Perspectivas
y actualidad.

•    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.

•    OPEC+ decided to stick with current production cuts to keep oil prices around $75. 
•    As expected, the Bank of England cut its benchmark rate by 25bp amid slowing growth and inflation.
•    In China, employment and export orders resulted in indicators coming in lower than expected with services at 51 and industry at 50.1.

•    The arrival of DeepSeek, an AI aiming to be more efficient and cost-effective than ChatGPT, created a buzz among investors.
•    The reductions in public spending and the size of the federal administration planned by Donald Trump could have negative repercussions on economic activity and the labor market.
•    The ECB has lowered its key interest rates due to the slowdown in inflation and weak growth.

Here you can find the latest edition of our Outlook & Convictions, a publication by the Private Banking Investments team and experts from our Group.

•    Donald Trump reassured financial markets by delaying potentially inflationary measures, leading to a rise in equity markets.
•    Exchanges between Donald Trump and Xi Jinping helped mitigate the risks of a trade war, thus supporting a rebound in Chinese stocks.
•    Markets were bolstered by positive developments such as the ceasefire in Gaza, improved manufacturing PMI in Europe, and excellent fourth quarter figures in the US. 

•    Underlying inflation in the US has slowed more than expected.
•    In the United States, investors are now anticipating a rate cut in June rather than October.
•    The fall back in Treasury yields revived equity markets, with European indices doing particularly well.

While January is the month of wishes and good resolutions, what can we expect in terms of regulation for sustainable finance in Europe by 2025? In France, candidates for the competitive examination and students at the Institut national du service public (INSP), which has replaced the Ecole nationale d'administration (ENA) since 2022, have been working for decades on a similar question: more or less state? The right answer is a more EFFICIENT state.