Recent developments in the Middle East, notably the military ceasefire followed by the decision by the United States to block the Strait of Hormuz in order to exert pressure on Iran, continue to fuel tensions. However, the determining factor now lies in the resumption of dialogue between the parties, which appears to be paving the way for an agreement, even if only partial, aimed at containing, or even bringing a lasting end to hostilities.
The search for a resolution to this conflict is likely to be lengthy and fraught with uncertainty, but this momentum is materially improving short-term visibility and reinforcing the scenario of a gradual de-escalation. In this context, maintaining a defensive positioning, and particularly an underweight stance on equities, appears less justified. We have, moreover, recently increased our exposure to equities once again.
This change in portfolio allocation reflects a gradual normalization of the markets, while preserving heightened vigilance in the face of an environment that remains uncertain.
In 2025, nearly one in five vehicles sold in Europe was electrified, a structural trend that could accelerate further if energy price tensions persist. This represents a boon for Chinese manufacturers, which are in the midst of a full-scale offensive in the European market.
They continue to gain market share at a sustained pace. As of the end of February 2026, Chinese electrified vehicles accounted for nearly 8% of the European market, up from 4.2% a year earlier. This progress cannot be explained solely by rising energy prices. In recent years, Chinese automakers have significantly strengthened their brand image through the expansion of their distribution networks, as well as via strategic partnerships (Leapmotor with Stellantis, for example) or by acquiring historic franchises such as Volvo, MG, or Lotus.
Beyond refined design and technological leadership, their true competitive edge lies in their control of the entire value chain. From the extraction of critical metals to battery manufacturing and the design of finished vehicles, China has built a level of vertical integration that is unmatched in the global automotive industry.
In response to this growing influence, the European Union has imposed tariffs of up to 35% on Chinese electric vehicles and is working on the implementation of the Net Zero Industry Act, which would make public subsidies conditional on local production criteria.
However, these tariff barriers do not appear to be curbing their ambitions, quite the opposite. Chinese manufacturers are taking a new step by establishing production facilities directly on European soil in order to bypass them. The giant BYD, for instance, plans to start production at its Hungarian plant in 2026.
The rise of Chinese automakers could profoundly reshape Europe’s automotive industrial landscape. This structural transformation, and its implications, warrant close monitoring.
The Consumer Price Index rebounded sharply in the United States in March, with headline inflation reaching 3.3% on an annualized basis. While this uptick was anticipated, driven by a significant increase in energy prices, core inflation remained contained at 2.6%, which reassured investors.