LGT Private Banking Europe House View

The Bank of Japan (BOJ) kept its range for short-term rates unchanged, but said it plans to reduce its bond purchases in the future. The cautious stance on tapering off bond purchases left traders wondering about the central bank’s commitment to further rate cuts later this year. Asian stock...

The Federal Reserve (Fed) kept interest rate unchanged as expected on Wednesday, but signalled there may be only one interest rate cut to come this year. Stock markets were rallying before the Fed announcement due to US inflation data that came in below market expectations. Treasuries and gold...

Wall Street saw new all-time highs while European and Asian stocks were under pressure on Wednesday and Thursday, respectively, as traders positioned themselves ahead of a data-heavy Wednesday. The Federal Reserve’s thinking should become clearer later in the day with US inflation figures due...

Investor morale in the eurozone continued to tick up in June, data released on Monday showed. However, the survey wasn’t sufficient to shore up weak European equity markets to start the week. In the US stock markets traded cautiously with slight gains ahead of the Federal Reserve’s (Fed)...

Markets finished last week on a sour note, dragged down by fears that the Federal Reserve (Fed) may again have a good reason to push back its first interest rate cut. Data released Friday showed that the number of jobs created in the US economy last month was much larger than economists had...

The European Central Bank (ECB) became the next of the world’s major central banks to begin lowering interest rates on Thursday but was unclear about future cuts. While European markets reacted positively, US stocks barely moved on Thursday and Asian equities were trading mixed to finish the week.

The Bank of Canada became the first Group of Seven central bank to cut its benchmark interest rate on Wednesday, just one day before the European Central Bank (ECB) is expected to do the same. Despite recent signs of economic weakness, business activity in the US was confirmed to be well in...

Inflation in Switzerland remained at its highest level of 2024, calling into question whether the Swiss National Bank (SNB) will cut interest rates later this month. The franc strengthened versus major currencies on Tuesday and the SMI closed with a slight gain, while most European equity...

Manufacturing activity appeared to be diverging around the globe with Asian and European Manufacturing Purchasing Managers’ Indices (PMI) picking up, while the US PMI fell for a second month in a row. Wall Street struggled to find a clear direction following the news while yields on US...

Inflation data out of the US was roughly in line with market expectations to finish last week, cooling fears that a resurgence of inflation could push the Federal Reserve’s (Fed) rate-cutting path back even further. On Monday, markets in Asia were trading mostly in positive territory ahead of a...

In our investment strategy, we highlight tail risks, which are distruptive events for financial markets, but also create investment opportunities and are closing the tactical "Underweight" position in US equities, as the US market remains in a difficult tug-of-war between economic momentum and...

Geopolitical tensions, robust US growth, rising oil prices and stubborn inflation are pushing equity and bond markets into negative territory for 2024. We are temporarily downgrading US equities to "Underweight" and reducing our preference for ILS investments to "Underweight".

The current economic and financial market environment is highly uncertain, with ge­opolitics, central banks and elections all making the next few months difficult to navigate. In this House View’s main article, we take a break from the day-to-day market environment and instead focus on our...

In this month's House View, we review some of our "Outlook 2024" forecasts and take a look at the latest developments in the financial markets. In our Macro article, we discuss the challenges faced by the manufacturing sector in recent years, highlight the factors behind this development and...

Major asset classes have started the new year on diverging paths without pricing in a uniform macroeconomic environment for 2024. To hedge against the risk of a hard landing, we would prefer government bonds with longer maturities. Overall, we consider the opportunities and risks to be balanced...

Global growth rolls into 2024 in a sluggish pace, leaving the burden of driving market optimism to disinflation and hopes for "sooner" and "sharper" interest rate cuts. While the probability of our current "high for longer" base case has indeed receded, we still think it will take a prolonged...

The Fed and the ECB will have to maintain their tight monetary regimes for longer. In the absence of an unexpected recessionary dynamic, decisive central bank rate cuts are therefore unlikely in the first half of 2024. Following the sharp rise in government bonds, we have decided to reduce our...

As we get closer to turning points, both on the economic growth and on the monetary policy sides, uncertainty reaches its peak. Geopolitics have come on top of this already uncertain environment, compounding a challenging combination of high bond yields and slowing economic growth. Higher...

Like the two characters waiting for Godot in Samuel Beckett’s play, many market participants have been waiting for a recession in the United States, which may never come. Many experts assumed that US economic growth would be much weaker this year than it has been so far. And most of them have...

Risks to economic growth dynamics have increased, triggering a downgrade of emerging markets against an upgrade of the more insulated US stock market, now both "Neutral". In Fixed Income we expect the interest rate environment to remain at elevated levels for longer. In our current House View...

Tariffs on Chinese goods are surging, signaling a revival of industrial protectionism. Recent US and European measures aim to shield domestic industries, hinting at prolonged trade tensions.

Since the Paris Climate Agreement, countries have failed to take the necessary measures to limit global warming to +1.5°C. Only during the economic state of emergency caused by the Covid pandemic or in the context of economic contractions, such as recently in Germany, have Western countries...

Last year, many experts predicted a recession for the US economy due to a rapid increase in the key interest rate from zero to 5%. This hike was expected to slow down investments and demand, pushing GDP growth into negative territory. Surprisingly, the economy has continued to grow and the odds...

From its inception in 2001, the BRIC acronym - representing Brazil, Russia, India, and China - showcased the rising economic and political influence of major emerging markets. Coined by Jim O’Neill, this term emphasised the potential of these nations to reshape global policy, a notion further...

After a choppy April in which capital markets became increasingly concerned about a "higher for much longer" scenario for interest rates, Friday’s "goldilocks" jobs report provided a welcome respite from rising inflation concerns. While the results were below expectations - thereby somewhat...

The dollar-yen pair was in focus at the start of the week as it experienced notable fluctuations similar to those seen in emerging market currencies. In a market with reduced activity due to the holiday season, the yen initially weakened significantly, surpassing the 160 per dollar mark and...

Ahead of the expected interest rate cuts by central banks, investors are wondering where rates may ultimately stabilise and are looking at "neutral" policy rates. We believe current rates to be restrictive, but a return to the very low rates of the past decade and a half is unlikely. This...

In our previous analysis from November 2023 titled "Beyond the Middle East conflict: gold shines in times of crisis" we highlighted a dark moment for the Middle East and suggested that it was an opportune time to invest in gold. And indeed it was. Since then, however, the dynamics have changed.

International trade is an economic pillar for European countries that has become increasingly important in recent decades. According to the World Bank, the share of trade (exports plus imports) in GDP of EU members has risen from 40% to 106% over the past 50 years, reflecting the benefits of...

One year has passed since the Credit Suisse AT1 bond default. In this article, we take a look at the lessons learned from this banking crisis and examine the importance of subordinated bank bonds for investors.