Opinion

Last week, China’s trade surplus crossed the threshold of one thousand billion dollar for the first time. In the first eleven months of 2025 alone, China exported one trillion dollar more than it imported. It is a milestone that both illustrates the export strength of Chinese industry and exposes the deep problems in China’s growth model, while further fueling calls for protectionism in the rest of the world.

Market sentiment in fixed income is turning quickly. Within just a few weeks, investors and even central bankers have rotated one hundred eighty degrees. Rising inflation risk and an even greater lack of fiscal discipline are pushing yields higher. It is a nightmare scenario for politicians and the run-up to a major confrontation.

The traditional 60/40 portfolio is dead, long live the 60/40 portfolio.

It’s December, and so the focus is shifting to 2026. As always, this comes with a wave of outlooks that are, unfortunately, often already partly outdated by the time the new year begins. Still, a dynamic is now unfolding that could lead to quite a bit of fireworks next year.

With the pullback of the dollar and the decline in (short-term) interest rates this year, emerging markets have finally come back into favor. Well below the radar, however, frontier markets have already enjoyed growing popularity among a select audience for some time.

The ECB has given stablecoins a place in its Financial Stability Review. In a report containing the term stability assessment, you would expect the focus to be mainly on risks, but even then the ECB’s approach is striking. The unapologetic desire to favor the traditional banking sector is more than telling.

For decades, we have embraced the rise of passive investing (hammock investing) as the ultimate democratization of the financial markets. The gospel of low costs, broad diversification, and market returns seemed infallible. But while passive assets under management have climbed to astronomical levels, a wave of critical academic research reveals a troubling paradox: the instrument designed to help investors may be structurally distorting the market and ultimately diminishing their wealth.

Fund passports were built on the same vision that shaped the Schengen Zone: shared trust and borderless movement. Luxembourg remains at the center of that idea.

It was a master plan. The Sustainable Finance Disclosure Regulation was supposed to send massive private capital flows into green investments, finance the Green Deal, and allow Europe to set an example for the rest of the world. Not a nonbinding directive, but an ambitious framework meant to discipline the financial sector and crush greenwashing.

Financial markets are under pressure. Not only stocks but also other asset classes are mostly moving lower. Are we dealing with unique factors, or is there a single overarching culprit?