Global strategy 4Q 2026

The assessment of the crisis in the Persian Gulf has changed fundamentally over the past quarter. While the prospects for a resolution looked promising at the end of June, it currently appears that the status quo will remain in place for the time being. This means persistently high energy prices. At the same time, the global economy has shown resilience, not least due to significant support from AI-related investments. The prospect of persistently high energy prices, combined with continued strong economic data, was the key factor in the bond market’s reaction over the past few weeks, as it reassessed the situation. These yield levels are expected to hold through the fourth quarter. The price of oil will remain a key factor. Of course, an agreement between the US and Iran could ease tensions, but there are no signs of that happening at this time.

The ECB is proceeding cautiously, weighing the duration of high energy prices against the resilience of the economy - and thus the likelihood of broader inflationary pressures. The risks associated with the latter will increase in the coming months. We therefore expect another interest rate hike of 25 basis points (bp) in December. With regards to inflation risks, the US Federal Reserve faces greater challenges. Not only is the path to the target longer, but the investment boom also makes it more difficult to determine the right interest rate. We expect another interest rate hike of 25bp in December. Risks are generally skewed to the upside, more so for the US than for the Eurozone.

EUR corporate bond markets have, on the whole, weathered the global environment unscathed so far. The continued strong business performance of companies has certainly been a key factor. The market evidently sees good reasons to look to the future with optimism. For us, however, risks are mounting, and we therefore expect slight spread widening.

The uncertain environment - particularly rapidly rising interest rates - left its mark on the stock markets in the third quarter. Nevertheless, performance still managed to reach 3% based on the Erste Global Index. Globally, the energy sector posted the best performance. Overall, we have a positive outlook for the stock markets, albeit with significant variation by country, sector, and individual stock. There is much debate over whether valuations in the technology sector - which are driven primarily by the growth potential of AI applications - are justified. We do not see any overvaluation here and expect strong future growth in demand for AI applications.

Gold is facing strong headwinds due to high interest rates. While central bank purchases are likely to remain high, this is unlikely to be enough to cause prices to rise significantly. We expect the dollar to strengthen somewhat. The reason is that, in this highly uncertain environment, there is more potential for interest rate hikes in the US than in the Eurozone. This argument also applies to the Swiss franc, albeit with the opposite sign. With virtually no interest rate expectations for the franc, the recent slight weakening against the euro should be sustained.

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