Executive Summary
Geopolitical Risks
· Conflicts in Ukraine and Gaza persist, with heightened tensions between Russia and NATO.
· Strengthening of the China–Russia–India axis as an alternative geopolitical bloc.
Sovereign Debt Tensions
· France and the United Kingdom stand out due to rising risk premia driven by fiscal imbalances.
· France’s debt exceeds 114% of GDP, with interest costs draining resources equivalent to national defense.
· Portugal and Greece keep a positive recovery with signs of fiscal consolidation.
Trade Policy
· The U.S. and the EU signed a tariff agreement (15% on most European exports, with strategic sectors exempted).
· EU–Mercosur agreement paves the way for trade liberalisation, with potential to boost EU exports by 39% and create 440,000 jobs.
Commodities
· Oil remains on a downward trend, with prices in the USD 65–70/bbl range.
· Natural gas prices are stable, with European reserves at record levels (~74%).
· Metals: gold and silver at record highs on safe-haven demand; copper rising due to supply restrictions.
· Agricultural commodities: cereals trending lower, vegetable oils at record highs, sugar showing marginal recovery.
Monetary Policy and Currencies
· The ECB halts cuts at 2% as inflation stabilises at 2.1%.
· The Fed is highly likely to cut rates in September following weak labour data (+22,000 jobs in August).
· The euro has strengthened to USD 1.17, up 13% in 2025.
Economic Outlook
· United States: technical rebound (+3.3% in Q2), though built on fragile foundations; 2025 forecasts at 1.4–1.7%.
· China: growth near 5%, though deflation risks persist.
· Germany and France: stagnation, with projected growth of 0.2% and 0.6% in 2025.
· Spain: robust growth of 2.8% in Q2, though fiscal risks and housing tensions are worsening.
· Portugal: growth of 1.9% in Q2, with forecasts at 2.0% in 2025.
