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The global economy has entered the final quarter of 2025 in a state of serenity that few observers would have predicted last Spring, in the thick of the trade conflict. Six months after Liberation Day, despite a few regional disparities, global growth data has held up: according to IMF estimates, GDP is projected to grow +2.9% in 2025 and 2026 - a very similar pace to 2024. Yet the environment is weighed down by higher tariffs, record debt levels - in the US, France and even Japan - with plans to introduce fiscal stimulus, and sticky inflation, which has remained above the Fed’s targets for over four years. With GDP growth projected at +2.2%, the economy is more vigorous in the United States than in other developed countries. Investment spending is largely driven by AI, while housing investment has remained very sluggish. Consumer spending has stayed robust, but the more modest households are showing signs of weakness. The 10% most wealthy consumers account for 50% of spending, boosted by the ‘wealth effect’ when the S&P index is at its highest. All these factors suggest that private demand is less homogeneous than it seems. Europe, on the other hand, remains stuck in a hesitant recovery under new leadership from Germany - which is striving to accelerate its fiscal response. However, implementation is taking a long time, and recovery plans have not begun to support capital expenditure at this stage. Nonetheless, Europe has clearly set a new course.

•    Sébastien Lecornu's surprise resignation caused French stocks to falter momentarily. However, the former French Prime Minister's stated desire to avoid a dissolution reassured investors.
•    The election of Sanae Takaichi as head of the PLD party led to a sharp rise in Japanese equities and a fall in the yen, due to her positions in favor of accommodative fiscal and monetary policies. 
•    The European Union wants to protect its steel industry by halving import quotas and raising levies on imports above this quota to 50%. Meanwhile, in the United States, the government shutdown persists without a clear resolution in sight.

Between climate imperatives and the quest for strategic autonomy, can energy sovereignty go hand in hand with sustainability? Éric de Tessières, Group Chief Sustainability Officer at Edmond de Rothschild, shares his vision. 

Strong conviction of Edmond de Rothschild Asset Management for over a decade: data is the quintessential strategic asset.

All that for nothing. Barely a month after his appointment and just hours after the announcement of his government's composition, Sébastien Lecornu has already resigned, becoming the only Prime Minister of the Fifth Republic whose government never saw the light of day. The extremely virulent reactions to the announcement of the government team last night, both from the opposition and within the Common Base itself, left Sébastien Lecornu with little choice, and attention is now focused on Emmanuel Macron. The latter surprised many by appointing one of his close advisers to replace François Bayrou, when many were expecting a sign of openness towards other parties, and it appears that his options are now very limited. 

•    The US shutdown may deprive the Fed of the necessary visibility on the job market ahead of its next monetary policy meeting, but further rate cuts are nevertheless expected.
•    In Europe, ECB chair Christine Lagarde thinks current benchmark rates are adequate. Her views were backed up by a slight increase in eurozone inflation.
•    Gold hit a new all-time record above $3,800/oz while oil prices retreated on expectations the October 5 OPEC+ meeting will decide to increase production. 

Edmond de Rothschild Real Estate Investment Management (“REIM”) improved the results of its funds’ scores in the Global Real Estate Sustainability Benchmark (“GRESB”) further, and several of its strategies are within the top of the industry groups.

Edmond de Rothschild Asset Management is adding a new investment expertise to its existing capability with the recruitment of an active management quant team. Headed by industry veteran Bruno Taillardat, it includes senior quant portfolio managers, Xavier Marconnet and Frédéric Girod, who will be joined by 2 quantitative portfolio managers and a quant research analyst.

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

•    Donald Trump's recent decisions have rekindled uncertainty, particularly with the increase in H-1B work visa fees to $100,000 and the announcement of a new set of tariffs.
•    Despite the economic slowdown and tame inflation, central banks in China and Switzerland chose to leave rates unchanged. 
•    Market expectations of Fed rate cuts have faded, and US and European government bonds have risen significantly.

• The Fed resumed cutting rates with a 25bp reduction. However, investors focused on the FOMC’s projections.
• This situation is good news for risk appetite and equity indices made further gains.
• Elsewhere, China released disappointing data on retails sales, industrial production and investment but the country's equity markets brushed them off.

With a 0.25% cut in its key interest rates, the US Federal Reserve (Fed) has given financial markets what they have been waiting for the past few months.