Will Europe be the next hotspot for investors?
Everyone feels it: geopolitics is at the pump, in your energy bills, in your shopping cart and also in your investments. Strategic autonomy is Europe's answer to that uncertainty: less dependence, more control.
Will Europe become the next hotspot for investors? Mark Van Assche, account manager Private Banking and Wealth Office, talks about it with Heng-Ta Quach, CRM portfolio manager at KBC Asset Management.
26/03/2026
How are investors reacting?
Volatility on the stock markets is increasing
- Uncertainty about the duration and intensity of the conflict in the Middle East is weighing on investor sentiment.
- Investors are wondering how high energy prices will climb in the wake of the Iran conflict. Expensive energy prices eventually trickle down into inflation, which explains the gradual rise in the market rate for bonds.
- The war with Iran has caused volatility on the stock markets in recent weeks, but overall, the reaction has been better than expected. However, the continuing high valuation is creating a limited margin of error. The fact that US banks are living up to their reputation and kicking off the results season strongly is good news.
What happened in the world?
Iran ceasefire buys breathing space
- Although a temporary ceasefire has been declared, the war with Iran continues to pose a significant risk to the global economy if energy supplies remain disrupted for a longer period of time.
- Due to the impact of the energy crisis resulting from the conflict in Iran, growth forecasts in both Europe and the US are being revised downwards and are at lower levels than last year.
- Expensive oil is already seeping into inflation. Several countries are deploying strategic oil reserves to ease pressure on the economy, but so far this has had little effect. At the same time, major economies are enacting policies to boost growth. These include additional stimulus measures in China and specific investment plans in the euro area.
- The ECB and the Fed are holding their key rates steady for the time being. A policy rate cut is no longer within expectations.
- In recent months, concerns have surfaced about private loans from lenders other than the traditional banks.
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