Hey {{first_name}} 👋!
In today’s Commercial Awareness Update we’ll cover what’s really going on in the world as 2026 starts (and how to talk about it in interviews).
January interviews are make or break. By this point, interviewers don’t want buzzwords.
They want to see whether you understand how the global system is actually functioning right now.
If you don’t and the next candidate does, you know what the outcome is going to be.
So this update focuses on five big forces shaping 2026, explained slowly, clearly, and with direct links to Investment Banking (IB), Asset Management (AM), and Sales & Trading (S&T). Enjoy!
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1. Interest Rates Have Started Falling, But This Is NOT a Boom
What’s happening (step by step)
After nearly four years of rising or high interest rates, central banks have finally started cutting.
Inflation has come down from post-COVID peaks.
Supply chains are more stable.
Energy prices are no longer exploding.
So central banks no longer need to “slam the brakes”.
But, and this is the key point, rates are being cut because growth is weak, not because everything is fine.
Economic growth across the US, UK, and Europe feels:
slow
uneven
fragile
This isn’t a return to the free-money era of 2015–2020.
Why this is happening
High interest rates over 2022–2025 did real damage:
Companies delayed investment.
Hiring slowed.
Consumers cut spending.
Property markets cooled sharply.
As such, central banks are now trying to stabilise, not stimulate.
They want:
no recession
no inflation comeback
no financial accidents
That’s a very narrow path.
Why it matters (by division)
Investment Banking (IB)
Refinancing activity increases as borrowing becomes cheaper.
Companies revisit delayed M&A. But deals are cautious and valuation-sensitive.
Restructuring and liability management are still busy because many firms took on expensive debt during the high-rate period.
Asset Management (AM)
Investors rotate out of cash into bonds and equities.
Falling rates help asset prices, but weak growth caps upside.
“Quality”, profitable companies are favoured over speculative growth.
Sales & Trading (S&T)
Rate expectations drive daily moves in bonds, FX, and equities.
Traders care less about whether rates are cut and more about:
how fast
how deep
whether inflation returns
Interview soundbite
“Rate cuts in early 2026 are about preventing slowdown rather than restarting growth. That supports refinancing and markets, but firms still need to be cautious because demand remains fragile.”
2. The Global Economy Is Fragmented, Even Without a Crisis
What’s happening
There’s no single global shock dominating headlines in January 2026.
But underneath the surface, the world is structurally fragmented.
US–China relations remain tense.
Europe is more inward-looking.
The UK is navigating post-Brexit independence.
Conflicts in Eastern Europe and the Middle East continue to affect energy and trade routes.
Globalisation hasn’t collapsed, though it has become selective, political, and regional.
Why this is happening
The last five years changed how governments think:
Covid exposed supply chain fragility.
Wars exposed energy dependence.
Technology raised national security concerns.
Governments now prioritise:
resilience
security
alignment
over lowest cost.
Why it matters
Investment Banking (IB)
Companies need advice on relocating production and restructuring supply chains.
Cross-border deals now involve political, regulatory, and national-interest considerations.
Regional M&A becomes more important than global mega-deals.
Asset Management (AM)
Country and political risk matter more for valuations.
Capital flows into “aligned” markets.
Emerging markets are no longer treated as one group — differentiation is key.
Sales & Trading (S&T)
FX and commodities react quickly to geopolitical headlines.
Shipping routes, sanctions, and tariffs create volatility.
Political risk is now a daily trading input.
Interview soundbite
“Even without a major crisis, geopolitics is reshaping capital flows. Firms now design strategies around resilience and alignment, which affects where investment and deal activity happens.”
3. Energy: Transition Ambitions vs Economic Reality
What’s happening
As 2026 begins, energy markets reflect a deep contradiction.
On one hand:
Governments push hard on net-zero.
Investment in renewables, grids, and storage is accelerating.
ESG pressure remains strong.
On the other hand:
Fossil fuels are still essential for affordability and security.
Electricity grids are under strain.
Energy prices remain politically sensitive.
Why this is happening
The energy transition is expensive and slow:
Renewables need massive upfront investment.
Grids were not built for EVs, AI, and electrification.
Clean energy demand is rising faster than supply.
