14/01/2026
Market review
Review of 2025
The year 2025 was shaped by major political, economic and monetary shifts. Donald Trump’s return to the White House led to a clear change in global trade policy. New tariffs and protectionist measures created uncertainty, while at the same time strengthening the focus on regional value creation and strategic independence.
Some industries benefited from this trend, but overall market conditions remained volatile. The US dollar weakened significantly over the year, driven by a sharp increase in government debt and cautious communication from the central bank. The Swiss franc and the euro benefited in particular. In terms of interest rates, the US took its first tentative easing steps after a long period of hesitation. In Europe and Switzerland, key interest rates were cut during the first six months of the year and have since remained unchanged. Equity markets reached new highs in 2025. The technology sector became the main growth driver, supported by strong enthusiasm for artificial intelligence and rising corporate earnings. However, valuations in this sector are very high by traditional standards. Precious metals strengthened their role as safe havens, benefiting from geopolitical tensions and expansive government debt policies. Industrial metals saw strong demand due to technological change and the energy transition.
Outlook for 2026
A clear outlook for 2026 remains challenging due to limited transparency, as recent events in Venezuela have shown. Geopolitical risks remain significant and will continue to influence markets next year. Competition for strategically important raw materials is intensifying. China, for example, has sharply restricted exports of physical silver, while demand continues to rise. Silver has the highest electrical and thermal conductivity and plays a key role in technological progress, particularly in data centres, power grids and new generations of semiconductors. As a result, higher volatility across most asset classes is expected. No recession is currently anticipated for 2026. Global economic growth is forecast at around 3%, with notable regional differences. The US is expected to grow by around 2%, while Europe and Switzerland are likely to achieve just over 1%. China is expected to grow by about 4.5%, slightly below its long-term average.
Regarding policy rates, little change is expected in Europe and Switzerland. In the US, political pressure for lower rates continues to increase. The appointment of a new Fed Chair could lead to further rate cuts. Additional bond purchases would inject liquidity into the market, potentially fuelling inflation over time. In equity markets, the key question remains whether and when the AI-related hype bubble may burst. While valuations of some companies appear extreme, the broader market looks fairly valued once these are excluded. Equity markets therefore still have upside potential, albeit less pronounced than in recent years. As long as earnings per share continue to rise, as expected, a market crash appears unlikely. On the currency side, pressure on the US dollar is likely to persist, even if short-term recoveries occur. The Swiss franc and the euro should remain stable and trade sideways. In commodities, prices for precious metals and key industrial metals such as copper are expected to rise further. Given the heightened uncertainty, short-term price pullbacks should be viewed as buying opportunities.
Equity markets
Most equity markets showed a calm performance during the reporting month. Among the best performers was the DAX, which gained around 2.7%. The main driver behind the German benchmark reaching a new high was expectations surrounding planned government investment in infrastructure and defence. The Swiss equity market (SMI) also reached a record level, rising by more than 3.3%. In Switzerland, pharmaceutical and financial stocks in particular were in strong demand and supported the market. A notable rotation into emerging markets was also observed, with these markets gaining an average of around 2.7%.
Interest rates
Rising uncertainty about the outlook for public finances led to an increase in long-term interest rates in December, in some cases by more than 0.2%. At the same time, short-term rates remained unchanged, resulting in a further steepening of the yield curve. This highlights the limited influence of central banks on interest rate developments. While short-term rates continue to be kept low by central banks, or may even fall further as expected in the US, investors are demanding increasingly higher yields on long-term government bonds. In Switzerland, it is becoming increasingly difficult to find high-quality bonds offering a positive yield.
Currencies and commodities
The US dollar weakened again and moved close to its lows seen in September. This was driven by rising government debt and the prospect of further rate cuts in the US. Copper prices continued to rise, supported by concerns about potential supply shortages. Silver saw a particularly strong increase, with prices rising by more than 25%. New export controls imposed by China and rising physical demand for this scarce metal pushed prices to unprecedented levels. Crude oil declined further due to improving production prospects. Bitcoin also weakened, falling by a further 4%.