Situation Assessment & Outlook for the next six months
Our short-term assessment of the development of the financial markets and asset classes.
Review - 3rd quarter 2026
Geopolitical developments dominated market sentiment during the third quarter, driven primarily by the renewed escalation of tensions in the Middle East. Concerns about oil supply pushed the price of Brent crude oil from around USD 70 to temporarily more than USD 105 per barrel. As a result, inflation expectations and long-term bond yields increased. In an effort to curb persistent inflationary pressures and underscore their determination to combat inflation, the European Central Bank (ECB) and the U.S. Federal Reserve (Fed) each raised their key interest rates by 0.25 percentage points in September. By contrast, the Swiss National Bank (SNB) left its policy rate unchanged.
Despite geopolitical tensions, equity markets demonstrated remarkable resilience. They were supported primarily by the improving economic outlook. As an example, Germany's leading economic research institutes raised their 2026 growth forecast from 0.6% to 1.3%. The prospect of stronger economic growth helped offset the adverse effects of higher energy prices and rising capital market interest rates. In addition, the continued strong earnings growth of many companies reinforced their resilience to increasing financing costs.
After its notable decline in the second quarter, the gold price recovered and returned to a positive quarterly performance, although year-to-date returns remained negative. The Swiss franc weakened against both the euro and the U.S. dollar during the third quarter. This was primarily driven by the widening interest rate differential relative to both currency areas, as the ECB and the Fed raised their policy rates while the SNB left its key interest rate unchanged.
Current situation assessment & outlook for the next six months
Supported by leading economic indicators in the United States, Germany and Switzerland, the global economy continues to demonstrate resilience. However, China remains notably behind many other economies due to its ongoing property market crisis and weak domestic demand. Given China’s role as the world’s second-largest economy and a key contributor to global growth, its persistent weakness may represent an early signal that global economic momentum could begin to moderate in 2027.
Inflation expectations remain elevated amid geopolitical uncertainties and higher oil and energy prices. As a result, further policy rate increases by the ECB and the Fed are expected through March 2027, while the Swiss National Bank (SNB) is anticipated to implement its first monetary policy tightening during this period. Crude oil futures markets continue to imply a marked decline in oil prices over the next six months, thereby signalling a potential easing of tensions in the Middle East. Against this backdrop, the outlook for equity markets remains fundamentally supportive. Additional tailwinds include the dissipation of short-term market overheating following the consolidation in the third quarter, strong corporate earnings growth, and attractive valuations in emerging markets.
Gold continues to draw support from ongoing geopolitical risks. At the same time, the prospect of further interest rate hikes by central banks represent a headwind, as the precious metal does not generate any current income. Consequently, the consolidation phase may not yet be fully complete. The further development of inflation and interest rates in the context of geopolitical events remains a key factor and warrants close monitoring.
Disclaimer - legal notice
This publication was produced by the Investment Office of the Colin&Cie Group. The information and opinions contained in this document are based on sources we believe to be reliable. However, we cannot guarantee the reliability, completeness or correctness of these sources. All information and quoted rates are only up-to-date at the time of this publication and are subject to change at any time without notice. The content is based on numerous assumptions made by the Colin & Cie Group. It should be noted that different assumptions can lead to materially different results. The forecasts and assessments are only current at the time this publication is prepared and can change at any time without prior notice. Past performance of an investment is not a guarantee of future results. Certain investments can experience sudden and substantial losses in value. This information and views do not constitute a solicitation, offer or recommendation to buy or sell investment instruments or to carry out any other transactions. We recommend interested investors to consult their personal advisor before making decisions on the basis of this document so that personal investment goals, financial situation, individual needs and risk profile as well as further information can be duly taken into account as part of a comprehensive consultation. The information contained in this publication is marketing material that is distributed for advertising purposes only.