Meanwhile, economic weakness reduces overall energy demand — creating uneven price movements.
Why it matters
Investment Banking (IB)
Strong demand for project finance and infrastructure advisory.
Energy companies restructure portfolios (selling fossil assets, buying renewables).
Governments increasingly co-invest with private capital.
Asset Management (AM)
Long-term investors favour infrastructure and transition assets.
Short-term volatility makes stock selection critical.
Energy transition winners and losers diverge sharply.
Sales & Trading (S&T)
Energy and metals remain highly volatile.
Transition metals (copper, lithium) stay structurally important.
Policy decisions can move prices overnight.
Interview soundbite
“The energy transition is accelerating, but traditional energy still matters. That tension is driving volatility, investment opportunities, and financing demand across markets.”
4. AI Is No Longer a Trend, It’s Infrastructure
What’s happening
AI is no longer an option. It’s a must have.
Most large firms are using it for:
analytics
operations
risk management
customer service
The conversation has shifted from “Should we use AI?” to
“How do we control it?”
At the same time:
Data centres consume huge amounts of energy.
Regulators are tightening oversight.
Concerns around bias, explainability, and liability are growing.
Why this is happening
Competitive pressure forces adoption.
Costs have fallen.
But AI systems now influence real financial outcomes — loans, trades, pricing.
That makes regulators nervous.
Why it matters
Investment Banking (IB)
Faster modelling and due diligence.
Higher expectations around accuracy and governance.
Data quality becomes a deal risk.
Asset Management (AM)
AI improves portfolio monitoring and risk control.
Regulators demand transparency — “black boxes” are unacceptable.
Investment teams need both tech and judgment.
Sales & Trading (S&T)
AI-driven strategies are widespread.
Poorly designed models can amplify volatility.
Risk management becomes more important than speed.
Interview soundbite
“AI is now a core input into financial decision-making. The edge comes from using it responsibly, not just aggressively.”
5. ESG Has Entered Its Enforcement Era
What’s happening
ESG in 2026 looks very different from ESG in 2020.
Regulators are actively investigating greenwashing.
Disclosure requirements are stricter and more detailed.
Governments directly fund green projects, not just incentivise them.
Talking about sustainability is no longer enough. Firms must prove impact.
Why this is happening
Investors want credibility.
Climate risk is financial risk.
ESG failures damage trust and capital access.
Why it matters
Investment Banking (IB)
ESG due diligence is now part of deal risk.
Growth in sustainability-linked loans and bonds.
Reputational risk matters more than ever.
Asset Management (AM)
ESG claims must be backed by data.
Funds face scrutiny from regulators and clients.
ESG failures can trigger outflows.
Sales & Trading (S&T)
Growth in carbon markets and green instruments.
ESG headlines move prices quickly.
Sustainability is now a tradable theme, not just branding.
Interview soundbite
“ESG has moved from marketing to enforcement. Firms that integrate it properly attract long-term capital, while those that don’t face regulatory and reputational risk.”
If You Remember Nothing Else, Remember This
As we go into 2026, the world of finance feels very different to the boom years people love to talk about.
This isn’t a cycle of excess.
It’s not about cheap money, aggressive risk-taking, or chasing growth at any cost.
2026 is about stability, control, and discipline.
After years of shocks (Covid, inflation, rate hikes, wars, supply chain breakdowns) firms are tired of being surprised.
Their main question right now isn’t “How fast can we grow?”
It’s “How do we stay resilient if things go wrong?”
That mindset shows up everywhere:
in how companies borrow
in how investors allocate capital
in how trading desks manage risk
in how regulators write rules
How to Sound Like You Belong in the Room
You don’t need big words.
You don’t need strong opinions.
You definitely don’t need predictions.
You just need to calmly explain three things:
What’s happening
Describe the situation clearly, without hype.Why it’s happening
Show you understand incentives, pressures, and trade-offs.How it affects decisions
Explain what firms actually do differently as a result.
If you can do that (slowly, confidently, and without sounding like a ‘know-it-all’) you’ll sound like someone who belongs in the room.
Because that’s exactly how people inside the room talk.
Hope you found this update helpful. Let me know by using the poll below.
Until next time, peace!
Afzal
Founder, Finance Fast Track
Author, Breaking Into Banking