Repeated geopolitical shocks, rapid repricing of interest‑rate expectations and sharp swings in currency markets have reshaped how corporates approach risk, liquidity and strategy. The recent escalation of tensions in the Middle East has only reinforced the speed with which local events can transmit into global funding, FX and rates markets, shortening reaction times for treasurers and boards.
For corporates, the challenge in 2026 is not simply navigating uncertainty, but pursuing growth while remaining disciplined on efficiency, capital and risk. HSBC’s inaugural Markets Pulse Survey*, conducted in Q1 2026 with over 1,300 responses from corporates, revealed that 72.5% of respondents are net optimistic about their performance outlook for the next 12 to 18 months, which demonstrates a high degree of confidence amongst businesses.
Liquidity moves from buffer to strategic asset
Balance sheet optimisation is top of mind for corporates. In HSBC’s Markets Pulse Survey*, 42% of corporates identify it as a key strategic priority, alongside cost efficiency (66%) and digital transformation (56%). As companies pursue growth, there is a greater emphasis on resilience, execution and financial flexibility.
The focus is no longer on headline cash balances, but on how accessible and flexible liquidity remains under stress. This reflects the nature of the risks corporates are facing: US–China relations, AI and technology valuation, and sticky inflation are cited as the top macro concerns for 2026 in HSBC’s Markets Pulse Survey*.
The only constant is change. Every year brings volatility driven by different factors and even tail risks can quickly become high‑probability events. In those moments, being unprepared leaves you exposed when the tide goes out.
Volkan Benihasim, Global Head of Macro – FX, Rates and Commodities, Markets and Securities Services
For treasury teams, this shift translates into three immediate priorities:
- Build resilient liquidity buffers – calibrating cash levels and committed facilities to absorb shocks without reactive decisions
- Diversify funding and contingency structures – expanding access across markets and instruments
- Prioritise certainty over optimisation – recognising flexibility often outweighs short-term returns
In practice, this is where banks play a more strategic role – helping organisations assess liquidity across currencies and jurisdictions, model stress scenarios and structure contingency funding frameworks that balance flexibility with cost.
AI shifts from efficiency tool to strategic risk factor
Alongside traditional macro risks, artificial intelligence is emerging as both a source of opportunity and a growing area of concern for corporates and investors alike. In HSBC’s Markets Pulse Survey*, AI and technology valuations rank among the top macro risks for 2026, accounting for 20% of responses.
“Our surveys show AI is now central to both risk and opportunity,” says Benihasim. “Corporates are prioritising efficiency-led digital transformation, while also flagging AI valuations as a key risk for 2026.”
For treasury teams, this translates into three priorities:
- Identify high-impact use cases – prioritising AI applications with clear adoption potential and measurable efficiency gains
- Strengthen cross-functional collaboration – working closely with technology and IT teams to align implementation with business needs
- Leverage banking partners – drawing on peer insights and best practices to inform strategy and execution
Rate uncertainty complicates funding and duration decisions
Alongside these structural shifts, interest rate uncertainty has become a central challenge for treasury teams. Markets have repeatedly repriced expected policy paths across major economies, with volatility concentrated at the front end of yield curves. Shifting inflation dynamics, divergent central‑bank signals and geopolitical risk premia have all contributed to abrupt swings in funding costs.
What stands out in HSBC’s Markets Pulse Survey* is the range of views around the rate path. When asked about the outlook for G10 rates over the next 12 to 24 months, respondents are almost evenly split: 26% expect the Federal Reserve to deliver fewer cuts than currently priced, while 23% expect more. This dispersion makes it harder to anchor funding decisions to a single base case.
In practice, this is translating into three shifts in approach:
- Broaden execution across time horizons – spreading funding and hedging decisions across tenors to reduce exposure to any single rate outcome
- Embed scenario-based planning – using scenario analysis to assess how different rate paths impact cash flow, covenants and funding costs
- Stress-test strategic flexibility – ensuring balance sheet structures can withstand a range of rate environments without constraining decision-making
Supporting this requires more than market access. It calls for a banking partner capable of delivering tailored solutions aligned to an organisation’s specific needs and strategic direction.
