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The first half was full of surprises for investors. Equity market returns were much better than expected. Most people expected a recession but it failed to have much impact and the US economy and its financial sector proved particularly resilient to a banking crisis which could have been much more serious.

With the July 4 holiday in the US and the second quarter earnings season imminent, it could have been a quiet week. Instead, volatility resurfaced on both equity and bond markets as advanced indicators unsettled investors.

The first half was full of surprises for investors. Equity market returns were much better than expected.

By Sébastien Cavernes, CIO Edmond de Rothschild Gestion (Monaco)

The rise in interest rates is above all a godsend for European banks. Since the financial crisis they have battled to avoid destroying value, in other words to make sure that their profits exceed the cost of capital. This problem was instantly resolved by the return of positive rates.

2022 has seen record deployment of €1.5bn across 30 deals. Energy transition has been represented more than ever. Shirley Chojnacki, Investment Director - Deputy ESG Officer, gives some examples of these deals and why BRIDGE invested in these projects.

At the ECB forum in Portugal, ECB chair Christine Lagarde once again urged caution over the chances of core inflation falling rapidly.

Jean-Philippe Desmartin, Head of Responsible Investment, details four major challenges for the next few months: regulation, transparency, methods and data, biodiversity.

With its culture of entrepreneurship and innovation, Edmond de Rothschild Asset Management finances the real economy through its investments, guiding and supporting entrepreneurs at key points in their operations and over the long term, whether their company is listed or not.

Central banks have been in the spotlight over the last two weeks. When Fed chair Jerome Powell appeared before the House of Representatives this week, he minimised the idea of a pause and instead promised more hikes to come if the economy failed to slow down faster.

Europe is accelerating its transition to a low-carbon economy. In 2021, the European Union revised the emission-reduction targets of its climate plan from 40% to 55% of 1990 levels, to be achieved by the end of the decade.

Equity markets are now simply ignoring the Fed and the ECB. Indices have kept on rising and are now above levels seen in March 2022 when the Fed launched its fastest tightening cycle in 40 years.