At a glance
Economics
- Trump's tariff chaos weakens the US and weighs on the global economy. Deals with EU and China in July = no US recession.
- US tariffs: more inflation in the US, less in Europe. No scope for Fed to cut interest rates.
- Europe: new upswing after trade conflicts subside. ECB and German additional spending support economy.
Equities
- Global share indices are close to their highs again. However, uncertainty is still present.
- An expansive fiscal policy and mid-term elections should, however, continue to support equities in the medium term.
- We are neutral on equities overall. We therefore see setbacks as an opportunity for further purchases.
Bonds
- The disinflation process in the eurozone continues. The ECB comes to the end of the rate-cutting cycle.
- Credit: Fundamental data recovered again in the last reporting season. Flow support remains intact.
- Emerging markets look fundamentally solid. Local currency bonds should benefit from currency and curve effects.
Commodities
- Gold is a valuable diversifier against rising sovereign debt and geopolitical risks. Profiteer from uncertainty.
- Oil price is burdened by production increases. Expected supply overhang limits upside potential.
- Industrial metals driven by Trump's erratic trade policy. However, structural drivers remain intact.
Currencies
- The US Federal Reserve no longer has any scope to cut the key interest rate further. This could strengthen the dollar.
- The US economy, on the other hand, will lose momentum, which will weigh on the dollar.
- Overall, we therefore expect the euro-dollar exchange rate to move sideways for the time being.
