---
title: "Markets and Trends 2026: Global Economy - A new shuffle of the cards"
url: https://www.helaba.com/en/markets-and-trends-2026-global-economy-new-shuffle-cards
type: dd_research
language: en
updated: 2026-09-28
keywords: Kapitalmärkte im Überblick, Kapitalmarktausblick, Markets and Trends
---

# Markets and Trends 2026: Global Economy - A new shuffle of the cards

© Helaba | Volkswirtschaft/Research | November 2025 1 von 1 | © Helaba | Volkswirtschaft/Research | November 2025 1 von 1 Markets and Trends 2026 Global Economy – A new shuffle of the cards Research & Advisory, November 2025 Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 2 of 28 Table of Content → The Editorial for 2026: Global economy – A new shuffle of the cards → Baseline scenario: A new shuffle of the cards (70 %) → Negative scenario: The house of cards collapses (20 %) → Positive scenario: An ace yet to play (10%) → Monetary policy: High uncertainty – the neutral rate is the trump card → Government bonds: No carte blanche for rising debt → Equities: A challenging hand to play → Gold: The king on the table → Real Estate: New cards, old problems → Currencies: Trump not the “trump card” for the dollar → Germany: The government must play its cards → United States: Still going for “Vabanque!” → China: Staking everything on one card → Gross domestic product and inflation → Financial markets forecasts Editorial Date: 10 November 2025 Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 3 of 28 The Editorial for 2026: Global economy – A new shuffle of the cards Each year, our economic and capital market outlook is built around a central theme that serves as a metaphor for the prevailing environment in the year ahead. This time, we have chosen playing cards as our guiding motif – an apt symbol for today’s global economy, which increasingly resembles a vast and complex card game. In the past, all players seemed to hold similar cards: the rules were clear, and everyone knew their role. Today, however, the deck is being reshuffled and redealt. The rules are changing – even mid-game – and uncertainty has taken a seat at the table. However, this starting point also offers opportunities. pro- vided new strategies are developed to seize them. Those who adapt swiftly, remain alert, and play their new cards wisely stand the best chance of emerging as winners. Our baseline scenario, “Global economy – A new shuffle of the cards,” en- compasses both risks and opportunities, with the latter ex- pected to prevail. We assign a 70 % probability to this scenario, reflecting a slightly higher degree of confidence than in our outlook for 2025. But what underpins this increased optimism? Baseline scenario: Global economy – A new shuffle of the cards In many respects, 2025 has been a watershed year – geopolitically and in terms of trade policy, security, diplomacy and – for US citizens and investors in the United States – the principles of the rule of law and the separation of powers, the foundations of which had, until recently, been taken for granted. To describe today’s world as merely a new hand would be an understatement; it is an entirely new game, and the occupant of the White House continues to change the rules in every round to serve his own interests. Having faced little resistance so far, Donald Trump has no incentive to alter his tactics in 2026 – particularly with regard to tariff policy. It would therefore be naive to assume that he will refrain from imposing, or at least threat- ening, further trade restrictions. The most plausible assumption, however, is that the world will once again avoid a cycle of escalation and that, at least when it comes to their breadth, the most significant protectionist measures now lie behind us. Strategy has become the key to success In many ways, it may appear as though Donald Trump alone dictates the rules of the game. Yet this could not be further from the truth: his most formidable opponent, China, is equally adept at playing – but does so with far greater subtlety. Germany, still one of the world’s strongest economies, finds itself on the sidelines of this duel, making it all the more essential for Europe to develop a collective strategy. In doing so, however, it must avoid being unsettled by the cards it holds and instead play them wisely. Five themes set the tone for 2026 Both structural and cyclical challenges are set to dominate in 2026. Germany, in particular, will be able to play the cyclical card as rising real wages and fiscal stimulus measures prompt a recovery that should allow the country to get back up to speed with the rest of the euro zone. Whether this card will also be a winner in subsequent years is uncertain as that would require an interplay between the four structural cards: public finances, competitiveness (including in artificial intelligence), the global trade regime and security policy. Here, a truly pan-European approach will be crucial to achieving success. “The rules are changing – even mid-game – and uncertainty has taken a seat at the table.” Dr Gertrud Rosa Traud Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 4 of 28 Negative scenario: The house of cards collapses Our negative scenario illustrates how fragile the game can be. Several risks materialise simultaneously – geopoliti- cal tensions escalate, and structural weaknesses deepen. Cards that once looked promising lose their value: the economy slips into recession, volatility and declining prices take hold of financial markets, public finances come under strain, and interna- tional collaboration be- comes increasingly difficult. Players realise that they have been dazzled by seemingly attractive cards. Yet the foundations of the house of cards – built on the pillars of the economic cycle, competitiveness, public finances, the global trade regime and security policy – prove unstable and it collapses. We assign a probability of 20 % to this negative scenario. Positive scenario: An ace yet to play In our positive scenario, the global economy draws an ace from its sleeve. It overcomes the effects of recent crises, driven by investment and innovation underpinned by AI-enabled productivity gains and renewed growth momen- tum. Greater international cooperation, improved competitiveness, sounder public finances and a more stable trade regime create a virtuous circle. As geopolitical tensions recede, everyone around the table is able to play their best cards and benefit from the favourable conditions. We put the probability of this upside scenario at 10 %. Seize the opportunities that the new year deals you – but bear in mind that success not only depends on holding the right hand, but also on playing it with the right strategy. In this spirit, I wish you every success in your invest- ment decisions in 2026. Yours, Dr Gertrud Rosa Traud Chief Economist/Managing Director Probabilities for economic and capital market scenarios Source: Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 5 of 28 Baseline scenario: A new shuffle of the cards (70 %) US President Trump’s policies have abruptly upended the game rules that have governed the global economy for decades. His erratic approach has created an environment of chaos, uncer- tainty and confusion. As a result, 2026 is set to be another year of damage control. Yet the disruption also offers an opportunity for players to discard outdated practices and experiment with new strategies – provided they have the willingness to adapt and the courage to take risks. In many respects, 2025 has been a watershed year – in terms of geopolitics and trade policy, of security and diplo- macy as well as – for US citizens and investors in the United States – the principles of the rule of law and the sepa- ration of powers, the foundations of which had, until recently, been taken for granted. To describe today’s world as merely a new hand would be an understatement; it is an entirely new game, and the occupant of the White House continues to change the rules in every round to serve his own interests. Having faced little resistance so far, Donald Trump has no incentive to alter his tactics in 2026 – particularly with regard to tariff policy. It would therefore be naive to assume that he will refrain from imposing, or at least threat- ening, further trade restrictions. Just like in 2025, it is reasonable to assume that the world will once again manage to avoid a cycle of escalation in 2026 and, the most significant protectionist measures now lie behind us. For certain sectors and countries, however, Washington is likely to make further changes to the rules of the game. We do assume that the US admin- istration will refrain from launching an impatient campaign along the lines of “we want to see results NOW!” – even though the US trade deficit is unlikely to show any meaningful improvement. AI: The global economy goes all in! A boom in one particular sector, from which the United States benefits more than its competitors, has provided Trump with economic policy headroom: Artificial intelligence. Here, the stakes could hardly be higher, with a tril- lion-dollar jackpot having meanwhile accumulated on which the fortunes of a large part of the global economy and financial markets depend. Not since the dot-com bub- ble of the late 1990s has any technology triggered such an enormous surge in investment and equity valuations. Yet a significant share of the current eco- nomic momentum and the rising value of financial assets is riding on the promises of the major tech companies and their champions in politics, the media and academia. But will AI deliver what it promises? We assume that investment activity in the United States – and, to a lesser extent, in China and Europe – will once again be fuelled by a continuing AI boom in 2026. The issue of artificial intelligence also plays a central role in our alternative scenarios. In the United States, deregulation and the cutting of red tape appear to be primarily driven by the government’s ideological or pecuniary motives and, as such, are unlikely to generate meaningful productivity gains. Within the European Union, the debate over the need to address excessive regulation has been going on for some time, and the new German government has signaled its commitment to structural reform. In practice, however, tangible pro- gress remains limited. The EU’s carbon-based border adjustment tax and the directive that requires companies to report social and environmental impacts along their entire value chain are both scheduled to take effect in 2026, despite being almost certain to provoke renewed tensions with the United States. Meanwhile, France is backtrack- ing on reform, and Germany is hesitant to act. In short, there remains considerable room for improvement. US races ahead in AI investment Private AI investment, USD (billions) Sources: AI Index Report 2025, Helaba Research & Advisory 0 20 40 60 80 100 120 2014 2016 2018 2020 2022 2024 0 20 40 60 80 100 120 China US Europe Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 6 of 28 New game, new tactics: Free trade or industrial policy? This situation raises the question: Will the other players at the table regain their form in the economic policy game in 2026? In 2025, China held a particularly