Monthly House Views - One step further - October 2025

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Markets Rising Despite Uncertainties

Equity markets in major regions have continued their upward trend over the past few weeks, reaching a new milestone—a step further—despite an increasingly tense geopolitical and political environment. Persistent tensions surrounding the Russo-Ukrainian war, political uncertainties in the United States exemplified by the ongoing government shutdown, and emerging signs of political fragility in France have not dampened market momentum.

This resilience can be attributed to a still supportive macroeconomic backdrop. The economic cycle remains favorable, underpinned by easing monetary policies and, more importantly, expansionary fiscal policies that continue to sustain economic activity. Furthermore, investment spending in artificial intelligence, particularly in the United States, is fueling a strong sectoral dynamic that is expected to continue driving momentum across global equity markets.

A More Assertive Positioning

In this context, we are revising our strategic framework by strengthening our exposure to equities. We are increasing our weighting on US equities, which serves to complement the overweight position we already hold on the european equities and we maintain a constructive view on Japan and emerging markets. This strategic move strengthens our geographic diversification and enables us to capture the specific dynamics unique to each region, while maintaining an overall exposure that remains aligned with our current macroeconomic outlook and investment scenario.

At the same time, we are reinforcing our underweight position in fixed income markets. Persistent pressures on long term interest rates will continue to be fueled by expectations of a sustained high supply of bonds, a context in which central banks are actively reducing their bond holdings, and an inflation trend that remains structurally higher than in previous cycles. This environment leads us to deepen our strong underweight to sovereign bonds. Additionally, we are adjusting our stance on well-rated corporate bonds (Investment Grade), shifting from an overweight position to a neutral one. This repositioning reflects our increased caution in the face of a more uncertain long-term interest rate environment, low risk premium and a carry that is less attractive in this environement.

Finally, we remain constructive on gold as a strategic asset and continue to maintain our hedges against a potential depreciation of the dollar.

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