Moving Markets

With the UK preparing for a new phase of political leadership under the Labour Party's Andy Burnham, investors are watching closely for signals that could impact sterling and UK bonds. Despite headline changes at the top, market volatility has remained subdued. What’s behind the calm, and what should investors expect next?
In this episode of Julius Baer’s Moving Markets: The View Beyond, Ayako Lehmann is joined by David Meier, Chief Currency Strategist, and Afonso Borges, Fixed Income Research Analyst, to examine the implications of the UK’s political reset for currency and fixed income markets. The discussion covers why sterling has remained resilient despite leadership changes, the lessons learned from past fiscal policy missteps, and the structural factors shaping the UK’s economic outlook. The conversation also explores the drivers of UK gilt yields, the impact of oil prices and inflation expectations, and the outlook for Bank of England policy. Finally, the team discusses positioning in UK bonds, the relative appeal of UK assets, and the case for hedging FX risk.

(00:00) - Introduction

(01:17) - Why has sterling remained calm amid political change?

(03:19) - Lessons from past fiscal episodes and the risk of a repeat

(04:20) - The new prime minister’s room for manoeuvre

(06:19) - Structural constraints and economic outlook for the UK

(07:25) - Oil prices, inflation pass-through, and UK gilt yields

(10:14) - Positioning on the UK yield curve

(10:56) - Bank of England policy outlook

(13:22) - Implications for sterling versus major currencies

(16:35) - Key factors for UK bond investors

(20:30) - FX hedging and international investor considerations

(21:32) - UK equities in the current environment

(23:01) - Closing remarks and legal information

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As peace talks could be back on the table in the Middle East, global equity markets breathed a sigh of relief and investors snapped up tech stocks around the world. The Kospi retreated from bear market territory rallying more than 5%. And Japanese bonds, equities and the currency were boosted by comments from the country’s finance minister that the government wants to encourage its pension funds to invest more in domestic assets. Despite geopolitical risks having returned as a key driver of bond-market performance, Dario Messi, Head of Fixed Income Research, explains why investors should avoid this temporary market noise, and if necessary, take advantage of higher yield levels – especially in Europe – to ensure appropriate duration exposure within their portfolios.

(00:00) - Introduction: Helen Freer, Product & Investment Content

(00:25) - Markets wrap-up: Bernadette Anderko, Product & Investment Content

(05:18) - Bond market update: Dario Messi, Head of Fixed Income Research

(09:40) - Closing remarks: Helen Freer, Product & Investment Content

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Market sentiment has weakened as renewed tensions in the Middle East have pushed oil prices and government bond yields higher. Spain’s benchmark equity index has come under additional pressure following President Trump’s threat to impose trade restrictions on the country. In this episode, Norbert Rücker, Head of Macro and Next Generation Research, joins us to discuss the latest surge in oil prices, the broader implications for inflation and whether the move reflects a lasting shift in the outlook or merely a temporary disruption.

(00:00) - Introduction: Bernadette Anderko, Product & Investment Content

(00:25) - Markets wrap-up: Roman Canziani, Head of Product & Investment Content

(05:43) - Oil rallies on Trump declaration: Norbert Rücker, Head of Macro & Next Generation Research

(10:44) - Closing remarks: Bernadette Anderko, Product & Investment Content

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Sharp semiconductor losses amid AI chip rivalry fears contrast with resilient broader markets, while escalating US-Iran tensions send oil surging 5%, highlighting growing jitters over geopolitics and inflation just as central banks signal rates may stay higher for longer. Investors will now focus on the upcoming earnings season for more guidance. Matthieu Racheter, Head of Equity Strategy, shares his insights on what to expect. And Tim Gagie, Head of PB Sales (Geneva) FX & PM, talks about the British pound amid the political uncertainty in Britain and key levels to watch for gold.

(00:00) - Introduction: Roman Canziani, Head of Product & Investment Content

(00:41) - Markets wrap-up: Jan Bopp, Product & Investment Content

(06:36) - Earnings preview: Mathieu Racheter, Head of Equity Strategy Research

(10:25) - FX update: Tim Gagie, Head PB Sales (Geneva) – FX and PM

(14:37) - Closing remarks: Roman Canziani, Head of Product & Investment Content

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US equities started the week strongly as AI-related stocks rebounded yesterday and the Dow Jones closed above 53,000 for the first time. Broadcom gained after extending its partnership with Apple, while Microsoft slipped following plans to cut jobs as it reallocates resources towards AI infrastructure. In Europe, most indices were down, although Germany’s DAX bucked the trend and reached a new record high, and EasyJet surged on takeover news. Asian markets today came under pressure, led by South Korea’s Kospi, where a trading halt was triggered when the index fell more than 8%. Carsten Menke, Head of Next Generation Research, joins the show to talk about El Niño and its potential economic consequences.

(00:00) - Introduction: Bernadette Anderko, Product & Investment Content

(00:28) - Markets wrap-up: Helen Freer, Product & Investment Content

(06:11) - The El Niño effects heading our way: Carsten Menke, Head of Next Generation Research

(09:56) - Closing remarks: Bernadette Anderko, Product & Investment Content

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