Investing.com -- Goldman Sachs said it maintains a tactically neutral position for three months while staying modestly pro-risk over 12 months, according to a report released Tuesday.

The investment bank reported that US labor market data exceeded expectations on Friday, with nonfarm payrolls rising by 162,000 in August. Employment growth was revised higher and the unemployment rate held steady at 4.1%. The report increased market expectations of a September rate hike, despite White House calls for lower rates.

The focus this week will be on US PPI and CPI data and upcoming central bank decisions, including the ECB meeting.

The procyclical rotation across global assets continued over the summer, supported by higher nominal growth, but has slowed. Commodities led returns, particularly European gas and refined products amid tensions around the Strait of Hormuz. Grains also posted one of the largest cross-asset moves, alongside strong agricultural commodity returns.

Goldman Sachs noted that a stronger "Super El Niño" could add to food-price inflation through supply risks in concentrated agricultural markets, particularly sugar, while easing pressure on European gas storage if temperatures remain mild.

Broad equity benchmarks remained relatively range-bound, but leadership shifted materially. Energy led returns, while Financials and Health Care emerged among the strongest non-energy sectors.

Global sovereign bonds sold off as longer-dated yields approached post-GFC highs, led by real yields. The spike was driven by strong nominal growth, fiscal concerns, and crowding out from AI-related debt issuance.

Gold rallied despite higher US 10-year real yields. US Treasury interventions in foreign exchange and long-dated Treasuries increased demand for safe havens like Gold, CHF, and Bitcoin. In FX markets, KRW also rallied materially.

Single-stock implied volatility reached a record peak of 2.9 times the implied volatility of the market in mid-July before beginning to normalize. The VIX remains relatively anchored despite rising macro headwinds.

Goldman Sachs recommended combining global AI exposure with high-dividend and low-volatility styles. Following the August volatility reset, attractive hedges include Momentum collars, VIX call spreads, EUR/CHF puts and puts on Financials, Energy and TOPIX alongside KOSPI calls.