Situation Assessment & Outlook for the next six months
Our short-term assessment of the development of the financial markets and asset classes.
Review - 1st quarter 2026
Despite geopolitical tensions and increasing trade conflicts, the global economy recorded solid growth in 2025, supported by lower key interest rates and expansionary fiscal policy measures. The downward trend in inflation continued: in Europe, price increases approached the central banks' target of 2% p.a. After several interest rate cuts in the first half of 2025, the European Central Bank and the Swiss National Bank reached the end of their interest rate reduction cycle. Despite higher inflation figures, the US Federal Reserve made three interest rate cuts from autumn onwards to stimulate the domestic economy. Long-term interest rates fell slightly to around 4% p.a. in the US, while remaining stable at around 2.5% p.a. in the eurozone. In Switzerland, they hovered just above 0% p.a.
The stock markets performed very well in 2025, with double-digit gains, with emerging markets significantly outperforming Europe and the US after several years of weakness. Gold remained in demand as a safe haven in the face of geopolitical uncertainties and economic risks, reaching all-time highs. The foreign exchange market was characterised by a significant weakness of the US Dollar. Expected interest rate cuts by the Fed, uncertainties about future US government spending and a loss of confidence in the US following Liberation Day in early April 2025 led to the US Dollar losing around 13% of its value against the Euro and the Swiss Franc – the sharpest decline since 2017.
Current situation assessment & outlook for the next six months
It is not yet possible to make a definitive assessment of the impact of the war in Iran on the global economy. However, there are many indications that the robust growth seen so far is likely to lose momentum. As a rule of thumb, a rise in the oil price of USD 10 per barrel dampens global economic growth by around 0.1 percentage points. Nevertheless, a recession is not expected, as labour markets – particularly in Europe – remain stable or are showing slight improvement. Furthermore, current futures prices imply a lower oil price in six months’ time. Consumer price inflation remains at its lowest level in recent years, although a renewed rise in inflation is expected. With their current monetary policy, central banks are having a stabilising effect on the economic environment. Moreover, the only slightly increased risk premiums on bonds suggest that the current uncertainty is temporary.
Corporate earnings growth continues to underpin the equity markets, buoyed by an overall solid economic situation. Despite the slowing momentum, most indices – except for Germany and the US – remain at (Switzerland, Europe) or above (the UK, emerging markets) the average prices of the last 200 days. Given the ongoing geopolitical conflicts, the level of risk remains elevated. However, the leading indicators relevant to the current market situation do not currently suggest any need for adjustment to our strategies, so we are maintaining our neutral positioning and broadly diversified selection of securities across the asset classes of equities, bonds, and alternative investments.
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.
