Horizon Handout February 2025

Economics

• Initially weak growth in the eurozone, German reforms could contribute to more momentum from spring onwards.
• The US economy remains robust. Trump's programme gives the economy a short-term boost with long-term risks.
• The UK is hoping to emerge from stagnation in spring.

Equities

• Strong start to the year for equity markets. Continued outperformance in Europe requires structural improvements.
• Global liquidity, rate cuts and growth support equities. Market breadth should increase.
• US policy remains a source of uncertainty. Counter-cyclical measures and balanced positioning required.

Bonds

• As expected, the Fed is taking a break, while the ECB continues to cut its key interest rate.
• The risk of valuation corrections has recently increased in both the high-yield and IG segments.
• The trade and customs policy of the new US President Donald Trump continues to cause tensions in the emerging markets.

Alternative investments / commodities

• Uncertainty about the crude oil price remains due to a forecast supply overhang.
• Gold seems to be immune to bad news. However, high futures positioning is vulnerable to setbacks.
• Ambiguous data from China cause industrial metals to fluctuate. However, physical supply remains tight and demand high.

Currencies

• The US dollar briefly flirted with parity against the euro.
• The tailwind for the greenback has recently eased, the euro could gain further over the course of the year.
• Rising interest rates in Japan support the yen.