Monthly House Views - Well established - October 2026

Resilient growth drivers

Global growth is currently based on two main drivers: investment in artificial intelligence and public support plans. These dynamics remain solid despite the shocks affecting the economy, whether it be the rise in energy prices or the persistently high level of interest rates. Paradoxically, this resilience contributes to maintaining the pressure on long-term rates. On the one hand, it feeds the risk of more persistent inflation. On the other hand, it is accompanied by massive financing needs, which intensify competition between the various economic actors to mobilise available savings. 
The rise in interest rates has been particularly pronounced in France, reflecting a deteriorating fiscal trajectory and an uncertain political environment. These tensions could persist in the long-term and a drag on growth. If these tensions were to spread more widely to other European markets, the ECB could be forced to intervene in order to limit their effects and preserve financing conditions within the euro area. 

Our preference for equities is confirmed 

The two growth drivers mentioned above should continue to support corporate activity and earnings. In this context, we maintain our overweight in equity markets, with a preference for the United States, which remains at the heart of the AI dynamic. 
We also remain constructive on European markets, although they could experience more volatility if tensions persist in France. For the same reasons, we maintain a preference for the dollar against the euro. On the other hand, we take our profits on emerging equities excluding China, whose performance has largely benefited from investors' enthusiasm for the artificial intelligence theme. 

The return of bond carry 

The resilience of growth and the scale of financing needs could maintain upward pressure on interest rates, which justifies maintaining our underweight in government bonds. However, the yields now offered by the bond markets are becoming very attractive and allow us to regain real carry potential. We have therefore chosen to overweight well-rated corporate bonds, whose risk/return ratio seems particularly attractive to us in the current environment.

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