“Consistency and long‑term thinking are critical in managing interest‑rate risk,” Benihasim explains. “Exposures change as supply chains, customer bases and operating margins evolve. That means risk policies need to be disciplined but flexible to align to the priorities of board and shareholders.”
Targeted hedging replaces blanket protection
A third theme is evident in how corporates approach risk management. Blanket hedging strategies are giving way to more targeted, cash‑flow‑aligned frameworks that focus on hedge effectiveness and cost, rather than maximum coverage.
At the same time, HSBC’s Markets Pulse Survey* shows that 51% of corporates expect to increase their overall hedging ratios for FX and interest rate exposures – signalling more active and selective risk management.
“Clients are carefully evaluating whether changes to their hedging strategies genuinely make sense, rather than simply following market trends,” says Benihasim. “Affordability and the cost of hedging matter, particularly where interest‑rate differentials are wide. The question is not how much risk to eliminate, but which risks are worth hedging and when.”
Hedging decisions also reflect a range of considerations beyond market direction alone. Internal treasury and risk policy is the primary driver, cited by 33% of respondents, but group risk appetite, cost of hedging, and accounting and P&L treatment each play a meaningful role at around 20%. This points to a more balanced and multi-dimensional decision-making process, where financial, operational and accounting factors are balanced.
For treasury teams, this translates into three priorities:
- Align hedging with underlying exposures – ensuring strategies are driven by cash flows and business realities, rather than static coverage targets
- Build flexibility into hedge structures – using dynamic ratios, optionality and staggered maturities to adjust protection as visibility evolves
- Avoid rigid policy execution – allowing room to recalibrate hedging as market conditions shift, while staying anchored to core risk management objectives
Increasingly, this is translating into more integrated hedging solutions – combining instruments, tenors and structures into frameworks that operate seamlessly in the background, enabling treasury teams to focus on higher-value priorities.
FX returns as a material driver of earnings volatility
Currency markets have reacted sharply to rate differentials and geopolitical developments, with dollar strength and sudden reversals amplifying global volatility. For many corporates, FX has once again become a meaningful P&L driver.
“FX is moving quickly in response to policy expectations and geopolitical risk,” Benihasim agrees. “Even modest shifts in rate differentials can trigger significant moves across major and emerging‑market currencies. That brings FX risk firmly back into board‑level discussions.”
For treasury teams, this points to three priorities:
- Connect FX strategy to business decisions – ensuring currency exposures are reflected in pricing, procurement and funding choices
- Incorporate market views selectively – using directional expectations to inform, but not dictate, hedging and balance sheet strategies
- Translate FX into board-level impact – clearly articulating how currency moves affect earnings, covenants and returns
For many corporates, this also means partnering with banks that offer deep access across currency markets, supported by a global network and strong data capabilities. Leveraging real-time pricing, proprietary analysis and sector insight, treasury teams can draw on a broader set of inputs to inform decision-making.
Finding the right partner
The ability to connect global insight with local execution has become more valuable. Interest‑rate cycles, geopolitical tensions, technology disruption and FX volatility do not occur in isolation.
Taken together, these trends point to a shift in how corporates manage risk. Liquidity is strategic. Rate uncertainty is structural. FX volatility is back at the centre of performance, while AI emerges both as a risk and opportunity. The most resilient organisations are those embedding flexibility, discipline and data-driven insight into decision-making.
“Volatility isn’t going away. The question is not whether markets will move, but how prepared corporates are when they do.”
Volkan Benihasim, Global Head of Macro – FX, Rates and Commodities, Markets and Securities Services
The survey results should be viewed in the context of shifting geopolitical conditions. Fieldwork was conducted prior to the escalation of the Middle East conflict, after which client sentiment has likely softened. This underlines the volatility of the current environment and reinforces the importance of securing financing and actively hedging risk.
This article reflects the views and opinions of the trading desk and not HSBC research. It is intended for informational purposes only and should not be considered as investment advice or a recommendation.
