Market Compass July 2025

In Short

A team of 13 analysts based in Paris, Cologne, Trieste, Milan and Prague runs qualitative and quantitative analysis on macroeconomic and financial issues. The team translates macro and quant views into investment ideas that feed into the investment process.

Highlights:

  • Global markets stayed resilient in Q2 despite US tariffs and Middle East tensions, thanks to positive economic surprises.
  • Growth may slow into autumn due to weaker manufacturing, tariff effects on US consumers, and softer earnings. Still, recession risks remain low.
  • We expect FX volatility and a weaker USD this summer, favoring long EM positions and credit overweights. IG credit continues to rival sovereigns as a safe haven.
  • Views on rates and equities are mixed. We see bond yields drifting lower, but keep short duration due to supply and inflation. We hold a small equity overweight, with hedging advised by late July.

 

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Market Compass July 2025
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