Across the Pond: The Brighter Outlook for Europe in 2026
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The U.S. has dominated headlines in 2025, with investors focused on AI breakthroughs, policy shifts from the Trump administration, and the outlook for Fed rates. Yet, so far this year, European equities have outperformed their U.S. counterparts in U.S. dollar terms - and the outl
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4 itemsSignal over Noise with Ulrike Hoffmann-Burchardi
The desk interprets recent comments from Ulrike Hoffmann-Burchardi at UBS regarding the contrasting technological and geopolitical landscapes between the U.S. and Europe as a crucial turning point for investors. Per the full note, while Europe experiences a temporary boost from fiscal stimulus in 2026, its long-term growth depends on reclaiming its competitive edge in technological innovation where the U.S. currently leads with a 64% share of global startup funding. This narrative indicates a potential U.S. dollar strength relative to the Euro if the divergence in growth prospects continues to widen.
House Call: Talking Equity Markets with UBS Asset Management
The desk posits that the bullish momentum in U.S. equities, as outlined by Jeremy Zirin of UBS Asset Management, is set to influence broader market sentiment, particularly in the FX space. With U.S. stocks achieving nearly 18% return in 2025 and driven largely by sectors leveraging AI, there is potential for a stabilizing dollar given the strong performance outlook. Per the full note [source], the continued leadership from technology and communication sectors could foster a comparable strength in the dollar versus EUR, which has been under pressure amid the ECB's cautious approach. This bullish outlook aligns with our internal consensus target for USD/EUR to trend towards 1.075 in the coming months.