Outlook
& news.

Born in Paris on 30 September 1926, Edmond de Rothschild would have turned 100 this year. 

To mark the 100th anniversary of Edmond de Rothschild’s birth, the Bank’s founder, Le Figaro publishes a “Figaro Légende” issue dedicated to the House

Just a few months ago, the outlook seemed relatively clear: the slowdown in inflation was expected to allow central banks to gradually support the economic cycle through rate cuts. That outlook has now faded into the past.

In both the United States and Europe, the resilience of the economy and the return of inflationary pressures have led central banks to resume their monetary tightening policies. The Fed raised rates by 25 basis points in September, while the ECB had taken the same step a few days earlier. But beyond these decisions, it is above all the shift in the direction of monetary policy that, in our view, is of particular importance.

Growth is not just holding steady. It is robust, particularly in the United States, and the rise of artificial intelligence is driving growth across many sectors. Furthermore, inflation remains a clear concern. Central banks must remain vigilant, and markets must learn to adapt without the ongoing support of accommodative monetary policy. Against this backdrop, we look ahead to the months to come.

• Persistently high interest rates are dominating the markets: rising U.S. yields are increasing pressure on growth stocks and risky assets.

• Europe remains vulnerable due to energy risks and rising tensions over French debt, for which borrowing costs are increasing significantly.

• We are continuing to focus our portfolio allocation on short- to intermediate-term bonds and remain positive on stocks, particularly U.S. stocks, while we have begun to take some profits.

-    Edmond de Rothschild REIM launches a new value-add strategy dedicated to European light industrial and logistics assets, further strengthening its Industrial & Logistics platform. 
-    To support this growth, the firm announces the appointment of Niek van Genugten as Fund Manager.

• The “neither war, nor peace” scenario in the Middle East is fueling volatility, while tensions surrounding oil infrastructure and the Strait of Hormuz are exacerbating supply risks and global inflation.

• Faced with persistent inflation, central banks are maintaining a restrictive stance, leading to a broad-based rise in interest rates in the United States, the eurozone, and Japan.

• Despite rising interest rates and concerns surrounding certain issues related to artificial intelligence, equity markets have seen only a modest decline.

• In Europe, the ECB raised interest rates by 25 basis points and is maintaining a hawkish stance, while growth forecasts have been revised upward, except for France.

• In the United States, rising energy prices are fueling inflationary pressures, while strong employment and economic activity have driven interest rates higher.

• Geopolitical tensions remain high, amid escalation in the Middle East and the rise of far-right parties in Europe, supporting oil prices and fueling short-term volatility.

By Nicolas Bickel, Group Head of Investment Private Banking & CIO

Forty years after first establishing a presence in the Principality of Monaco, Edmond de Rothschild is moving into a new address in La Condamine

•    Kevin Warsh’s “hawkish” stance in the face of persistent inflation and US economic resilience led to a rise in interest rates, weighing on risky assets.
•    In the eurozone, August inflation rose to 3.3% as expected, largely due to energy prices, while the Chinese economy continues to suffer from sluggish domestic demand.
•    In Japan, economic indicators are surprising on the upside and comments from the Bank of Japan remain restrictive, paving the way for a likely rate hike in September.

•    The lull in tensions over Iranian oil driven by Strait of Hormuz negotiations is overshadowed by the resumption of the trade war waged by Washington against Canada and China.
•    Economic activity in the US and the Eurozone shows resilience, though tempered by stagnant US consumer spending and a contraction in French services. 
•    Pressure on the OAT-Bund spread continue to build, fuelled by the budgetary deadlock in France and investor concerns over the economic proposals of the leading presidential candidates.