Perspektiven
& Nachrichten.

Edmond de Rothschild: assets under management reach an all-time high of CHF 184 billion.

•    Volatility surged this week, resulting in a further decline in US equities. 
•    Eurozone equity markets retreated on the back of uncertainties linked to negotiations in Germany on tax reform and the easing of the debt brake.
•    Long-term European yields continued to climb amid expectations of larger budget deficits, whereas US yields remained stable.

Following the sharp rate hikes of 2022 and 2023, which boosted profitability for banks and insurers but also caused strong liquidity pressures – that led to the spectacular collapse of Credit Suisse - 2024 was a pivotal year for the subordinated financial debt market.
Stronger balance sheets and the prospect of lower interest rates have since rekindled investor interest for these bond instruments. In today’s calmer environment, positive inflows have gradually wiped the losses recorded in earlier years, paving the way for a dynamic 2025.

The first weeks of Donald Trump’s mandate are unfolding at a staggering pace and in chaotic fashion, leaving observers increasingly stunned. And yet, events are proceeding as planned according to his programme. Donald Trump is doing what he said he would.

•    Germany launches a historic investment program to boost defense and infrastructure spending.
•    D. Trump's erratic behavior, especially concerning tariffs, has created uncertainty that weighs on American morale and has led to a decline in stock markets across the Atlantic.
•    China has unveiled its economic roadmap for 2025, maintaining a growth target of 5%, which sends a message of confidence from the authorities.

There are decades when nothing happens, and there are weeks when decades happen. This is how one might sum up the general impression after the events of the past week, so profoundly have they upset geopolitical, economic and financial balances. The scene of tensions between V. Zelenskyy and D. Trump on Friday February 28 symbolized the break-up of the Atlantic alliance and the end of the peace dividend on which Western economies and financial markets have prospered in recent decades, leading Germany to overturn its entire fiscal and constitutional framework in order to gain the means to acquire strategic independence from the United States.

•    Wall Street is down close to 4% due to mounting trade uncertainties and waning optimism over the AI theme.
•    D. Trump is fuelling uncertainty and volatility on the markets with his contradictory statements on tariffs, maintaining the March 4 date for the application of tariffs on Canada and Mexico, while increasing those on China by 10%.
•    The geopolitical context is prompting European countries to increase their defense budgets, which could lead to an easing of European fiscal constraints.

•    Hopes of a resolution to the Ukrainian conflict buoyed European equities at the beginning of the week, but Donald Trump's tariff announcements and criticism of Zelensky then caused European and Asian stocks to fall.
•    Donald Trump threatened to escalate the trade war with additional taxes on cars, semiconductors and pharmaceuticals.
•    The FOMC minutes revealed concerns that Donald Trump’s trade and migration policies might fuel inflation.

Edmond de Rothschild strengthens its UK Private Banking presence, increasing its stake in Hottinger and Co Limited to 70%1 and appoints Penny Lovell as CEO Private Banking (UK). Current CEO Mark Robertson has been appointed Chairman of the Board. 

•    Persistent inflation in the US complicates the Fed's 2% target, while Trump's protectionist policies heighten trade tensions, delaying potential rate cuts.
•    In Europe, discussions surrounding the Ukrainian conflict, despite the uncertainty of outcomes, have provided short-term support to European assets.
•    Caution remains warranted for equities, and a neutral allocation is maintained for bonds, with a preference for the eurozone due to its attractive valuations and clearer ECB policy outlook.

The restrictive monetary policies introduced by central banks in 2022 considerably increased the cost of financing for companies, leading to a sharp drop in primary issues on the credit market. This contraction was particularly marked in the High Yield segment, where the volume of new issues fell by almost 80% between the peak of 2021 and 2022. The gradual recovery observed in 2023 and 2024 was mainly concentrated on refinancing transactions.

The UK and EU need 15-20 million homes, equating to c. 2000 square kilometres of mixed-use living and workspace, over the next 15 years.    

Across the EU and the UK, regenerating only a part of the 19,000 km² of underused brownfield land and 300km² of vacant or under-utilised office space can meet the region’s housing and commercial space needs.    

This regeneration requires €4 trillion of investment, creating opportunities for investors.