A landmark tariff truce between the United States and the European Union has helped ease investor nerves, according to UBS Global Wealth Management chief investment officer Mark Haefele. However, Haefele cautions that markets remain vulnerable to potential surprises in upcoming economic data releases. UBS is a global firm providing financial services, including wealth management, investment banking, and asset management. The firm serves individuals, families, and institutions around the world.
“The agreement helps de-escalate global trade tensions and supports the view that the worst may be behind us,” Haefele stated. The deal, struck over the weekend, includes capping most tariffs at 15 per cent, down from a threatened 30 per cent. It also encompasses a European Union commitment to spend $750 billion on US energy imports, $US600 billion in economic investment, and a large-scale order of American military equipment.
UBS notes that this truce reinforces a broader pattern of US trade normalisation, following recent agreements with Japan and Indonesia, as well as the renewal of a tariff truce with China. Despite this progress, Haefele warned that “volatility may return as the focus shifts to economic data including payrolls, inflation, and retail sales”.
While global equities have rallied, driven by enthusiasm for artificial intelligence and resilient economic indicators, UBS is urging clients to adopt a more defensive investment stance. The investment bank maintains a constructive outlook on long-term technology and healthcare trends but advises clients to consider hedges and reduce exposure to the US dollar amidst rising fiscal risks. Gold remains a key geopolitical hedge, with UBS maintaining its 12-month price target of $US3500 an ounce.
