Situation Assessment & Outlook for the next six months
Our short-term assessment of the development of the financial markets and asset classes.
Review - 2nd quarter 2026
Based on global leading economic indicators, the world economy continued to show signs of robust shape. The frequently voiced concern that technological change would lead to massive job losses has not been borne out so far. Supported by demographic trends and new areas of professional activity, unemployment rates remained at historically low levels. The start of peace talks between Iran and the US led to a significant fall in crude oil and gas prices and, consequently, to a noticeable easing of inflationary pressure. Under its new chairman, Kevin Warsh, the US Federal Reserve (Fed) left key interest rates unchanged at 3.50% to 3.75%. The Swiss National Bank (SNB) also maintained its zero interest rate policy. In contrast, the European Central Bank (ECB) responded to persistently high consumer prices by raising its key interest rate by 0.25 percentage points to 2.25 per cent.
The financial markets presented a generally positive picture in the second quarter of 2026. The market for euro-denominated bonds more than made up for its price losses in the first quarter, and global equity markets performed exceptionally strongly. Towards the end of the quarter, a classic sector rotation became apparent: investors reduced their exposure to cyclical sectors and increasingly shifted their investments into defensive sectors such as healthcare and consumer staples. Following an exceptionally successful 2025 and a peak at the end of January 2026, gold continued to consolidate, falling by well over 16% throughout the past quarter. The prospect of rising US key interest rates in the second half of 2026 strengthened the US dollar against the euro and the Swiss franc.
Current situation assessment & outlook for the next six months
As anticipated by Colin&Cie, the Iran conflict – like other geopolitical events in the past – has had only a short-term negative impact on the financial markets. Although peace talks have now begun and efforts are underway to find a lasting solution, the situation remains tense. The possibility of the negotiations breaking down cannot be ruled out. Expansionary fiscal policy and the persistently low interest rates in many economies should continue to underpin global economic growth. However, should consumer price inflation, which has increased in the wake of the escalation in Iran, fail to ease as expected, central banks in the United States and Europe could be forced to raise key interest rates. Rising interest rates generally weigh on bonds, as the prices of existing bonds fall.
The key factor will be whether energy prices stabilise, as they will largely determine the future course of inflation. At present, the price of crude oil (Brent) is expected to stabilise at around 70 US dollars per barrel. This corresponds to a slightly higher price level compared with mid-February, shortly before the outbreak of the Iran conflict, as demand remains elevated due to restocking. The stock markets should continue to benefit from the generally favourable economic climate and the resulting robust corporate profits. However, short-term fluctuations are possible, as geopolitical developments and inflation data continue to influence market sentiment.
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.