strong hand in countering Washington’s aggressive tactics. As the US’ principal rival, it appears well positioned in 2026 to defend its interests at the global poker table. Greater question marks surround the EU: In the first round in 2025, the Commission effectively folded in the face of Presi- dent Trump’s demands. There may have been good reasons for this, not least the EU’s dependency on the US in security policy. Yet even if many of Ursula von der Leyen’s promises ultimately prove to be empty, a less steep increase in US tar- iff barriers has been bought at the price of sweeping concessions. These include abandoning the WTO’s previ- ously sacrosanct ‘most-favoured-nation’ principle, whereby any preferential trade arrangements granted to one country must also be extended to all other trading partners. With the United States now playing by its own rules, the rest of the world must decide how to respond. In recent years, China has faced growing criticism for playing with a stacked economic-policy deck. Yet the conclusion most players have drawn is not to pressure Beijing to play fair, but rather to adopt similar tactics themselves. In- creasingly, many countries, including the United States and the European Union, are turning to the very instru- ments of industrial policy they once accused China of using against them. In that sense, China’s “game plan” has, for the time being, won the day. Circumstances are prompting the need to find alternative approaches. One potential path could involve new trade structures in which the EU, Japan, Canada, South Korea, the United Kingdom, and select emerging economies pur- sue policies grounded in free-trade principles – even if this means, where necessary, bypassing both the US and China. Central banks little more than spectators in 2026 Central banks, which have been the dominant players in recent years, are no longer as relevant in this new game. Fiscal policy, particularly in the United States but also in the EU, is increasingly testing the envelope in terms of debt. This is raising the acute issue of fiscal dominance: Can monetary policy still act inde- pendently and focus on its core remits, such as ensuring price stability? Or are governments forcing it into a more marginal, accommodative role under the threat of national bankruptcy and financial crisis? In the me- dium term, that could place up- ward pressure on inflation if central banks assist govern- ments in a process of “debt reduction”. This turns out well in our base- line scenario, as it appears unlikely that central bankers will be forced to deviate from an appropriate policy stance – at least not in 2026. Inflation is expected to remain close to target in the euro zone (ECB) or to move towards it in the United States (Fed) over the course of the year. Economic momentum in the US is likely to slow, while in the euro zone – and particularly in Germany – capacity constraints should remain limited after years of economic weakness, even if the anticipated recovery takes hold. This will be especially true if fiscal expansion is comple- mented by long-overdue structural reforms. Performance 2025: Gold and equities outperform the competition Indexed to 31 December 2024 = 100, total yield in Euro Sources: LSEG, Helaba Research & Advisory “Who has all the cards? \[…\] There is more than one game. \[…\] We are going to play other games with other players.” Mark Carney on Canada’s relationship with the United States Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 7 of 28 Overview of forecast in baseline scenario In 2026, the global economy is expected to grow at roughly the same pace as in the previous year, with German growth finally beginning to pick up. At around 1.5 %, Germany will no longer act as a drag on the euro zone, which should record a similar rate of expansion. In the United States, we expect GDP to increase by around 2 % in 2026, as in 2025. China’s economy is likely to expand by about 4.3 %, a somewhat slower pace than in 2025, although concerns about the reliability of its official growth data have once again intensified. While consumer prices in China are essentially flat, the different advanced economies are dealing with inflation to varying degrees. In Germany and the euro zone, the annual rate of price increases is projected to remain slightly above the ECB’s 2 % target. In the US, inflation is expected to move closer to the Fed’s goal. However, with an av- erage rate of about 2.7 %, US inflation is expected to remain closer to the 3 % mark. With a policy rate of 2 %, the ECB has reached a neutral monetary stance. The Fed is moving in the same direction, with rates expected to settle around 3.5 %. Both central banks will need to act carefully to avoid perceptions that they are seeking to support rising government debt through low interest rates. German real estate prices are expected to continue rising in the coming year. Residential properties remain in short supply – particularly in major metropolitan areas – sustaining upward pressure on prices. However, with affordability unlikely to improve, the potential for additional gains is limited. Retail properties are likely to benefit from higher consumer spending, while stronger economic activity should stabilise demand for office space. Given the current interest rate environment, a significant rise in bond market yields appears unlikely. However, the growing supply is likely to encounter increasing investor scepticism, prompting them to demand higher risk premiums. In total, steeper yield curves can therefore be expected on both sides of the Atlantic. By the end of 2026, 10-year government bond yields are projected to stand at around 3.0 % in Germany and 4.5 % in the US. Equity markets have already priced in much of the potential upside by largely valuation-driven price increases. Further gains will depend on significant improvements in corporate earnings. However, the predominance of downward revisions in the current reporting season gives reason for caution. Therefore, we expect equity markets to move broadly sideways in 2026, with the DAX likely to end the year at around 25,000 points. There is little prospect that gold will see a repeat of its extraordinary record-breaking performance in 2026. Never- theless, the precious metal will continue to be supported by the Fed’s ongoing interest rate cuts and the weakness of the US dollar. For these reasons, demand is likely to remain strong and new records could be set. The decline in the US dollar is expected to continue. The US interest rate advantage will diminish as the Fed imple- ments further rate cuts, and the country’s growth edge over the euro zone is likely to narrow. Ongoing policy un- certainty under President Trump will continue to weigh on the currency. By the end of 2026, the euro-dollar exchange rate is projected to settle at around 1.20. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Patrick Franke Selected forecasts for 2026 Source: Helaba Research & Advisory Euro zone Germany USA GDP growth, % 1.4 GDP growth, % 1.5 GDP growth, % 2.0 Inflation, % 2.1 Inflation, % 2.1 Inflation, % 2.7 Q1 - Q4 Q1 - Q4 Q1 - Q4 Deposit rate, % 3M Euribor, % Federal Funds Rate (mid-point), % 2.00 2.00 2.00 2.00 2.00 2.00 2.05 2.10 3.63 3.38 3.38 3.38 USD / Euro 10y Bunds, % 10y Treasuries, % 1.15 1.20 1.20 1.20 2.80 2.80 3.00 3.00 4.30 4.30 4.50 4.50 EURO STOXX 50, index value DAX, index value S&P 500, index value 5,500 5,600 5,700 5,800 23,500 24,000 24,500 25,000 6,500 6,600 6,700 6,800 Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 8 of 28 Negative scenario: The house of cards collapses (20 %) Although the global economy and financial markets have weathered the shocks of 2025 remark- ably well, this resilience may not last. Fresh disruptive forces are likely to surface in 2026, whether from familiar sources or entirely unexpected ones. Yet it is precisely this period of relative calm that could lull players into a false sense of security, encouraging them to take greater risks or act with less caution in the months ahead. Fortunately, among the major advanced economies, there are currently few signs of private-sector imbalances of the kind that have often led to recessions in the past – such as prolonged real estate booms, exceptionally low sav- ings rates or excessive corporate investment and leverage. As a result, the most significant risks of a sudden cor- rection are likely to originate in the political sphere and from uncertainty over the question if the current hype surrounding artificial intelligence has gone too far – that is, whether corporate valuations, particularly in the high-tech sector, have risen to unsustainable levels. Political savvy: a rare commodity For anyone who followed the events of 2025 it should be obvious that the political arena could again become a major source of disruption in 2026. A confidence shock due to policy changes could take numerous forms. To begin with, geopolitical tensions – most notably the trade dispute between the United States and China – could resurface. That said, the EU also has an increasingly fraught relationship with both the US and China. Added to this is the risk of a constitutional crisis in the United States – a scenario once regarded as highly improbable. Such a crisis could arise, for instance, if the administration were to defy a court ruling. Even without a shock of this magnitude, however, financial markets may begin to fundamentally question the competence of the US government, particularly with regard to fiscal policy and the long-term sustainability of sovereign debt. Europe, too, faces a number of latent risks. Debt-to-GDP ratios are climbing, while the growing strength of popu- list parties is undermining political stability. The European Commission is walking a fine line between domestic pressures within member states and mounting competitive challenges from the United States and China. In Ger- many, the government of Friedrich Merz could col- lapse, for example because of a lack of courage to push through reforms, if forthcoming state elections weaken the coalition parties, or if it succumbs to short-term patronage politics. Even the long-antici- pated fiscal stimulus – financed by an enormous rise in government borrowing – could yet fail to material- ise. House of cards largely propped up by “AI” card The exuberance surrounding artificial intelligence is emerging as a potential vulnerability in the global house of cards. Should enthusiasm give way to disillu- sionment, the current boom could prove to be a bub- ble – one that, much like the dot-com era, might trig- ger a stock market correction and possibly a recession. The higher the expectations placed on a transformative technology, the greater the risk of disappointment; and rarely have hopes run as high as they do for AI. However, as much of the investment has been financed from cash flow and non-bank creditors have played a key role in providing capital, the odds are good that a banking crisis can be averted – even if markets are forced to adjust to a more sober reality. Greater confrontation, less co-operation % of GDP % of GDP \*sum of exports and imports of goods and services Sources: LSEG, Helaba Research & Advisory “You don’t have the