European equities have rebounded since our last Equity Committee meeting on 10 March, thanks to a significant easing of geopolitical tensions, driven by a temporary ceasefire between the US and Iran in early April.

Financial markets have entered a regime where escalation and de-escalation are no longer discrete events, but part of a repeating pattern. The war in Iran has not evolved linearly; it has oscillated, with periods of intensity followed by temporary pauses, each feeding renewed uncertainty rather than resolution.

March was dominated by the Middle East shock, as the escalation of the US-Iran conflict and disruption around the Strait of Hormuz pushed energy prices sharply higher and reignited inflation concerns globally.

We maintain a neutral stance on US duration. Uncertainty around the conflict, the path of oil prices, and the Fed reaction function still argue against taking a strong strategic view on nominal Treasuries.

Market, regulatory, and geopolitical trends are influencing the way investors are engaging with investee companies. In 2025, shareholders sponsored fewer resolutions, while large institutions withdrew from some large collaborative initiatives, causing them to be restructured or cancelled.

Back to fundamentals

In an environment marked by shifting correlations, macro uncertainty and episodic volatility, traditional portfolio constructions are facing increasing limitations. The diversification benefits of equities and bonds have become less reliable, prompting investors to seek new sources of return.

Since the end of February, global credit markets have been driven by the escalation of the US-Iran conflict and rising tensions across the Middle East. While geopolitical risks are not new, the intensity and speed of this episode took markets by surprise.