•    The US Secretary of commerce said around 10 trade deals had been signed, and progress is being made in discussions with China.
•    In Europe, the NATO countries, except Spain, agreed to increase defence spending to 5% of GDP.
•    Japan's PMI composite is expanding, contrasting with Europe’s PMI, particularly in France, where the political situation is fragile following the failed pensions working party.

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

Edmond de Rothschild Real Estate Investment Management (REIM) a nommé Klaus Schmitz au poste de Chief Investment Officer Europe et Executive Chairman de Edmond de Rothschild REIM UK, à compter du 1er septembre 2025.

•    Despite escalating tensions in the Middle East and recent statements from Donald Trump, investors remain broadly confident as long as the conflict does not spread and the Strait of Hormuz remains operational.
•    The One Big Beautiful Bill Act continues to face hurdles in Congress. Meanwhile, May’s economic indicators disappointed, with a decline in industrial production and weaker retail sales.
•    Neither the Fed, the Bank of England, nor the Bank of Japan altered their monetary policy. All three adopted a cautious tone, suggesting that any potential rate cuts will depend on the evolution of trade and geopolitical tensions.

Please find below the May edition of our Outlook & Convictions, a publication from the Private Banking Investments team and experts from our Group which presents our convictions for the equity and bond markets for the second quarter of 2025.

Reduced visibility on the global economic outlook in the current environment has tended to widen performance gaps between regions, companies and asset classes. This complexity is creating interesting pockets of differentiation, notably within bond segments - including emerging corporate debt.

The project is expected to have 60 units with views over Plaza de las Glòries and the 22@ skyline.

Edmond de Rothschild Real Estate Investment Management (REIM), through one of its pan-European strategies, and UNIQ Residential have reinforced their successful relationship with a new residential development in Barcelona, specifically in the area of Plaza de las Glòrìes, in the neighbourhood of Poblenou.

This marks the latest collaboration between the two companies, following their previous development, Casa Maury Pares on Calle Mallorca, which included 22 residential properties and a 104-bed senior living development, in central Barcelona.

•    Israel conducted an attack targeting nuclear sites in Iran, leading to tensions and threats of retaliation; however, the impact on financial markets has remained limited.
•    Inflation figures in the United States are below expectations, aided by inventories that cushion the impact of import taxes.
•    Markets are responding to geopolitical risk by adopting a cautious stance on American equities and maintaining neutrality on corporate credit.

We are delighted to be recognized among the best employers in Europe according to a new ranking from the Financial Times and Statista.

•    Donald Trump ended up abandoning his threat to raise EU tariffs to 50% in June and instead returned to talks on an agreement by July 9, the same date the White House expects to see other agreements reached.
•    European inflation came in at 1.9% in May, or below the ECB’s target so the bank was able to make a fresh 25bp cut this month.
•    In Asia, activity is weakening, with Caixin manufacturing PMI, an indication of momentum among export SMEs and private sector companies,  moving into contraction territory.

The US administration is pushing the idea that the protectionist phase will end around the July 4th celebrations and that it will then focus on a programme of tax cuts and deregulation, which investors seem to believe in. The draft budget being drawn up in Congress does indeed raise hopes of a net fiscal stimulus of around 1% of GDP.

•    Moody's withdrew the US's AAA rating due to rising debt, leading to an increase in US Treasury yields.  
•    A budget compromise proposed by the Trump administration was narrowly passed in the House of Representatives, including tax cuts as well as reductions in healthcare spending and green subsidies, but it still needs Senate approval, promising lengthy discussions.
•    In Europe, the trade threat could substantially hamper growth, while in Asia, China and Japan are already facing economic challenges, prompting authorities to implement monetary easing measures.