cards!” Donald J. Trump Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 9 of 28 As concerns surrounding US banks in the spring of 2023 and again in the autumn of 2025 demonstrated, even the most robust supervisory framework may fail to detect emerging problems until it is too late. New growth areas within the financial system, such as providers of private credit operating outside the traditional banking sector, could harbour risks that remain poorly understood due to limited historical experience, particularly if these play- ers are less transparent than euro stablished lenders. Overview of forecasts in the negative scenario In our negative scenario, the global economy slips into recession. Germany, with a very export-oriented economy, is disproportionately affected by trade conflicts. Following three years of stagnation, German GDP shrinks by around 2 % in 2026, and the euro zone economy as a whole also suffers a sharp contraction. The impact on the US economy is less severe, but unemployment rises steeply there as well. Inflation is tempered by falling oil prices and weak economic activity. The rate of price increases declines in both Germany and the euro zone. In the US, the effect of protectionist policies on consumer prices offsets other disin- flationary pressures to some extent. In this challenging fundamental environment, central banks play their familiar trump cards: The ECB contin- ues to cut interest rates, reducing the deposit rate to 1.25 % while maintaining balance sheet stability. Across the Atlantic, the Federal Reserve lowers its pol- icy rate to below 2 %. Bond markets register sharp price gains. Heightened uncertainty drives robust demand for safe-haven assets such as US Treasuries and German government bonds, even as many investors remain sceptical of high sovereign debt levels. This support helps prevent an inversion of yield curves. Due to falling inflation expectations and markedly lower policy rates, the yield on 10-year US Treasur- ies falls to 2 %, while that on 10-year German government bonds declines toward 1 %. Elevated valuations mean that equities are acutely vulnerable to negative surprises from issues such as geopoli- tics, trade policy, the economic cycle and artificial intelligence. Following a slump in corporate earnings, rising in- vestor risk aversion leads to a contraction in valuations. Equities enter a bear market, with the DAX temporarily falling to 16,000 points. The boom on the German real estate market comes to an abrupt standstill and property prices begin to decline. Residential prices fall only modestly due to a continued shortage of supply; in contrast, office and retail properties experience substantial losses amid a weak economic environment. Even lower borrowing costs can do little to off- set this downward trend. As a safe-haven asset, demand for gold soars. However, with the US dollar simultaneously strengthening, the pre- cious metal’s performance is weaker in dollar terms than in euros. Nonetheless, in this scenario, gold is expected to rise above the USD 6,000 per troy ounce mark. Troubled economic times and geopolitical crises once again place the US dollar at the forefront as a safe-haven currency – despite the uncertainties stemming from President Trump’s policies. The dollar’s role as a refuge asset outweighs potential countervailing factors, such as more aggressive US interest rate cuts. In this scenario, the euro-dollar exchange rate declines to 1.05 by the end of 2026, though it remains above parity. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Patrick Franke “Trust is like a house of cards: It takes a lot of time and patience to build it; but even the slightest disruption can bring it all crashing down.” Florian Bauer Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 10 of 28 Positive scenario: An ace yet to play (10 %) The chances of a better-than-expected 2026 appear as remote as ever. Yet, like a gambler with their back against the wall on the brink of losing their last stake, the global economy may still have one last shot at drawing a winning card. Artificial intelligence could potentially play a decisive role. For all the undeniable challenges facing the global economy, fate may still have a positive surprise in store. Could the biggest disruptor of 2025 yet emerge as an unexpected source of hope? A year ago, one could have dismissed Donald Trump’s campaign rhetoric on trade with the reassurance that “he doesn’t really mean it”. At the end of 2025, that is no longer possible. The likelihood of the US President now calling for a broad rapprochement in the trade conflict is about as slim as his embracing the role of a champion for net zero. In any event, there is no return- ing to the status quo ante – a conclusion that likely extends to security policy as well. Once the genie is out of the bottle it cannot be pushed back inside. That said, both sides in the pivotal US–China conflict have signalled a basic willingness to engage in dialogue. A deal that not only eases the risk of short-term escalation but lifts global sentiment in the medium term is there- fore entirely conceivable. The United States could make a positive impact simply by refraining from announcing new punitive measures against its trading partners on an almost weekly basis, as has often been the case in 2025. Several ongoing negotiations with other countries could also reach a successful conclusion, resulting in a modest reduction in global trade barriers. In this context, the up- coming review of the North American free trade agreement could prove particularly beneficial. For companies, such pro- gress would help to reduce uncertainty and curb the prevail- ing tendency to adopt a “wait-and-see” approach. Likewise, countries on this side of the Atlantic could play their part in supporting economic momentum. In the EU, a determined effort to cut red tape and advance struc- tural reforms would provide a meaningful boost to growth. In Germany, ensuring the efficient and effective use of government stimulus funds could help maximise the “bang for the euro”. The key priority should be investment that strengthens productivity and enhances Germany’s appeal as a business location, rather than consumption- driven spending that delivers only temporary and unsustainable growth. Industrial recovery and AI as beacons of hope A long-awaited recovery in global industry could provide the world economy with a much-needed lift. Global manufacturing has been in the doldrums for some time already: Since the energy price shock of 2022, industrial production in advanced econo- mies has largely stagnated, with emerging markets – partic- ularly China – serving as the primary drivers of global manu- facturing growth. Furthermore, artificial intelli- gence has the potential to drive a new wave of growth. Its signif- icant capacity for disruption promises substantial produc- tivity gains. However, despite the increasingly widespread adoption of AI, these have yet to materialise. This may be about to change in 2026, which would in turn justify the high valuations of major technology firms. Should equity prices continue to rise, the resulting growth in financial wealth could further strengthen overall sentiment. “Where there is no risk, there is no re- ward. Where there is no game, there is no life!” Martin Luther Industrial production: Plenty of upside potential Industrial production excl. construction, indexed to January 2019 = 100 Sources: Macrobond, Helaba Research & Advisory 60 70 80 90 100 110 120 130 140 150 60 70 80 90 100 110 120 130 140 150 2019 2020 2021 2022 2023 2024 2025 2026 Eurozone China USA Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 11 of 28 Finally, public finances would also benefit from a stronger economy. This would not just reduce concerns about the sustainability of sovereign debt but could also help to alleviate pressure, particularly in Europe, on govern- ments to make difficult choices between spending priorities such as defence, climate policy and infrastructure. Overview of forecasts in the positive scenario The global economy bounces back. Medium-term growth prospects also improve, supported by technological ad- vances, targeted investment – particularly in AI – and structural reforms. Germany benefits in particular from the recovery in manufacturing industry and enjoys a robust and sustained upswing. Momentum in the euro zone econ- omy as a whole also accelerates. Both in Germany and the wider euro zone, gross domestic product rises by more than 2 % in 2026. Despite stronger productivity gains and a decline in protectionism, inflationary pressure is greater in this scenario than in our baseline forecast. Inflation rates rise above central bank targets, with the average annual rate in Ger- many and the euro zone exceeding 3 % in 2026. With trend growth accelerating, the neutral policy rates also move higher. Central banks therefore adjust their monetary easing stance and return to a slightly restrictive monetary policy. The ECB increases its policy rate toward 3.5 %, while the US Federal Reserve raises rates to around 5 %. Bond market prices decline markedly. As inflation rises and key rates are swiftly hiked, the yield on 10-year US Treasuries surpasses 5 %, and 10-year German government bonds reach 4 %. Although yield curves steepen, the effect is moderated by strong economic growth, which casts sovereign debt levels in a more favourable light. A rebound in industrial activity, coupled with productivity gains driven by artificial intelligence, supports above- average growth in corporate profits. With earnings on an upward trajectory, investors remain comfortable with elevated corporate valuations, driving a sharp increase in equity prices. By the end of the year, the DAX reaches the 29,000-point mark. The German real estate market is boosted by robust economic growth. Rising purchasing power more than off- sets the impact of higher mortgage rates, which sends residential property prices soaring and significantly fuels residential construction. Demand for retail and office space also picks up noticeably in this favourable economic environment, driving up transaction volumes and prices. Gold loses its status as the king on the table as receding geopolitical risks, a resurgent global economy and rising interest rates erode the appeal of the non-interest-bear- ing, safe-haven asset. The yellow metal dips below the USD 3,000 per troy ounce mark. The euro gains as geopolitical risks take a back seat, particularly relative to the safe-haven US dollar. Economic growth in the euro area narrows the gap with that of the United States, while interest rate hikes by the ECB provide additional support to the single currency. As a result, the euro-dollar exchange rate rises to 1.30. