Weekly Report 25/2026

Outlook Improving

On Sunday, the parties involved reportedly reached an agreement on a framework for a peace deal between the U.S. and Iran. The official signing ceremony is scheduled to take place this coming Friday in Switzerland. This will officially end the three-and-a-half-month war. The agreement provides for the lifting of the U.S.-imposed blockade of Iranian ports. The Strait of Hormuz will be opened to all immediately after the agreement is signed. The future of the approximately 440 kilograms of highly enriched uranium will be part of the peace agreement.

Among the recent losers is certainly the global economy, which has had to contend with a sharp rise in inflation rates due to energy prices. Some central banks have already responded with interest rate hikes. That will certainly not happen at the first meeting under new Fed Chairman Kevin Warsh. Rather, the outlook is now improving—for numerous poor countries as well as for the rich nations. Crude oil prices, which skyrocketed from $60 at the start of the year to $120, have already fallen back to $83. Most futures prices are already closer to $70. But before shipping through the Strait of Hormuz can resume smoothly, the sea mines must be cleared by Friday.

In the coming quarters, some countries will move not only to replenish their strategic oil reserves but also to significantly increase them. This additional demand is likely to keep prices above $60, but at least inflation expectations are now easing. This means that key interest rate cuts may still occur over the course of the year, as we had expected at the start of the year. Both of these factors will significantly boost consumer sentiment in many countries, as well as the business climate.

This environment makes capital cheaper, bolsters investment plans, and improves earnings prospects. Capital-intensive investments in numerous infrastructure sectors (data centers, energy, transportation) are likely to yield returns more quickly. Capital-intensive business models (e.g., Holcim, Amrize, Deutsche Telekom) will also benefit, while others will benefit indirectly from the future increase in new construction and renovation activity amid falling interest rates (e.g., Geberit). Given the new environment, cyclical stocks should generally be favored.

Bond prices will rise again. The dollar could resume its downward trend amid prospects of lower interest rates and yields. This would pave the way for a substantial rebound in the price of gold, as various central banks would no longer need to make emergency sales to defend their currencies against the dollar. Lower energy prices and lower interest rates are likely to give European stocks a boost. The EuroStoxx 50 (+2.1%) and the Swiss Market Index (+2.4%) were already among the best weekly performers globally last week. In case you’ve forgotten: From the start of the year until the outbreak of the war, European indices have outperformed U.S. stock markets by around 6%. There is therefore a good chance that this will repeat itself in the coming weeks and months.