Elections

For our last publication of the year, we explore five key themes that will dominate the European macro landscape and markets next year. While the start of 2025 will be challenging for European assets, the latter part will offer some much-needed relief.

A change in government is the likeliest outcome of the next election, but the pre-election period will be stretched to ensure that the recently announced stimulus trickles down to voters. The next Prime Minister must face President Trump on top of dealing with domestic housing challenges. Go long Canadian energy stocks versus the broad market and long AUD/CAD to take advantage of the differentials in regional geopolitics. 

Investors have given up on European assets, which now suffer exceptional discounts to US ones. However, tighter US fiscal policy, the end of Europe’s austerity and deleveraging, the LNG Tsunami about to hit European shores, and the global capex fueled by the Impossible Geopolitical Trinity mean that Europe’s time to shine will soon come back.