At a glance
Economics
- Trump's tariff policy is weakening the US and postponing the recovery in the eurozone. We expect deals by July 2025.
- US tariffs: more inflation in the USA, less in Europe. ECB can cut interest rates further, Fed has no reason to do so.
- New German government: Additional spending on military and infrastructure and reforms can strengthen growth.
Equities
- US equities are suffering from negative economic surprises and the uncertainty caused by Trump's tariff policy.
- Earnings revisions for Europe have recently turned clearly negative.
- In the short term, the low positioning and negative sentiment could provide support. Anti-cyclical trading preferred.
Bonds
- Unpredictable customs and economic policies in the US are unsettling companies and investors alike.
- Trump's policy agenda (tariffs, immigration, debt) increases the risk of inflation. We are keeping duration close to neutral.
- Credit with continued good fundamentals, however, upward trend and inflows appear to be slowing.
Commodities
- After a good performance, gold is likely to be susceptible to a setback in the short term. The structural drivers remain intact.
- OPEC+ production increases are being curbed by the compensation plan. Supply nevertheless remains ample.
- Industrial metals are being driven by US tariff policy. However, the supply of copper remains tight and demand high.
Currencies
- Trump's tariffs have put the US dollar under strong pressure, while the euro has made significant gains.
- The status of the dollar is suffering, but it will remain the global currency for the foreseeable future due to a lack of alternatives.
- The Swiss franc is in demand as a safe haven and puts the Swiss National Bank in a dilemma.