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Patrick Franke “You only go around once, but if you play your cards right, once is enough.” Frank Sinatra Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 12 of 28 Monetary policy: High uncertainty – the neutral rate is the trump card With the ECB having delivered, the Fed remains in rate-cutting mode. Once it reaches a neutral policy rate, it may also lay down its cards and adopt a wait-and-see stance. Having achieved an interest rate of 2.0 % – the European Central Bank's inflation target that also reflects the neu- tral policy rate – the bank's Governing Council has manoeuvred itself into a favourable holding position. Given the significant level of uncertainty, the ECB is wise not to lay all its cards on the table. At the same time, futures markets are betting on an end to interest rate cuts. On the inflation front, there is limited room for further monetary easing, as there are no signs of deflationary pressures across the euro area. On the contrary, sev- eral geopolitical developments could soon push infla- tion expectations higher. To avoid undermining inves- tor confidence, the ECB must therefore act carefully. This will be particularly important in 2026, when political pressure on the US Federal Reserve is ex- pected to intensify and government bond markets come under greater scrutiny. The ECB should avoid any perception that it is supporting sovereign debt through overly accommodative interest rates. Overall, in an environment such as this, the likelihood of a prolonged period of monetary policy stability is greater than that of renewed easing. At the same time, the risk of European central bankers being compelled to tighten policy again is limited. Fed in somewhat awkward predicament The US central bank finds itself in a distinctly different posi- tion – partly as a result of President Trump’s tariff policies. The disinflationary trend in the United States came to an end as early as the summer of 2024. Since then, inflation – as measured by the consumer price index – has stabilised at around 3 %, remaining well above the Fed’s price stability target. There is broad consensus that US trade tariffs will cause an increase in prices, though the effect on inflation should be only temporary and not spark a sustained surge of the magnitude seen in 2021/2022. That said, this outcome is far from assured. Inflation expectations remain less firmly anchored than the Federal Reserve would prefer, which explains the central bank’s cautious stance and the delay before labour market con- cerns eventually prompted a resumption of rate cuts. We expect the Fed to continue along this path, albeit only as long as the combination of solid economic growth and ele- vated inflation permits. The Fed Funds target rate is projected to decline to around 3.5 % by mid-2026. Any further monetary easing would depend on a material weakening of economic activity – or on the central bank giving in to the President’s demands to adopt a more expansionary stance not warranted by underlying conditions. There is a risk of Trump exerting greater influence on the Fed when its current Chairman Jerome Powell's term of office expires in May. In our baseline scenario, however, we do not anticipate a significant erosion of the Fed’s independence in the com- ing year. Such a development, were it to occur, would have far-reaching implications for financial markets. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Ulf Krauss, Patrick Franke “We should be at 1 %. We should be less than 1 %.” Donald Trump on what he considers an appropriate US key interest rate Policy rates in neutral territory Policy rates, % (from November 2025: forecasts) \*midpoint of target range Sources: Macrobond, Helaba Research & Advisory % Q1/26 Q2/26 Q3/26 Q4/26 3M Euribor 2.00 2.00 2.05 2.10 ECB Deposit Rate 2.00 2.00 2.00 2.00 Fed Funds Target Rate 3.63 3.38 3.38 3.38 Source: Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 13 of 28 Government bonds: No carte blanche for rising debt Fiscal policy has emerged as a wild card for bond markets. Yet with policy rates expected to hold steady, the odds of a significant rise in yields remain low. German Bunds have largely retained their yield level of the start of 2025. On the one hand, this is a remarkable feat given the global backdrop of economic and geopolitical upheaval. On the other hand, it reflects the ECB’s de- cision to pause its rate-cutting cycle at 2.0 %. Meanwhile, the correlation between Bunds and US-Treasuries has remained relatively low – driven in particular by the impact of US tariff policy and the resulting suspension of rate cuts by the Federal Reserve. On closer examination, several noteworthy developments emerge. Over the course of the year, 30Y German government bonds experienced intermittent price declines exceeding 10 %. Meanwhile, investor appetite for duration risk has waned and government bonds are increasingly perceived as less attractive. Pension funds, in turn, have been reallocating capital towards higher-yielding asset classes. The relaxation of Ger- many’s debt ceiling has also been a significant factor. Against the backdrop of persistently high fiscal deficits in the United States and a politically challenging environment in France – where the government was forced to with- draw planned pension reforms – sovereign bonds are now being viewed more critically than a year ago. Bond market environment volatile – investors remain cautious Governments are unlikely to be granted a carte blanche, as an increasing number of sovereign bond issues are already encountering subdued demand. What, then, are the prospects for bonds in this challenging environment? Headwinds from monetary policy are expected to remain limited, with both the ECB and the Fed likely to maintain a neutral stance throughout 2026. This should help curb market speculation about further rate cuts. Nonetheless, history suggests that periods of low policy rates rarely provide a strong tailwind for bond prices. In due course, the question of when key rates might begin to rise again will inevitably resurface – though this is unlikely to be an issue over the coming year, at least. The ECB has been steadily winding down its balance sheet, while the Fed has recently paused its own quantitative tightening efforts. Over the past three years, the ECB has lowered its share of outstanding euro area government bonds from 42 % to 28 %. However, this strategy rests on a key assumption: that France will not require support through renewed bond purchases. Recent inflation expectations in the euro area, at around 2 %, remain slightly above their long-term average. As Germany’s recovery gathers pace in 2026, the window for further rate cuts is more likely to close than open. In the United States, persis- tently elevated inflation coupled with high levels of public borrowing likewise argues against lower capital market rates and a flatter yield curve. Although the 10/2 spread (the difference between 10Y and 2Y yields) on German government bonds has recently narrowed to around 60 basis points, it is likely to widen in the current environment. With defence spending rising sharply and welfare expenditure remaining high across the euro area, it is doubtful that the region’s debt burden will ease. Conse- quently, investors can be expected to seek higher risk premiums in an uncertain environment. In 2026, the yield on 10Y German government bonds will probably remain at its current level initially, though we expect it to gravitate towards 3 % as the year unfolds. At the same time, 10Y US-Treasuries will trend towards the 4.5 % mark. Thanks to a stable outlook for monetary pol- icy, however, we do not anticipate any significant shift in capital market rates. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Ulf Krauss Yields expected to edge higher Yields, % with Helaba’s forecasts Sources: LSEG, Helaba Research & Advisory % Q1/26 Q2/26 Q3/26 Q4/26 10y Bunds 2.80 2.80 3.00 3.00 10y Treasuries 4.30 4.30 4.50 4.50 Source: Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 14 of 28 Equities: A challenging hand to play 2025 is likely to mark the third consecutive year of above-average performance. With valuations exceeding fair value, the question for 2026 is: what trumps do equities still have left to play? There is an old adage that “stock markets hate uncertainty” and with US trade policy, the ongoing war in Ukraine and the conflict in the Middle East among the key potential headwinds, it has been repeatedly put to the test. Geo- politics has become synonymous with a world in which the cards are being reshuffled. Despite numerous develop- ments that could have triggered sharp corrections, most indexes have shown remarkable resilience. Setbacks have been brief, and many stock benchmarks have continued to notch up new highs. 2025 is likely to mark the third consecutive year of above-average price gains. Does this mean the old stock market adage no longer holds true? Central banks well versed in the rules of the game The ongoing, global wave of interest rate cuts has been a key driver of equity markets, paving the way for a sharp rise in valuations. Unlike in previous cycles, however, monetary policy easing has so far failed to translate into a meaningful acceleration of economic growth. As a result, corporate earnings have lagged behind, expanding at a slower pace than the overall market – a pattern often observed in the early stages of a bull market. That said, the current rally has been underway since the autumn of 2022, and many indexes have already reached elevated valu- ation levels. Accordingly, any further price gains will need to be supported by corresponding improvements in earnings expectations; otherwise, equity markets risk collapsing like a house of cards. Germany is only one of several cards in the DAX deck Euro area equities and German dividend stocks recorded strong gains, particularly in the early months of 2025, at times even outperforming other markets. A weaker US dollar, lower relative valuations compared with US equities, and Germany’s more expansionary fiscal policy encouraged international investors to reallocate capital from US to euro assets. President Trump’s announcement of punitive tariffs on his so-called “Liberation Day” triggered sharp declines in equity prices on both sides of the Atlantic. However, the losses were swiftly reversed, with both the DAX and the EURO STOXX 50 subsequently advancing from one record high to the next – despite the fact that Germany and the euro area remain highly dependent on the smooth functioning of global trade. Indeed, DAX-listed companies generate roughly three-quarters of their revenue outside Ger- many, with around one-third originating from North America alone. However, non-German revenue should not be equated directly with exports, as a sub- stantial portion is derived from local production and is there- fore, at most, only indirectly affected by restrictive tariff poli- cies. Moreover, in recent months, statistics on German exports have shown that a decline in demand from the United States was offset by exports to other regions. The flexibility of companies with global footprints to tap into new markets or relocate activities in response to shifting conditions likely explains, at least in part, the resili- ence of equities despite a pronounced deterioration in the environment for global trade. Companies – and by extension, equities – are well positioned to benefit from a drive toward reindustrialisation in many regions. The competition to attract manufacturing investment is intensifying, placing greater pressure on Economic recovery already priced in Index points \*Bands: