In a report dated the 9th, Deutsche Bank expressed the view that the funding structure covering the US current account and trade deficits is shifting from a focus on Treasuries to equities, which could heighten risks for the dollar. As deepening geopolitical tensions make foreign investors more cautious about holding US government bonds, inflows into US stocks are expanding on the back of the AI boom, making the dollar more susceptible to the volatile tech sector and economic cycles. The bank's strategist, Mallika Sachdeva, noted that demand for Treasuries has historically provided a diversification benefit that supports the dollar during recessions, but if reliance on equity-based funding grows, the dollar will take on more characteristics of a risk asset and become more dependent on the AI boom. The US current account deficit in 2025 is around 1.12 trillion dollars, and the trade deficit is about 1 trillion dollars, making foreign capital inflows crucial for funding.
Deutsche Bank AktiengesellschaftDeutsche Bank published a report on US funding structure shifts; the report itself is a research output, not a direct financial event for the bank.