Economics
- European Central Bank with small interest rate cut in December.
- Donald Trump is back and threatening tariffs.
- The Bank of England is hampered by price pressures in the services sector.
Equities
- Trump's US election victory sparks US equity rally. Trade war concerns weigh on European and Asian equities.
- Q3 earnings growth of Stoxx 600 companies at +5%, while sales growth weakens year-on-year.
- We remain optimistic for the year-end. Positive year-end seasonality likely, especially in the US.
Bonds
- Strong US economy and Trump re-election support US yields. Europe faces political and fiscal uncertainties.
- Weaker eurozone activity and the prospect of US tariffs are weighing on corporate bonds.
- Given the increased interest rate volatility, we are keeping duration at a neutral level across bonds.
Alternative investments / commodities
- The supply of crude oil remains abundant, but a massive increase in US production under Trump is unlikely.
- Despite a temporary setback, gold remains supported by fundamental factors.
- In the short term, industrial metals need an economic recovery in the industrial sector. Medium-term drivers remain intact.
Currencies
- In the short and medium term, there is a lot going on in favour of the US dollar.
- Weak economic data and the war in Ukraine weigh on the euro.
- The strong franc is a cause for concern for the Swiss National Bank.
