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Global Financial Markets

Inflation, stagflation or deflation

Thursday, 02 July 2026, written by Edward Markus

It is striking how differently economists and analysts view the implications of the Iran deal and the rise of AI for economic growth and inflation. If we look at the charts for gold, the yield curve, the S&P 500 and the dollar index, the markets’ expectations are quite clear. In this report, we examine what these market expectations are, how we view them, what role China’s rise plays in this context, and what this means for key interest rates and exchange rates.
 

This report is published: Bi-weekly

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Previous reports

Oil prices fall, but the risk of inflation remains

Thursday, 18 June 2026

Following the deal between Iran and the US, energy prices have fallen and a major risk factor is now behind investors. Does this clear the way for falling inflation and further rising share prices, or will the Fed put new obstacles in the way in the form of higher interest rates?

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Is AI a bubble?

Thursday, 04 June 2026

Expectations regarding the positive impact of AI on the economy and profits are running high. Rightly so, but the share prices of AI-related companies have risen so sharply that the risk of disappointment regarding the profitability of AI investments has increased significantly. For the time being, we believe that developments in this area and what happens in the Strait of Hormuz will be decisive factors for the financial markets.

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Markets may be at a major turning point

Thursday, 21 May 2026

Unfortunately, there doesn’t ring a bell at the top. However, a number of developments are currently underway that suggest a significant stock market peak is imminent or has already been reached. If we are proved right and stock prices fall in the coming months, this will, via the wealth effect, also affect economic growth and, consequently, interest rates and exchange rates.

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Eddy's Weekly Market Insight

Friday, 10 July 2026

Eddy's Weekly Market Insight

What's Driving the Markets? President Trump's approval ratings are hovering near historic lows. This appears to have prompted a more confrontational stance on several geopolitical issues. Trump has declared the ceasefire agreement with Iran void. At the same time, tensions within NATO are becoming increasingly visible. Trump has expressed strong dissatisfaction with Europe's failure to support the United States during the conflict in the Middle East and with Spain's unwillingness to increase defence spending. In addition, the potential annexation of Greenland by the United States has once again returned to the political agenda. With respect to developments in the Middle East, our base case is...
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— Edward Markus, Founder & Chief Economist