narios

A structural shift is appearing in global capital flows as European institutions begin to recalibrate their reliance on U.S. markets. While the dollar has long been the bedrock of international finance, a convergence of new pressures is forcing a strategic pivot.

Key Drivers of the Shift:

• Fiscal Sustainability: Persistent U.S. deficits and growing debt are raising long-term concerns for sovereign wealth and pension funds.

• Geopolitical Friction: Trade uncertainties and the move toward "strategic autonomy" are pushing Europe to insulate itself from U.S.-centric risks.

• Valuation Gaps: With U.S. tech reaching historic multiples, capital is seeking better value in European equities and "safe-haven" Euro-area bonds.

The Bottom Line: This isn't a sudden exodus, but a calculated diversification. As Europe builds deeper internal capital markets—such as the digital euro and unified defense bonds—the dollar's unipolar dominance is being tested. For investors, this signals a more volatile, multi-polar era for global risk.