Global Strategy 3Q 2025
Global Strategy , 25. Juni
The second quarter ended as it had begun - with a high level of uncertainty. While it was the announcement of massive US tariffs at the beginning of the quarter, it was the escalation of the conflict in the Middle East at the end. Although the situation currently looks to have calmed down, the outlook remains fraught with risks. A far-reaching decision on US tariffs is planned for July 9. However, the economy is proving to be surprisingly resilient, which is also reflected in persistently good corporate data. Our outlook for the financial markets therefore remains largely positive.
Economy: The economic data for the eurozone in the first and second quarters was dominated by front loaded exports to the USA and high investments by Irish-based global corporations. The true picture of the economy will only emerge in the third quarter, for which we expect moderate growth. In the USA, it is also difficult at present to determine the strength of the economy. We expect a slowdown. Inflation has fallen significantly in both economic areas and reaching the 2% target of the respective central banks is within reach. However, the US government's future trade policy in particular poses a considerable for growth and inflation.
Bonds: German government bonds will remain caught between the expected economic recovery, due to higher public investment spending, and a looming economic slowdown in the USA. Together with unchanged key interest rates, this suggests that yields will remain largely unchanged. In the USA, on the other hand, a weaker economy and further interest rate cuts by the US Fed should lead to a moderate fall in yields on US government bonds. The risk here is also US policy, which could trigger a further loss of confidence in the USA as an investment location, which would cause US yields to rise.
Currencies: The improved outlook for the eurozone and erratic US policy led to a significant weakening of the dollar against the euro in the second quarter. We continue to see a higher potential for negative surprises in the US and expect a further moderate weakening of the dollar. The euro should gain slightly against the Swiss franc due to a revival of the economy. We anticipate further gains for gold due to continued demand from central banks and investors.
Equities: The most recent quarterly results of listed companies in both the USA and Europe surprised largely to the upside. The outlook for companies' future business development remains positive and generally points to an acceleration in earnings growth next year. The tech sector will make a significant contribution to this and therefore remains one of our favorites. We also expect positive developments in the financial sector, among others.
Economy: The economic data for the eurozone in the first and second quarters was dominated by front loaded exports to the USA and high investments by Irish-based global corporations. The true picture of the economy will only emerge in the third quarter, for which we expect moderate growth. In the USA, it is also difficult at present to determine the strength of the economy. We expect a slowdown. Inflation has fallen significantly in both economic areas and reaching the 2% target of the respective central banks is within reach. However, the US government's future trade policy in particular poses a considerable for growth and inflation.
Bonds: German government bonds will remain caught between the expected economic recovery, due to higher public investment spending, and a looming economic slowdown in the USA. Together with unchanged key interest rates, this suggests that yields will remain largely unchanged. In the USA, on the other hand, a weaker economy and further interest rate cuts by the US Fed should lead to a moderate fall in yields on US government bonds. The risk here is also US policy, which could trigger a further loss of confidence in the USA as an investment location, which would cause US yields to rise.
Currencies: The improved outlook for the eurozone and erratic US policy led to a significant weakening of the dollar against the euro in the second quarter. We continue to see a higher potential for negative surprises in the US and expect a further moderate weakening of the dollar. The euro should gain slightly against the Swiss franc due to a revival of the economy. We anticipate further gains for gold due to continued demand from central banks and investors.
Equities: The most recent quarterly results of listed companies in both the USA and Europe surprised largely to the upside. The outlook for companies' future business development remains positive and generally points to an acceleration in earnings growth next year. The tech sector will make a significant contribution to this and therefore remains one of our favorites. We also expect positive developments in the financial sector, among others.