Fair value based on profit, dividend, cash flow and book value Sources: LSEG, Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 15 of 28 governments to create more favourable business environments. Over the medium to longer term, this dynamic could also help curb excessive regulation in a number of jurisdictions. In addition, equities have seen a surge in popularity as an investment asset among the under-40s in Germany. As this group is looking to accumulate long term wealth, their tolerance for risk is likely to be higher than that of the generation approaching retirement. Yet these structural factors will bear fruit only over the me- dium term, while cyclical developments will dominate in 2026. DAX and EURO STOXX 50 have largely priced in a considerable amount of positive news – primarily driven by valuation expansion rather than by the recovery in lead- ing economic indicators. For equity prices to rise further, companies would need to exceed their earnings expecta- tions; however, the predominance of downward revisions so far warrants a degree of scepticism. Accordingly, we expect equity markets to move sideways in 2026, with DAX closing at around 25,000 points. Are the stakes too high for US equities? At the beginning of the year, the S&P 500 and Nasdaq Composite initially came under pressure as elevated valua- tions prompted institutional investors to reallocate capital to comparatively lower-priced markets. Over the course of the year, though, the US benchmark indexes regained lost ground and reached new all-time highs, supported in part by signals from the Federal Re- serve that it would maintain its accommodative policy stance. Recently, however, concerns have been mounting over a po- tential bubble in the US equity market. The S&P 500 is currently trading at a price-to-earnings (P/E) ratio of around 23, while the technology sector – accounting for roughly 35 % of the index – commands a multiple of approximately 30. For comparison, at the beginning of 2000, the S&P 500 traded at a P/E ratio of about 25, with technology stocks approaching 50. In terms of both their P/E ratios and the so-called PEG (price/earnings-to-growth) ratio, these stocks remain less highly valued than at the height of the dot-com bubble, despite the current hype surrounding artificial intelli- gence and seemingly elevated valuations. However, given their ambitious growth expectations, companies in this sector are among those least able to afford any missteps going forward. As US equities have already priced in a substantial portion of the recent rally – more so than their European counterparts – a period of consolidation may be necessary to prevent the formation of a bubble. For 2026, we see limited scope for sustainable upside in the S&P 500 and expect the benchmark index to close the year at around 6,500 points. Few trump cards left in 2026 While structural factors continue to support equities as the most attractive asset class, their cyclical upside for 2026 appears limited, as much of the recent growth acceleration is already reflected in current prices. Long-term inves- tors are advised to maintain their equity allocations within a broadly diversified portfolio. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Markus Reinwand, CFA “Better to play a strong hand than to keep looking for jokers.” German stock market adage Tech valuations lower than during the dot-com bubble Ratio Sources: LSEG, Helaba Research & Advisory Index value Q1/26 Q2/26 Q3/26 Q4/26 DAX 23,500 24,000 24,500 25,000 Euro Stoxx 50 5,500 5,600 5,700 5,800 S&P 500 6,500 6,600 6,700 6,800 Source: Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 16 of 28 Gold: The king on the table The 2025 gold rally was exceptional. Continued uncertainty surrounding the dollar will keep gold in play in 2026, as well, making it a valuable card to hold – despite the gains it has already made. 2025 is set to go down in history as a record year for gold, both in nominal and real terms. Although a repeat per- formance of 35 all-time highs and annual gains at the top of more than 60 % in US dollar terms – or more than 50 % in euro – appears highly unlikely, gold is still likely to remain a valuable card in investors’ portfolios in 2026. A rare combination of economic, market and geopolitical factors has recently pushed the precious metal above the USD 4,000 mark, ushering in a new era in which the question is no longer if another record high will be reached, but when. The price of non-interest-bearing gold is shaped by many forces, chief among them monetary policy. While recent Fed rate cuts have provided a tailwind, the more decisive driver has been the weakening of the US dollar triggered by Presi- dent Trump’s policies and the resulting loss of confidence in political discipline. His repeated attacks on the Fed and willingness to gamble with the United States’ reputation as a reliable borrower have rattled investors. By justi- fying erratic tariff measures as a means of financing the nation’s towering debt, he has effectively prompted mar- kets to demand a risk premium for holding both US dollars, still the world’s reserve currency, and Treasuries – assets previously considered the safest in the world. Doubts remain in play in 2026, further changing risk/reward profile in gold’s favour Gold has long served as a safe haven alternative for investors. However, the initial surge in its price was mainly driven by political and geostrategic factors. Central banks in emerging markets – most notably China – have been buying gold to reduce their reliance on the US dollar. Although the pace of these purchases has moderated some- what in 2025, it remains high by historical standards. A significant shift away from gold is unlikely until re- newed confidence or improved geopolitical stability prompts a return to the US dollar, or until a credible alternative such as the euro emerges – neither of which is expected in 2026. For gold to set fresh records, a rise in investor de- mand will be key. Substantial inflows into gold ETFs, coupled with increased purchases of bullion and coins, have recently provided significant momentum, reversing the outflows that had weighed on prices as recently as 2024. Within portfolios, gold’s risk/return profile has clearly moved back in its favour. The US dollar and bond market are bearing the brunt of growing doubts about the United States’ political reliability. From an asset-allocation perspective, this has likely led to a repricing of the implied risk premium – the expected additional return of higher-risk assets relative to safe investments. In this environment, equities and gold become relatively more attractive if higher returns are not offered as compensation. With the Fed expected to continue cutting interest rates, the outlook for gold re- mains favourable despite its exceptional performance in 2025. The precious metal is poised to reach new record highs in 2026, albeit at a more moderate pace than in 2025. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Claudia Windt “Gold is the king among assets. In a game of poker, you only win if you know when to show it.” Generated using Copilot (AI) Demand from investors returns Demand for gold, tons Sources: Macrobond, Bloomberg, Helaba Research & Advisory Price / ounce Q1/26 Q2/26 Q3/26 Q4/26 Gold in euro 3,739 3,750 3,833 4,000 Gold in US dollar 4,300 4,500 4,600 4,800 Source: Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 17 of 28 Real Estate: New cards, old problems Three years of economic stagnation and a debt-financed stimulus package have taken their toll on the property market. Are real estate’s fortunes set to improve in 2026? Germany’s economic performance has been weak for three years, rekindling talk of the country as the “sick man of Europe.” In an effort to reignite growth, the government has introduced a fiscal stimulus package. While debt-fi- nanced spending is likely to give a boost to economic activity, it will also curb the potential for a decline in long- term interest rates. How, then, will Germany’s property markets perform in this shifting economic landscape? Full house: Market dynamics driven by housing shortage Germany’s fiscal stimulus measures are particularly expected to boost construction activity, though they may also contribute to above-average price increases in the sector due to greater demand. Alongside the country’s ailing infrastructure, the government has identified the housing crisis as a key societal challenge. Its objectives are to create additional living space and to reduce construction costs. Previously, the rapid growth in the cost of building had been masked by the prolonged period of low interest rates. A “fast-track” construction initiative will allow local authorities to build more quickly and flexibly – although success will depend on their willingness to utilise these opportunities. Further streamlining of stand- ards and regulations, combined with targeted assistance schemes, could help lower costs, accelerate construction activity, and reduce the substantial backlog of projects. Even if these adjustments to existing rules prove effective, a rapid increase in housing completions is unlikely. While the number of building permits for new dwellings has risen in recent months, recovering from a previous all- time low, it takes time for approved projects to be completed. As a result, pressure on the housing market is ex- pected to persist. The number of completed dwellings is likely to continue declining in 2026, falling to around 210,000 units, with any increase in completions not anticipated until 2027. Metropolitan areas are the worst affected by insufficient construc- tion relative to demand. Conse- quently, the housing shortage remains a major catalyst for ris- ing rents and property prices. While rents are forecast to con- tinue rising sharply, the upward trend in prices is likely to slow somewhat in the coming year. This is because higher interest rates, lower growth in real wages and a renewed rise in purchase prices will not lead to any fur- ther improvement in housing affordability. Flight to quality: Sustainable buildings hold the best cards While the recovery in the German commercial real estate market is not yet as firmly established as in the residen- tial sector, it has entered a new cycle. According to the real estate price index published by the Association of Ger- man Pfandbrief Banks (vdp), both purchase prices and rents have been rising since the summer of 2024. Structural shifts, including a greater number of people working from home, the growth of online retail and ESG requirements, continue to exert pressure on the industry. The German office market is showing signs of fragmenting, with demand for high-quality space in prime loca- tions remaining strong and lower-grade properties facing increasing pressure. Vacancy rates in the country’s main Modest growth in all segments vdp real estate price index for Germany, capital values, Q1 2010 = 100 Sources: vdp, Helaba Research & Advisory 80 100 120 140 160 180 200 220 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 80 100 120 140 160 180 200 220 residential office retail “Our goal is to make housing accessible, affordable and sustainable for