LGT Private Banking House View

July 2026 - in a nutshell

Sometimes the most important market signal is not where the pressure is greatest, but where resilience proves strongest. As the first half of 2026 draws to a close, the global economy has absorbed the energy shock better than many feared. The US economy in particular continues to show surprising strength, with corporates increas­ingly taking over the growth baton, while Europe is held back by weaker sentiment, tighter monetary policy and shrinking purchasing power. What is emerging is not a broad global downturn, but a more uneven landscape shaped by regional divergence and a higher-for-longer rate environment. 

  • Date
  • Author Patrick Huber, Investment Solutions Europe, LGT Private Banking
  • Reading time 7 minutes

House View Juli 2026
© Shutterstock

That does not make this an easy setting for investors. Markets have already responded generously to the latest constructive headlines, while summer seasonality, slowing earnings momentum and still-elevated uncertainty argue against taking materially more risk. Against this backdrop, we maintain a balanced but constructive stance: equities remain "Neutral", fixed income "Underweight", alternative investments "Overweight", and cash "Neutral" relative to the strategic allocation. Within portfolios, we continue to favour US equities over euro-area equities, remain cautious on invest­ment-grade corporate bonds, and see gold as an important stabilising element. 

In this House View edition, we show how we assess this tension between improving market sentiment and a still demanding macro regime - from the diverging growth paths in the US and Europe to tactical positioning across equities, fixed income, currencies and precious metals.

Macroeconomic environment

The global economy has absorbed the energy price shock remarkably well, carried by a resilient US economy in which corporates have taken over the growth baton from the consumer. The eurozone, by contrast, remains stuck in the mud: weak sen­timent, rate hikes by the European Central Bank (ECB) and shrinking purchasing power are weighing on growth. For asset allocators, this means a rate environment that stays higher for longer, alongside a broadening, US-driven recovery - another chapter of US exceptionalism.

Investment strategy

The Investment Committee is maintaining a balanced yet constructive risk stance. Equities remain tactically "Neutral", fixed-income assets are "Underweight", alternative investments are "Overweight", and liquidity is "Neutral" relative to the stra­tegic allocation. In our view, markets have already largely priced in the latest positive news, whilst ongoing uncertainty, seasonal summer risks and slowing earnings momentum argue against greater risk appetite. Within the portfolio allocation, US equities continue to be favoured over eurozone equities; investment- grade corporate bonds remain "Underweight" and gold is "Overweight".

Equity strategy

Global stock markets have extended their upward trend, de­spite a brief setback in early June triggered by rising interest rates and concerns over the sustainability of AI-driven growth. Profit-taking was most visible in large-cap IT stocks. However, the pullback proved short-lived and ultimately healthy. Hopes for a deal in the Middle East conflict supported a renewed market rebound, led particularly by IT and cyclical sectors such as indus­trials, financials or materials. The euro area remains more vul­nerable to the fallout from the Middle East crisis, as growth slows, inflation remains high and the ECB is expected to raise rates again. Nevertheless, investors still expect 12% earnings per share growth this year, which may prove too optimistic given the deteriorating backdrop. We therefore maintain our "Unattractive" view. In the United States, economic activity remains solid, and ongoing AI-related investment continues to underpin strong earnings growth. We therefore retain our "Attractive" view.

Fixed-income strategy

Despite historically attractive real yields, with nominal rates at 4.5% in the US and 3.0% in Europe, caution is warranted before aggressively extending portfolio duration. The new Fed Chair, Kevin Warsh, is abandoning traditional forward guidance, heightening market uncertainty. Combined with a more aggres­sive balance sheet reduction and persistent US fiscal deficits, this structural shift is expected to drive term premia higher. Because flat yield curves offer scant compensation for this heightened capital risk at the long end, and given that bonds can tempo­rarily lose their safe-haven status during inflationary phases, as demonstrated during the Iran conflict in early March, we maintain a neutral duration stance for both US dollar and euro. The pre­ferred strategy remains anchored in the intermediate five-to-seven-year segment, securing attractive real returns without exposure to excessive long-end volatility.

Currency strategy

Our FX view remains biased toward a gradual weakening of the US dollar over the medium term, although near-term trading is likely to stay volatile due to geopolitical tensions, elevated energy prices, and intermittent risk aversion. That being said, recent US dollar resilience appears more temporary, as the main supports for broad dollar strength are expected to fade over time. As relative rate differentials gradually narrow, EUR/USD should remain on a modest upward path, with updated targets of 1.17 over six months and 1.18 over 12 months. In line with this, we are also revising our USD/CHF targets, with our six-month target at 0.76 and our 12-month target at 0.75 due to the relatively strong US economic backdrop.

Precious metals

Gold remains under near-term pressure from strong US data, elevated rates, softer technical momentum and slightly negative ETF flows, but the broader investment case stays clearly con­structive. Medium-term support from geopolitical fragmenta­tion, deglobalisation, policy uncertainty and reserve diversifica­tion remains firmly in place, while a stabilisation in US rates and the dollar should gradually improve the macro backdrop. Against this background, the new six-month gold target of USD 5000 reflects continued confidence in meaningful upside once current headwinds fade. Silver also retains a supportive medium-term backdrop thanks to strong industrial demand and a structural deficit, but given its greater cyclical sensitivity and recent vola­tility, a more neutral stance remains appropriate for now.

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