At a glance
Economics
- Trump's tariff chaos weakens the US and weighs on the global economy. The deal with the EU limits the risks.
- US: Economy loses some momentum, but tariffs drive inflation. No room for the Fed to cut interest rates.
- Europe: New upswing after trade conflicts subside. ECB and German spending boosts economy.
Equities
- The momentum since mid-April will continue to be supported in the short term by a positive US reporting season.
- Lower liquidity, weaker seasonality, and increased positioning are likely to increase volatility.
- We are slightly overweight in equities overall. We view stronger setbacks as an opportunity for further purchases.
Bonds
- In addition to political pressure to cut interest rates, the Fed continues to face inflation risks from US tariffs.
- Robust fundamentals and sustained flows continue to favour credit. However, tight spreads call for caution.
- Emerging markets look fundamentally sound. Local currency bonds are likely to benefit from currency and curve effects.
Commodities
- Structural drivers for gold intact, but short-term drivers are lacking. Strong price increases are likely to dampen demand.
- OPEC+ continues to turn up the oil tap. Beyond geopolitics, there are few reasons for upward momentum.
- Copper is still benefiting from possible US tariffs. Once the tariffs come into effect, prices are likely to normalise.
Currencies
- The US Federal Reserve has little room left to further lower its key interest rate. This could strengthen the dollar.
- The US economy, on the other hand, is losing momentum, while Europe is stabilising. This is likely to weigh on the dollar.
- We initially expect the euro-dollar exchange rate to move sideways, followed by a weaker dollar in 2026.
