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Resilient global growth masks an increasingly challenging environment shaped by persistent inflation, high interest rates, geopolitical tensions, fiscal pressures and strong AI investment.

Following a first half marked by renewed geopolitical risk, fixed income markets faced persistent energy, inflation and fiscal pressures. While central banks maintained a hawkish stance, higher yields restored value across bond markets, while growing credit dispersion reinforced the importance of issuer selection.

The third quarter of 2026 ultimately confirmed two trends that may appear contradictory. On the one hand, the European economy continued to prove more resilient than expected, with a gradual improvement in activity indicators, the initial materialisation of German fiscal support measures, and strengthening earnings momentum.

Investments linked to artificial intelligence continue to support global growth, but they are also contributing to a sustained rise in long-term interest rates. At the same time, geopolitical tensions and uncertainty surrounding the Federal Reserve’s communication are maintaining a more fragile economic environment.

Investments linked to artificial intelligence continue to support global growth, but they are also contributing to a sustained rise in long-term interest rates. At the same time, geopolitical tensions and uncertainty surrounding the Federal Reserve’s communication are maintaining a more fragile economic environment.

Investments linked to artificial intelligence continue to support global growth, but they are also contributing to a sustained rise in long-term interest rates. At the same time, geopolitical tensions and uncertainty surrounding the Federal Reserve’s communication are maintaining a more fragile economic environment.

After a strong start to the year for the fixed income markets, the environment has gradually become more complex. Yet the credit market initially benefited from a favorable environment: resilient global growth, gradual disinflation, and central banks perceived as likely to ease monetary policy.

Against a backdrop of resilience of the global economy and the rise of artificial intelligence, Didier Bouvignies reflects on the key drivers behind the first-half market rally and shares his outlook for the second half.