everyone.” Coalition agreement between CDU, CSU and SPD Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 18 of 28 office hubs have risen from roughly 3 % in 2019 to about 8 % today. This trend is likely to moderate in 2026, as many firms have largely completed adjustments to space requirements. At the same time, demand should stabi- lise, underpinned by expectations of economic recovery. A slowdown in new construction activity is also likely to have a positive impact on demand as less new space comes to the market. Another segment that has faced significant challenges in recent years is stationary retail, as online competition offers consumers greater choice and often lower prices. Consequently, bankruptcies and vacancy rates have risen, while rents and asset values have declined. At the same time, this structural shift has opened the door to new con- cepts for alternative uses that are gradually gaining ground, with property values showing renewed growth over the past several quarters. As real wages are expected to continue rising, the anticipated recovery in consumer spending should translate into a noticeable increase in retail sales next year. The growing importance of ESG-compliant properties remains a key driver of construction activity in the com- mercial real estate sector. Sustainability criteria are increasingly being applied to both new developments and ex- isting buildings. The industry is responding with innovative strategies such as repurposing, hybrid use and flexi- ble space concepts. This underscores the increasing significance of effective asset management: not all proper- ties are future-ready in their current form. Some are losing appeal amid shifting demand, requiring repurposing or facing the risk of becoming stranded assets. Sitting out a round: Open-ended real estate funds playing a waiting game Commercial real estate is showing signs of recovery, while open-ended real estate funds are playing a waiting game. As their valuations are determined by independent appraisers, there is an inherent time lag before market developments are fully reflected in fund performance. This is evident in current data: The “Helaba OIF-Index” – which measures the average performance of nine major mutual funds from the four leading providers – recently declined to -0.7 %. The decrease in returns, primarily due to valuation impairments in individual funds, is expected to bottom out at the beginning of 2026 and gradually recover over the course of the year. By year-end, we anticipate an improvement to around 0.5 %. Nevertheless, this would leave yields well below the long-term average of roughly 3 % and still lower than the yield on 10-year German govern- ment bonds. The low attractiveness compared to fixed-income investments will continue to weigh on the funds in the future. Although net outflows are likely to continue, according to the Bundesbank, liquidity risks are limited due to sufficient liquid funds and long minimum holding and notice periods. Open-ended real estate funds hold around 10 % of their assets as bank deposits. This means that the proportion of liquid assets is well above the legally required 5 %. Conditions in the German real estate market remain challenging despite the ongoing recovery. Residential property prices continue to benefit from a shortage of supply and commercial segments are showing signs of improvement. Market participants must, however, remain attentive to ESG guidelines and the evolving demands of users. In this respect, open-ended real estate funds remain under pressure, primarily due to competition from alternative products offering attractive returns. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Paul Richter Open-ended real estate funds remain under strain % \*total return, average of nine major open-ended German real estate funds Sources: LSEG, Helaba Research & Advisory -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Helaba OIF-Index\* Yield 10Y Bunds % yoy 2022 2023 2024e 2025f 2026f Open-ended fund index\* 2.3 1.5 0.2 -0.7 0.5 Residential real estate\*\* 7.2 -5.0 -1.3 4.0 3.5 Commercial real estate\*\* -0.4 -10.2 -5.3 2.5 2.5 \* Helaba index für German open-ended funds (annual total return); \*\*vdp price indices Germany (annual average), f=forecast; Sources: vdp, LSEG, Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 19 of 28 Currencies: Trump not the “trump card” for the dollar The US dollar is reeling from uncertainty fuelled by President Trump, with little to suggest a re- versal in 2026. US politics remains a source of risk, and monetary policy will be further loosened. Despite occasional rallies, the US dollar has been the clear underperformer in 2025. Contrary to some expecta- tions, the trade conflict initiated by President Trump, along with other policy actions, has weighed on the currency. The greenback has faced sustained pressure from political uncertainties, repeated policy reversals, rising US debt and concerns about the independence of the central bank and the rule of law. The primary beneficiary has been the euro, with its gains reflecting more the dollar’s weakness than its own inherent strength, however. It is difficult to envisage President Trump making any substantial policy shifts in 2026. His erratic behaviour, pro- tectionist stance, expansionary fiscal policies and efforts to influence monetary policy are expected to persist. In addition, Trump will have the opportunity to appoint a new Federal Reserve Chair, although it remains uncertain who this will be and how independently they will be able to act. Nevertheless, the Chair alone cannot determine the course of monetary policy. Overall, there is little to suggest that the doubts surrounding the US dollar will quickly dissipate or that the currency will stage a sig- nificant recovery in 2026. US interest rate advantage set to diminish The Federal Reserve is expected to resume its interest rate cuts in 2026. Even under a new Chair, the scope of monetary easing is likely to remain limited despite persistent pressure from President Trump. However, with the ECB in a holding pattern, the US interest rate advantage over the euro area will continue to narrow. Much of this has already been priced in by capital mar- kets, implying that volatility should remain contained. Nevertheless, the ongoing convergence in interest rate differentials is expected to weigh on the dollar. Ultimately, interest rates mirror underlying fundamentals: the US growth advantage over the euro area is set to narrow further. In addition to stronger stimulus in Europe – particularly in Germany – the US economy is not performing as well due to Trump. US President Trump a liability The influence of economic conditions, and in particular monetary policy, on the foreign exchange markets has been less pronounced since Trump took office. Exchange rates have increasingly reflected uncertainty and con- cern over US policy making. While Trump is no supporter of a strong dollar, he still wishes to preserve its international leadership role. Despite recent losses, the greenback’s value remains high against many currencies. Meanwhile, there are the large US trade and current account deficits, which Trump's tariffs will do little to change. So far, aside from heightened investor uncertainty, there has been no concrete evidence of a deliberate devaluation strategy on President Trump’s part. Nevertheless, investors continue to face a degree of risk for which they are likely to demand a premium. This uncertainty, combined with prevailing monetary policy trends, will remain a headwind for the US dollar. While temporary rallies are possible – particularly during periods of turbulence in Europe – the broader trend of dollar depreciation is expected to per- sist, with the euro-dollar exchange rate projected to reach 1.20 by the end of 2026. Declining US yield advantage as a burden % points USD Sources: Macrobond, Helaba Research & Advisory “The strong-dollar policy is completely intact with President Trump. We want the dollar to be strong. What we don’t want is other countries to weaken their currencies, to manipulate their trade.” Scott Bessent, US Treasury Secretary Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 20 of 28 No clear trend for pound sterling In 2025, the pound sterling was among the underperformers against the euro, despite posting gains versus the US dollar. The Bank of England has so far been cautious in easing its monetary policy stance but, unlike the ECB, is expected to lower its key rate to around 3.5 % in 2026. However, this move should have largely been anticipated by financial markets and is therefore unlikely to exert additional downward pressure on the pound. The UK economy has performed better than expected, and growth is projected to slightly outpace that of the euro area again in 2026. Nevertheless, the pound sterling does have a relative disadvantage: given the country’s sizeable current account deficit and Brexit, the UK remains vulnerable to uncertainty. This makes it challenging for the government to finance public spending. Although these imbalances are moderate by international standards, they have occasionally weighed on gilts and the currency. As a result, the pound remains susceptible to bouts of weakness, even in a broadly stable macroeconomic environment. Overall, the euro-pound exchange rate is ex- pected to move largely sideways, while pound sterling could post modest gains against the US dollar. Swiss franc's potential exhausted Once again, the Swiss franc has been among the winners on foreign exchange markets in 2025. The Alpine safe-haven currency benefited from persistent global uncer- tainty, despite generally positive sentiment across financial markets. This support is likely to extend into 2026, as geopolitical and economic risks are unlikely to dissipate. By contrast, the high US tariffs imposed on Swiss exports have so far had only a limited impact on foreign exchange markets. Presumably, the Swiss National Bank will want to avoid negative interest rates and leave its policy rate at 0.0 %. Even so, the interest rate spread to the euro area suggests a higher euro-franc rate. Occasional foreign exchange market interventions by the SNB remain possible, particularly with inflation hovering around zero. Unlike in the previous years, the Swiss economy is forecast to expand at a slower pace than the euro area in 2026. Unless re- newed uncertainty bolsters demand for safe-haven assets, the franc is likely to weaken modestly against the euro. Japanese yen holds strong cards Despite a temporary sharp appreciation, the Japanese yen has not been one of the top performers in 2025. A slight gain versus the US dollar stands in stark con- trast to significant losses against the euro and many other currencies. But the yen could have pulled out its wild card: monetary policy. That is because the Bank of Japan has defied the global trend by raising interest rates. However, despite rising inflation, it has pro- ceeded with extreme caution and that may have tested the patience of some investors. As the new Prime Minister, Takaichi, is regarded as an opponent of a tighter monetary policy, there was cer- tainly no tailwind from her. However, it is by no means a given that she will rein in the central bank and further cautious interest rate hikes can be expected. However, even regardless of Japanese policy, Japan's interest rate disadvantage is shrinking as rates are falling in the United States. The yield spreads clearly favour the yen, both against the dollar and the euro. Moreover, the currency appears undervalued according to long-term valuation metrics. Therefore, the cards are stacked in the yen's favour – not for the first time, it should be said. