Investing

The fact that some bond issuances are now oversubscribed by as much as ten times illustrates how sharply market sentiment has shifted. After more than a decade of interest rates close to zero, bonds in the eurozone are once again offering returns, around 3 to 4 percent for investment grade.

The conflict between the US and Iran is hitting the core of the Federal Reserve’s rate strategy. The one factor that was keeping rate cuts alive, falling housing costs, is now under pressure. Fed governor Stephen Miran’s bet that housing costs would keep falling fast enough to justify lower Fed rates is now being tested in the worst possible way.

The health care sector continues to lag behind the broader equity market, but according to sector analysts, investor pessimism is overdone. Innovation, improving earnings growth, and declining political risks could give the sector renewed momentum in the coming years.

European investors are approaching the current crisis using analytical frameworks from previous crises. According to chief strategist Mabrouk Cherouane of Natixis Investment Managers, this reflex leads to misinterpretations that directly affect asset allocation.

Neobrokers and digital banks are advancing into wealth management and are putting further pressure on margins in the sector. Firms must choose between scale or differentiation to avoid ending up in a so-called “Valley of Death.”

The gold price fell sharply on Monday morning, dropping nearly 10 percent in a short period and recording its biggest weekly loss since 1983. Higher inflation, rising interest rates, and a stronger dollar are putting pressure on the precious metal. Profit-taking also contributed, experts say.

When it comes to passing on assets, Luxembourg’s wealthy are focused on legacy rather than tax optimization, according to Ellen Brullard, chair of STEP Benelux and counsel at Arendt & Medernach. Anticipation is key, though it is more complex than it sounds.

Digital, operational and cyber resilience are key priorities for the year to come, says CSSF director-general Claude Marx, who points out that Europe is already being targeted by hybrid warfare attacks and expects to see more in the future.

Markets still assume that the war in the Middle East will not escalate into a prolonged conflict, and that is good news for investments in emerging markets. After the initial attacks by the US and Israel on Iran, several markets in Asia and South America took significant hits, but over the past two weeks they have shown resilience.

Investors in evergreen funds apparently did not fully grasp what they were getting into when they entrusted their capital to these “semi-liquid” vehicles investing in private markets. After Blue Owl, two large private credit funds managed by Blackstone and Blackrock were hit last week with a surge in redemption requests.