Industry insights:
Trends shaping the
US Consumer &
Retail sector
US is increasingly depending on the kindness of strangers. We see a plausible case that the increase in the US federal government deficit has led to a drop in US national savings and an increase in the need for foreign savings, translating into a wider current account deficit. Over the last decade, US net external indebtedness has risen to about 80% of US GDP.
Increasing external indebtedness is not a guarantee of bad outcomes, but it carries several implications and risks:
The ‘blame’ for the US trade deficit may lie more with US fiscal policy than the US administration would like to admit
Concerns about fiscal sustainability are likely to be reflected in risk premia in both the USD and fixed income markets
Higher risk premia may crowd out investment despite USD weakness
The USD and US bond prices may respond increasing rapidly to any deterioration in confidence among foreign investors
A USD and rates crunch could emerge if the fiscal bill steepens the debt path without boosting growth
Steve Englander on Bloomberg Odd Lots podcast: USD, US rates, tariffs and I reveal my best friend in FX analysis
Youtube | Apple Podcasts | Bloomberg
Amid the ongoing uncertainties surrounding US tariffs, inflation expectations, and declining consumer confidence, now is an opportune moment for companies to reassess the effectiveness of their financial policies.
While some businesses may be able to pass rising costs onto their customers, others could experience decreases in sales and profitability, which may strain their financial positions. Fortunately, since the pandemic, the Consumer & Retail sector has adopted a disciplined approach to capital allocation. Companies have significantly reduced spending relative to their cash flow, resulting in robust credit metrics. Our analysis shows that, on average, EBITDA could decline by as much as 41% compared to FY 2024 levels without negatively impacting current credit ratings. Essentially, this sector enjoys approximately 1.0x net leverage headroom, offering the flexibility to navigate challenges or invest in future growth.
Moreover, improved management of working capital can unlock substantial capital and enhance liquidity. By prioritising this aspect of capital structure and carefully utilising their existing balance sheet headroom, corporates can better position themselves to withstand the anticipated volatility over the next 12 to 18 months.
Amid shifting global market conditions, corporate treasury functions are reevaluating its global operating model and structural design. For strategic alignment, treasury is reassessing its organisational hierarchy to understand, who performs what activity and where. To drive cohesive decision-making, the focus is on centralising the core strategic activities and its analytics to the headquarters while, rationalising other activities across its regional hubs, shared service centres, and business’s field offices. Along with this, aligning treasury’s technological infrastructure with the redefined organisational design has become key, for treasury’s optimal performance.
This session attempted to provide insights to our client’s senior leadership attendees looking to better understand the current nuances, its complexities, and captured:
The re-shuffling of treasury activities and a framework to develop/re-design treasury technology landscape.
Mr. Matt Headley’s real life (Assistant Treasurer, Kimberly-Clark) treasury technology transformation journey for his organisation.
Insights into AI-led treasury digitisation covering:- Gen AI models to help in treasury functions such as: cash forecasting, exposure management, and investment optimisation (relevant in both centralised and de-centralised treasury structures and in-house banks).- Aigentics or, Agents of AI performing automated tasks especially where cross-functional workflows are involved.
Relevance of data integration platforms and the usage of tools like Power BI and SAP Analytics Cloud is becoming a new norm, for sourcing and analysing data across interconnected platforms to generate insights.
All the above enables treasury to navigate through the current complexities and take insights-driven decisions, based on real-time information.
As the pace of financial innovation accelerates, corporate treasuries stand at the frontier of transformation. This session dives into the next wave of disruption—where digital assets and artificial intelligence are converging to reshape how treasurers manage liquidity, risk, and data.
We explore the rise of stablecoins: digital currencies pegged to fiat that enable instant, programmable, and cross-border value movement. With pilots already underway across leading corporates and banks, stablecoins are evolving from concept to practical treasury tools—especially for internal funding, settlement acceleration, and 24/7 liquidity deployment.
Tokenisation of deposits and short-term debt instruments is unlocking new forms of transparency and automation. By embedding smart logic directly into the payment and settlement process, treasuries can reduce operational friction and build in compliance at the protocol level.
The session also looks at the growing role of AI—particularly predictive models that enhance cash forecasting, real-time anomaly detection to combat fraud, and generative AI tools that turn treasury data into insight-rich narratives and decisions. Together, these technologies are giving rise to the concept of the “autonomous treasury,” a digitally native function equipped to react in real time and drive enterprise agility.
This session equips treasury leaders with the strategic foresight to act: where to experiment now, how to prepare governance, and what capabilities to build for the next chapter of treasury evolution.
