EMEA Macro Outlook and Investment Ideas

UBS expects the EMEA economy to slow in 2026 as energy shocks weigh on growth, prompting a cautious but divergent path for the ECB and BoE. They maintain a neutral view on equities and FX, favoring select structural growth themes and high-quality bonds.

Key Takeaways

• 1.Eurozone and UK economies are expected to slow in 2026, with growth moderating to 0.8% and 1.0% respectively due to energy shocks.
• 2.Monetary policy divergence expected: ECB is likely to hike rates to 2.5% in summer 2026, while the BoE is expected to hold at 3.75% until 2027.
• 3.Equities remain neutral but favor cyclicals with secular exposure (IT, Industrials) and high-quality dividends in Switzerland.

Table of Contents

• New this month
• Macro outlook
• Equities
• Foreign exchange
• Fixed income
• CEEMEA

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