Stock Market Impact: Deutsche Bank expects a mild sell‑off in sovereign bonds, projecting 10‑year US Treasury yields at 4.70%, while keeping its year‑end S&P 500 target at 8,000 points, indicating constructive equity outlook.
Listed Companies and Sectors: The United States is highlighted as the most resilient major economy due to strong fiscal tailwinds and AI investment, whereas the euro area is forecast to grow only 0.5% in 2026, facing a technical recession; China’s export strength limits damage, while Japan faces reduced growth and aggressive BOJ tightening.
Investment Flows: Assuming a US‑Iran diplomatic framework by end‑June, the Strait of Hormuz would reopen, allowing Brent crude to fall to $86/barrel in Q4, supporting investment sentiment; a prolonged closure could push crude to $150/barrel, severely curbing global growth and deterring inflows to Europe.
Interest Rates, Inflation, and Liquidity: Global headline inflation is revised up to 3.8%, driving an aggressive upward turn in central‑bank tightening; the Federal Reserve is projected to hold rates indefinitely with rising hawkish risks, while the ECB is expected to raise rates by 50 basis points this summer.
Fiscal or Monetary Policy: US fiscal tailwinds bolster resilience; Europe’s energy shock forces tighter monetary policy; the bank notes persistent AI optimism as a structural fiscal boost.
