the yuan trading 30 percent below fair value against the dollar, with analyst Teresa Alves pointing to China's export strength and current account surplus as drivers. New targets of 6.50 yuan per dollar by year-end would represent the strongest level since 2018. The call matters because Goldman correctly predicted the 2005 revaluation cycle, and current positioning shows yuan bears retreating after months of one-way bets.

Regional regulatory concerns just trumped Goldman's AI ambitions in Asia. Staff in Hong Kong lost access to Anthropic's Claude weeks ago, cutting short a partnership that embedded the startup's engineers for six months to build AI agents for trade accounting and compliance. The shutdown is geographically specific, suggesting data sovereignty rules or local compliance issues rather than performance problems. Goldman's bet on AI agents to constrain headcount growth under David Solomon now faces the reality that cross-border AI deployment isn't as simple as flipping a switch.

Goldman expects Brent crude to hit $71 per barrel in Q4, up from its previous $66 forecast, but warns of $140 spikes if the Strait stays closed. The bank models 21 days of low flows followed by 30-day recovery, assuming the IEA releases a record 400 million barrels from strategic reserves. Middle East production has dropped 14.5 million barrels per day since the war began, mostly from precautionary shut-ins rather than field damage. If disruptions stretch to 10 weeks, Goldman sees peak prices hitting $160 with Q4 still at $115, pushing December inflation to 3.1 percent and complicating Fed rate cuts.

Royal Bank of Canada hired two senior industrials bankers from Goldman Sachs and JPMorgan, signaling Canadian banks are serious about competing for cross-border M&A advisory fees as dealmaking rebounds. Raj Gandhi and Sarah Choi bring relationships with North American manufacturing and infrastructure clients, sectors where RBC sees opportunity to steal market share from bulge bracket rivals. The hires reflect a broader Canadian bank strategy: use relationship banking strength and competitive fee structures to win mandates from mid-market industrials companies that Wall Street majors often overlook. RBC's industrials advisory revenue jumped 34 percent last year, making talent acquisition a priority for 2025 expansion.

Goldman Sachs strategist identifies investment opportunities emerging from Middle East shipping disruptions.

American investors are rotating back into Japanese equities as Middle East war premium fades, according to Goldman Sachs flow data. US buyers added $2.3 billion to Japan-focused funds in the past fortnight, the largest inflow since October. The yen's recent stability around 155 per dollar has reduced currency hedging costs for dollar-based investors. Goldman expects this trend to accelerate if the Bank of Japan holds rates steady next week, keeping the carry trade attractive.

Goldman Sachs just staked its market outlook on central bank relief that European policymakers are actively resisting. The bank's strategists argue equity recovery hinges on 'rates relief', while ECB board member Muller warns against rushing into cuts despite inflation pressures. This disconnect matters more than usual: equity valuations now assume dovish pivots that monetary authorities refuse to signal, setting up either a policy surprise or a repricing shock. Goldman's call works only if central banks blink first.