ODDO BHF Experts' Insights
"Between economic resilience and market volatility"
Bruno Cavalier looks back on half a year marked by surprisingly global economic resilience, despite initial fears of recession and market crash at the beginning of the year. While markets remain fragile, the AI boom and trade de-escalation have supported activity.
In this volatile environment, Laurent Denize highlights the importance of flexible global asset allocation, which is now more accessible thanks to ETFs. This approach allows opportunities to be seized as they arise, while controlling risk.
Finally, ODDO BHF is innovating with the launch of EUROD, its first euro-backed stablecoin, which combines banking security and blockchain technology — representing a new step towards European digital finance.
Navigating volatile markets: the case for global flexible asset allocation through ETFs
Laurent Denize - Global Co-CIO ODDO BHF
In today’s financial markets, investors face a paradox:
On one hand, the investment universe has seldom been richer, with opportunities arising across various regions, sectors and asset classes, while access to numerous foreign markets keep getting easier.
On the other hand, after more than a decade of lax financial, monetary and fiscal conditions, economic cycles have become increasingly asynchronous as previous global imbalances are being challenged by geopolitical shifts, fueling market volatility.
Volatility, or more generally investors’ uncertainties, is also fundamentally supported by accelerating technological changes increasingly challenging long-established business models, and consequentially impacting valuations.
Global economy – Between risks and resilience
Bruno Cavalier - Chief Economist
It is still a little early to take stock of 2025, but if we compare current economic conditions with what was anticipated six months ago, it is clear that the worst has been avoided. In terms of the economic cycle, the worst-case scenario is a recession. In terms of the markets, it is a crash. After the announcement of ‘reciprocal tariffs’ in early April, these risks were very much present. At one point, US stock market indices hit the critical threshold of a 20% decline from peak to trough. As the shock could lead to stagflation, i.e. both weighing on activity and creating inflation, the economic outlook was revised accordingly.
In the days and weeks following Liberation Day, the consensus cut its US growth forecasts by 0.8 points for 2025 and raised its inflation expectations by 0.4 points. The IMF lowered its global growth forecasts by 0.5 percentage points for 2025 and 0.3 percentage points for 2026.