Weekly Update - In 2026, economic sovereignty issues will shape the markets

The year 2025 was paradoxical: rising political and geopolitical uncertainties, yet remarkable resilience in economies and financial markets. Early signs from January confirm that 2026 will be marked by intense developments, with economic sovereignty issues dominating the main financial markets.

1. Major economies open the fiscal floodgates
2026 is shaping up to be a year of massive fiscal support. Germany is launching a stimulus plan focused on industrial sovereignty and defense. The European Union continues its investments through the Next Generation EU and Rearm Europe plans. The United States is extending tax cuts and increasing public spending, further widening its public deficit. Japan and China are also implementing targeted support plans. These policies are expected to support global growth and potentially boost major equity markets, especially in infrastructure and defense sectors. The complex geopolitical context and major political milestones (end of Powell’s term, U.S. and German elections) could add volatility.

2. The race for Artificial Intelligence 
AI will remain a key growth driver, especially in the U.S. and Asian economies involved in the production chain, with over $400 billion in investments planned by major tech companies. Europe is trying to catch up through infrastructure projects. U.S. and Asian equity markets should continue to benefit from this momentum, but performance disparities among AI sector companies will widen, notably depending on their debt levels.

3. International trade resists tensions
Despite a resurgence of protectionism, global trade is progressing, driven by AI growth and semiconductor demand. Emerging markets, notably in Asia and commodity producers, show strong performance. Europe, however, suffers from a contraction in exports, penalized by its absence in the AI value chain and restrictive U.S. measures. The EU may adopt trade restrictions to strengthen its sovereignty.

4. Changes in currency and payments
The positioning of major currencies is challenged both by the geopolitical context and technological changes. The rise of stablecoins, mainly dollar-based, helps finance U.S. debt but raises risks of digital dollarization, financial instability, and monetary system disruption. In response to these threats to monetary sovereignty, central banks are accelerating the development of public digital currencies (CBDCs) to maintain control over financial flows and payment stability.

5. France: instability not conducive despite strengths
Political instability since 2024 weighs on growth and limits France’s ability to address economic sovereignty challenges. The public deficit remains high, interest rates are under pressure, and the equity market underperforms. Nevertheless, France benefits from a favorable European environment, a competitive defense industry, and decarbonized electricity, an advantage for green industrialization and data centers. A major crisis scenario remains unlikely due to investor appetite for French debt and the ECB’s intervention capacity.
 

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