Asset Management: European Equities Quarterly Strategy - July 2026

The recent decline in oil prices and the easing of tensions around the Strait of Hormuz have reduced the risks of a stagflationary scenario. While geopolitical uncertainties remain, the gradual normalisation of energy prices is once again supporting the global economic outlook.

In an environment marked by significant financing needs related to artificial intelligence, infrastructure investment and public spending, bond yields remain attractive. Short-duration bonds appear particularly compelling, offering greater visibility than longer maturities, which remain exposed to economic and fiscal uncertainties.

The credit market continues to benefit from solid fundamentals and attractive yields. However, historically low risk premiums are increasing the importance of issuer selection. Financial issuers remain a key driver of performance, while a more cautious approach is being adopted toward the High Yield segment.

Major technology companies continue to invest heavily in artificial intelligence infrastructure. This trend is supporting activity in the bond market, but investors are becoming increasingly demanding regarding companies' ability to convert these expenditures into sustainable and profitable growth.