CoreMacro

We wish all our French clients Bonne Fête Nationale! The rest of the world knows the holiday by its other name, Bastille Day. It is fitting, therefore, that we publish today GeoMacro Beta report on the coming political earthquake in France.

The UK economy is becoming increasingly fragile, but the investment outlook is improving. Slower growth and a more dovish BoE will support gilts, while UK equities will likely benefit from a favorable sector mix and a weaker pound.

Special Report

Corporate health remains supportive of tight credit spreads in both the US and Europe, but a growing divide is emerging beneath the surface. Investment-grade issuers continue to strengthen, while lower-rated borrowers face mounting pressures. Credit markets are pricing resilience, leaving investors vulnerable should corporate fundamentals begin to deteriorate.

Today’s ECB rate hike is not the beginning of a hiking cycle. Growth concerns will soon move to the forefront of ECB policy decisions, preventing further tightening.

Europe is sliding from stagflation toward recession as prolonged disruptions in the Strait of Hormuz weaken growth, labor markets, and supply chains while keeping inflation elevated. Even if a US-Iran deal is reached, limited fiscal support and rising food inflation leave the Euro Area increasingly vulnerable to a deeper economic downturn.

The longer the Strait of Hormuz remains closed, the more likely the Eurozone will experience an economic recession, as higher energy prices, supply chain disruptions, and weaker global demand slowly grind the European economy to a halt. The relief rally is running out of time. Investors should add exposure to the best-performing sectors following past oil supply shocks: Energy, pharma, and utilities.

In the US, the oil shock’s impact is more inflationary than recessionary but in the other economies, like the UK, the impact is both inflationary and recessionary. This creates relative value opportunities for bond investors. Plus, we reiterate short AUD/JPY as a trade.

Special Report

Europe has been too ambitious with Renewables. Oversupply, volatility, and rising contract risk are compressing revenues and returns. The space is now crowded yet markets have not fully repriced the risk. New opportunities are emerging: Power Storage and Data Centers have upside.

Special Report

Uranium’s bull market remains intact, supported by structural supply deficits, rising nuclear demand, and tightening fuel-cycle constraints. The Iran war reinforces energy security concerns while disrupting key inputs like sulfur, exacerbating supply risks. With contracting strengthening and policy support accelerating, uranium is re-emerging as a strategic commodity with durable upside.

War momentum and escalating rhetoric around the Strait of Hormuz have pushed Brent above $100 and raised the risk of a broader supply shock. While parallels with 2022 offer a roadmap, today’s shock is likely shorter but more globally disruptive. Markets are repricing monetary tightening risks, though we see rate hikes as a mistake absent second-round inflation. Beyond oil, sulfur, helium, and fertilizer disruptions threaten food prices and the AI supply chain. Position defensively.