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
- The war with Iran has caused fluctuations in the stock markets in recent weeks, but all in all the reaction remained rather muted. The markets are assuming a short conflict with a limited impact on the economy. It is expected that a scenario of positive (but somewhat slower) economic growth can be resumed soon, with earnings growth fuelled by substantial investments in AI. Still high valuations implies a limited margin of error.
- 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 first cracks are starting to appear in share prices after a very strong start to the year. If energy infrastructure suffers major damage, there is a risk of greater economic consequences that last for longer.
What happened in the world?
Ceasefire in Iran buys breathing space
- In exchange for reopening the Strait of Hormuz, the US and Iran have agreed on a temporary ceasefire. The actual negotiations to broker a broader agreement start on Friday April 10th. Structural differences of opinion are wide-ranging. Now that diplomacy has been given a chance, it is less likely that the worst-case scenarios will materialise, namely a conflict that lasts much longer or one in which damage to infrastructure in the Middle East is vast.
- In the US, the combination of slower job growth, shrinking savings buffers and higher import tariffs is weighing on household purchasing power. There are no predictions of a recession, but a cooling is expected.
- 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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