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Christian Apelt, CFA Yield spreads show a clear path for the yen % points JPY Sources: Macrobond, Helaba Research & Advisory USD-JPY (rhs) Spread 10y government bonds USA vs. Japan (lhs) 100 110 120 130 140 150 160 170 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 2020 2021 2022 2023 2024 2025 vs. euro Q1/26 Q2/26 Q3/26 Q4/26 US dollar 1.15 1.20 1.20 1.20 Japanese yen 170 170 168 168 British pound 0.88 0.88 0.87 0.86 Swiss franc 0.94 0.95 0.95 0.96 Source: Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 21 of 28 Germany: The government must play its cards Following years of economic decline, Germany is on the verge of a recovery – supported by rising public spending. However, the country still needs structural reforms. The German economy has performed worse in recent years than initially estimated: A comprehensive revision of GDP data by the Federal Statistical Office revealed Germany’s economy contracted in 2023 and 2024, including two periods of technical recession1. These revised figures align more closely with the prevailing pessimistic senti- ment in Germany. With domestic economic growth still not gained traction over the past year, one external politi- cal factor has acted as a significant headwind for the export-oriented economy: developments across the Atlantic. Although domestic demand has increased, US tariffs have weighed on German exports to the United States. On the other hand, alongside this negative external influence, there is another political factor that is expected to provide some support to the German economy. After federal elections in February, a constitutional amendment relaxed the statutory public debt ceiling (the so-called ‘debt brake’) and the new German government, led by Chancellor Friedrich Merz, agreed on the largest spending package in the his- tory of the Federal Republic. This fiscal stimulus pro- gram will lead to a sharp increase in both govern- ment consumption and public investment over the next few years, thereby contributing to the economic recovery. We expect the German economy to ex- pand by 1.5 % in 2026. As a result, Germany will no longer act as a drag on the economic growth of the euro zone, as it had done in recent years. Consumer spending to deliver the first jolt An increase in consumer spending, in particular, should be the initial driver for an economic recovery in 2026, given that private consumption accounts for at least half of GDP. Consumers seem to have gradually absorbed the inflationary shock of recent years and, with real wages rising again after a prolonged hiatus, are once again look- ing to spend more. As consumer prices are expected to continue to increase at a modest 2.1 % next year, real incomes will proceed to grow. Stronger demand from consumers should stimulate the wider economy. Both em- ployment and investment activity are set to pick up, which should lead to an additional rise in demand. In turn, this is expected to boost industrial capacity utilisation, which has remained low until now. Hence, there should also be a recovery in manufacturing industry. Are structural reforms on the horizon? The government is keeping its cards close to its chest Public spending in Germany has been steadily rising for decades, and the new fiscal stimulus packages are set to accelerate this trend. Higher borrowing will lead to broad increases in both government consumption and pub- lic investment, thereby contributing to economic growth. Over the longer term, a central priority will be to ensure that addi- tional funds are primarily directed toward investments that enhance the economy’s long-term efficiency and productivity. Pressure for reform has intensified in recent years, a period marked by crises and economic stagnation. Structural challenges – including high energy costs, taxes and levies and excessive bureaucracy – remain a significant burden for German businesses and the workforce. The economic recovery could turn out to a be a “joker” for the government: as growth resumes, public criticism is likely to ease. 1 Definition technical recession: the GDP was declining for at least two consecutive Quarters “It’s not about the cards you’re dealt, but how you play the hand.” Randy Pausch 2025e 2026f 2027f GDP real, % yoy 0.2 1.8 1.6 GDP real, % yoy, working day adjusted 0.3 1.5 1.5 Private consumption, % yoy 1.0 1.5 1.0 Government spending, % yoy 2.0 2.0 2.0 Gross fixed capital formation, % yoy -0.7 1.5 2.0 Investment in equipment, % yoy -2.0 1.0 2.0 Construction, % yoy -1.5 2.0 2.0 Exports, % yoy -0.5 0.0 1.0 Imports, % yoy 3.5 1.0 1.0 Consumer prices, % yoy 2.1 2.1 2.2 Unemployment rate, % 6.3 6.0 5.3 Unemployed, thousands 2,875 2,750 2,425 Budget balance, % of GDP -3.0 -3.5 -3.6 Current account balance, % of GDP 4.3 4.6 5.1 Sources: Macobond, Helaba Research & Advisory e=estimate, f= forecast Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 22 of 28 While a stronger economy will not resolve underlying structural issues, it can create a more favourable environ- ment for implementing reforms that might otherwise be unpopular with voters. Labour market poised to turn the corner The number of jobseekers is expected to decline in the coming months as the anticipated economic up- turn takes hold. At the same time, a growing work- force should boost aggregate purchasing power, sup- porting consumer sentiment and increasing demand for goods and services. This, in turn, is likely to en- courage companies to expand hiring. The jobless rate – which reached its highest level since July 2020 and has remained elevated since March 2025 – appears to have peaked. The average unemployment rate is projected to fall from 6.3 % in 2025 year to 6.0 % in 2026, with the average number of people out of work expected to decline to approxi- mately 2,750,000 – around 200,000 fewer than cur- rently. More investment = more growth Investment has been notably sluggish in recent years. Nevertheless, machinery and buildings will eventually require replacement as they wear out, creating a catch-up effect over time. Brighter economic pro- spects are also likely to encourage companies to in- crease capital expenditure. Elevated public spending is expected to further sup- port investment. A significant share is directed toward strengthening Germany’s defence capabilities. While part of this military spending is classified as govern- ment consumption, the remainder is recorded as pub- lic investment, thereby contributing to fixed capital formation in machinery and equipment. Additionally, resources from the special infrastructure fund are ex- pected to primarily support investment in public con- struction projects. US policy is not dealing German exporters a favourable hand Foreign demand for German goods is not expected to provide any momentum for growth in 2026, with exports to the United States having fallen significantly in 2025. During a time of trade policy uncertainty, export-focused companies should not bet everything on one card; instead, they should try to diversify their sales markets. That said, trade between European Union countries has recently picked up, presenting further opportunities for Ger- man firms. Overall, however, foreign trade is unlikely to contribute to economic growth in 2026. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Simon Azarbayjani Unemployment to fall as GDP grows Indexed to Q1 2010 = 100 million Sources: Macrobond, Helaba Research & Advisory Investment expected to pick up in 2026 Real GDP and components; indexed to Q1 2015 = 100 Sources: Macrobond, Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 23 of 28 United States: Still going for “Vabanque!” 2026 is set to be somewhat calmer – albeit only relative to 2025. As Donald Trump has encoun- tered only minimal resistance so far, why should he change the game plan now? Since taking office in January 2025, President Trump has turned the rules of the domestic policy game on their head, eroded the rule of law, ended the US government's decarbonisation policy, undermined the independence of the Federal Reserve and effectively halted net immigration. More relevant for many foreigners, he has dis- rupted the very foundations of the global geopolitical order and pursued an aggressively confrontational trade policy – not only toward China but also against numerous US allies. This abrupt realignment in US policies carries two broad implications for the economy and financial markets: short-term cyclical effects and long-term structural consequences. Once the US and Chinese governments stepped back from imposing prohibitive tariffs in May, the economic shock proved manageable. Despite a signifi- cant rise in uncertainty and Trump putting an end to the system of largely unrestricted global trade that has worked well for decades, the global economy has weathered the tariff shock better than many had anticipated. Following an agreement with China at the end of October, the previously looming threat of escalation has, at least for the time being, been removed. Real GDP growth in the United States has slowed from the roughly 3 % seen in previous years. Looking be- yond the volatility in imports caused by tariffs, the US economy is expected to maintain a growth trajec- tory of approximately 2 % for now. AI is a “Trump” card! In recent years, the US economy has benefited sub- stantially from its “trump card” as a global leader in artificial intelligence. Investment in the technology sector, including in new data centres, now accounts for nearly all of the growth in investment demand. In our baseline scenario, we assume this trend will con- tinue into 2026. Moreover, this sector-specific boom has been a key driver of the sharp rise in equity markets, boosting house- hold financial wealth and, in turn, supporting consumption. With excess savings accumulated during the pandemic depleted, and both job creation and wage growth slowing noticeably, it is clear that the rise in household wealth continues to underpin robust consumer spending, which was up by 2.7 % year-on-year in August 2025. Additional support in 2026 is expected to come from lower policy rates (see section on monetary policy). Even prior to the first interest rate cut in September 2025, rising equity prices and a weaker US dollar resulted in easier financial conditions, which is likely to stimulate the economy with a time lag. Longer-term outlook: Gloomy, not least due to fiscal policies From a structural perspective, the impact of Trump’s policies is likely to be largely negative. Any early hopes that markets might be liberalised, or regulatory burdens reduced have so far been dashed, as the administration’s focus has been largely on pushing an ideological agenda – such as campaigns against “wokeness” and climate pol- icy – and even on pursuing opportunities to benefit political supporters or government insiders. On the fiscal policy front, the US appears headed for unrestrained deficit spending: despite significant additional revenue from tariffs, Trump’s tax cuts (his “One Big Beautiful Bill”) are projected to push the federal deficit from an already ele- vated 6.5 % in 2025 to around 7 %. Rising federal debt and interest payments are becoming an increasing prob- lem for the US, already reflected in interest rates and on foreign exchange markets. AI: Going all in! Nominal private fixed investment, % yoy \*”computers”& peripheral equipment”, “communications equipment”and “structures: data centres” Sources: Macrobond, Helaba Research & Advisory -20 -10 0 10 20 30 40 -20 -10 0 10 20 30 40 2015 2020 2025 Residential construction "AI-driven fixed investment"\* Other fixed investment Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 24 of 28 The US government’s immigration and trade policies are likely to weigh on growth prospects – even if AI-driven activity continues to support the economy in the coming years – and there is little indication that Trump will alter course. While zero net immigration may moderate the expected rise in unemployment (projected at 4.5 % in 2026), it will simultaneously constrain potential job growth. Continued uncertainty over trade policy, higher costs for imported goods, restricted access to the global talent pool, and pro- tectionist measures favouring specific industries are set to undermine both the competitiveness of US companies and productivity growth. According to international competitiveness rankings, the US is already no longer among the top ten. Although the US economy is projected to grow by around 2 % in 2026, its potential growth rate is likely to be sig- nificantly constrained by Trump’s “policy reset”. Over the medium term, the substantial advantage the US held over the EU until 2024 is expected to shrink, with trend real GDP growth settling at an annual rate of just under 1.5 %. Impact of tariffs on inflation: Delayed, but not off the cards In line with most analysts, we expect the burden of Trump’s tariffs to fall primarily on US importers and domestic consumers – a call that is supported by the empirical evidence. However, as many tariffs only came into full effect in late summer and effective rates (tariff revenues rela- tive to imported goods) remain well below nominal rates, the impact has been more muted than headlines might have suggested. Higher costs are also being passed on more gradually, as many companies are taking a cautious, wait-and- see approach in light of extreme policy uncertainty, stretching out price increases over a longer period to protect their sales. The downside is that this raises the risk that a one-off price level rise does feed an in- flationary process. Even in autumn 2025, inflation is higher than it would have in the absence of Trump’s tariff hikes. The impact is expected to peak in early 2026, assuming no fur- ther escalation, before gradually easing. For 2026, we therefore project an average annual increase in consumer prices of 2.7 % (2025: 2.8 %). The effects of tariffs and inflation are both likely to subside over the course of the year. Headline CPI inflation should fall to around 2 ¼ % by year-end. Rising electricity costs, a result of the data centre boom and a simultaneous exit from low-cost sustainable energy sources, are one factor likely to prevent a more pronounced decline in in- flation. We also look for labour shortages to keep wage growth elevated – a key cost factor across many industries. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Patrick Franke “I can do whatever I want!” Donald Trump Prices: Tariff impact (hopefully) only temporary Core Consumer prices (excluding energy and food), % yoy\* \*forecasts from October 2025 Sources: Macrobond, Helaba Research & Advisory -2 0 2 4 6 8 10 12 14 -2 0 2 4 6 8 10 12 14 2019 2020 2021 2022 2023 2024 2025 2026 Goods Services Total 2024 2025e 2026f 2027f GDP, real change % yoy 2,8 2,0 2,0 1,5 Inflation rate % yoy 3,0 2,8 2,7 2,5 Unemployment rate % 4,0 4,2 4,5 4,3 Budget balance\* % GDP -6,7 -6,5 -7,0 -7,0 \*Federal incl. Social Security Sources: Macrobond, Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 25 of 28 China: Staking everything on one card The government feels it is on a winning streak and is sticking to its aggressive export strategy. This should continue to pay off in 2026 – provided the conflict with the US does not escalate. China currently holds the stronger hand in its stand-off with the United States, and many observers view Beijing as being in a clearly advantageous position. Washington’s often clumsy, consistently reckless and erratic conduct has increasingly made China appear the more reliable partner – not only among emerging countries but also, in- creasingly, among advanced economies. The United States’ abrupt turn towards isolationism has made it even more difficult, if not impossible, for them to pursue a simultaneous decoupling from China – for many countries already the most important trading partner. This helps China not only in geopolitical terms but also in trade policy. While goods exports to the United States fell by 17 % in the first nine months of 2025 compared with the same period a year earlier, exports to the rest of the world rose by 10 %. This partly re- flects a diversion of trade flows to the US via third coun- tries to circumvent tariffs (“transshipment”), but it also points to an increased focus by Chinese companies on alternative markets in Europe, Asia, Africa, and South America. Consequently, companies in these regions now face pressure not only from weaker sales prospects in the United States but also from intensifying competi- tion by Chinese exporters – both domestically and in third markets. With exports poised to grow significantly in 2025, we expect them to remain a key pillar of Chinese growth in 2026. This should be possible thanks to the temporary “deal” with the US, which delays a raft of additional threatened tariffs until November 2026. Domestic demand: Only a faint glimmer of hope The domestic economy is showing signs of stabilising; how- ever, there is still no clear evidence of a meaningful rebound in consumer spending. Likewise, a recovery in the real es- tate market remains far from assured, even though there are bright spots in certain regions. While the government has ramped up its fiscal stimulus, it still is not doing everything that it could. China continues to stake everything on a single card: exports. In our view, official growth figures remain overstated. According to Chi- nese authorities, real GDP will rise by 4.8 % in 2025. For 2026, we forecast growth of 4.3 %, which in reality re- flects largely unchanged underlying momentum in the economy. Stable price level Excess capacity in Chinese industry and persistently weak domestic demand continue to weigh on prices. This is further exacerbated by declining food prices: the wholesale price of pork – an important staple – was more than 20 % lower year-on-year in autumn 2025. As a result, downward pressure on the consumer price index remains pronounced. After a flat reading in 2025, inflation is expected to edge up towards 1 % in 2026. Against this backdrop, further monetary easing appears likely. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Patrick Franke Fair play? State aid to businesses, % of GDP (2021) \*average for Denmark, Italy, Ireland, France, Sweden and the Netherlands Sources: IWF, Helaba Research & Advisory 0 1 2 3 4 5 6 0 1 2 3 4 5 6 China (2022) UK EU\* Canada Taxes Total support Subsidies Credit Land “The ten core principles: \[…\] Be innovative! Be cooperative! Keep your cards close to your chest!” Adapted from Sun Tzu, The Art of War 2024 2025e 2026f 2027f GDP, real change % yoy 5,0 4,8 4,3 3,8 Inflation rate % yoy 0,2 0,0 0,9 1,5 Unemployment rate\* % 5,1 5,2 5,0 4,9 Budget balance % GDP -7,3 -8,6 -8,5 -8,5 \*"Surveyed" Sources: Macrobond, Helaba Research & Advisory Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 26 of 28 Gross domestic product and inflation 2024 2025e 2026f 2027f 2024 2025e 2026f 2027f Euro area 0.8 1.4 1.4 1.4 2.4 2.1 2.1 2.2 Germany -0.5 0.3 1.5 1.5 2.2 2.1 2.1 2.2 France 1.1 0.9 1.1 1.0 2.3 1.0 1.5 2.1 Italy 0.5 0.5 0.8 0.5 1.1 1.7 1.6 2.4 Spain 3.5 2.9 2.1 1.7 2.9 2.7 2.4 2.2 Netherlands 1.1 1.5 1.1 1.6 3.2 3.1 2.5 2.3 Austria -0.8 0.3 1.0 1.5 2.9 3.5 2.5 2.3 Sweden 0.8 1.3 2.5 2.2 2.8 0.7 1.0 1.5 Poland 3.0 3.3 3.3 3.3 3.6 3.9 3.0 3.0 Czech Republic 1.1 2.5 2.5 2.7 2.4 2.6 2.7 2.5 Hungary 0.6 0.3 2.3 2.5 3.7 4.6 3.8 3.3 United Kingdom 1.1 1.5 1.5 1.5 2.5 3.5 2.5 2.5 Switzerland 1.0 1.5 1.0 1.7 1.1 0.2 0.5 1.0 USA 2.8 2.0 2.0 1.5 3.0 2.8 2.7 2.5 Japan 0.1 1.1 0.8 0.8 2.7 3.0 2.0 2.0 Asia ex Japan 4.7 4.5 4.2 4.0 1.5 1.0 1.7 2.1 China 5.0 4.8 4.3 3.8 0.2 0.0 0.9 1.5 India\* 6.5 6.7 6.1 6.3 4.9 3.0 3.7 4.0 Russia 3.8 0.7 1.4 1.5 8.4 8.5 6.0 3.2 Turkey 3.2 3.0 3.5 4.0 58.4 29.0 21.0 9.0 Latin America\*\* 1.8 2.3 2.0 2.4 25.7 7.6 5.3 7.5 Brazil 2.8 1.9 1.6 1.7 4.4 4.5 4.0 3.0 World 3.1 3.0 2.8 2.7 4.3 2.6 2.5 2.7 \*India: Financial Year; \*\* Latin America ex Venezuela due to hyperinflation; e=estimate, f=forecast, GDP growth working-day adjusted if available Sources: Macrobond, LSEG, Helaba Research & Advisory Gross domestic product Consumer prices Real change, % yoy Change, % yoy Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 27 of 28 Financial markets forecasts Change from end of year latest\* Q1/2026 Q2/2026 Q3/2026 Q4/2026 Interest rates basis points % ECB refinancing rate -100 2.15 2.15 2.15 2.15 2.15 ECB deposit rate -100 2.00 2.00 2.00 2.00 2.00 Overnight rate €STR -98 1.93 2.00 2.00 2.00 2.00 3M Euribor -68 2.03 2.00 2.00 2.05 2.10 6M Euribor -44 2.13 2.10 2.10 2.10 2.15 2y Bunds -8 2.00 2.00 2.00 2.10 2.10 5y Bunds 11 2.26 2.40 2.40 2.50 2.50 10y Bunds 29 2.66 2.80 2.80 3.00 3.00 2y swap rate -4 2.15 2.15 2.15 2.20 2.20 5y swap rate 12 2.37 2.50 2.50 2.60 2.60 10y swap rate 31 2.67 2.80 2.80 3.00 3.00 20y swap rate 59 2.95 3.00 3.00 3.20 3.20 30y swap rate 80 2.96 3.00 3.00 3.20 3.20 Fed funds target rate -50 3.88 3.63 3.38 3.38 3.38 10y Treasuries -45 4.12 4.30 4.30 4.50 4.50 Equities in local currency, % index DAX 21.0 24,088 23,500 24,000 24,500 25,000 Euro Stoxx 50 16.9 5,726 5,500 5,600 5,700 5,800 Dow Jones 12.7 47,928 45,600 46,200 46,800 47,500 S&P 500 16.4 6,847 6,500 6,600 6,700 6,800 Nikkei 225 27.4 50,843 49,800 50,600 51,400 52,000 Gold / crude oil % Gold €/oz 40.5 3,562 3,739 3,750 3,833 4,000 Gold $/oz 57.2 4,127 4,300 4,500 4,600 4,800 Brent crude $/barrel -12.7 65 65 68 71 73 Currencies vs. euro, % exchange rate US dollar -10.6 1.16 1.15 1.20 1.20 1.20 Japanese yen -8.8 179 170 170 168 168 British pound -6.1 0.88 0.88 0.88 0.87 0.86 Swiss franc 1.4 0.93 0.94 0.95 0.95 0.96 \*07/11/2025 Sources: Bloomberg, Helaba Research & Advisory Helaba forecast for end of period… Markets and Trends 2026 © Helaba | Research & Advisory | November 2025 28 of 28 Sign up for our newsletter here: https://news.helaba.de/research/ Themes background and Playing cards: © Getty Images Editorial, p. 3+4: © Jan Ole Helmbold, © Getty Images Basis scenario, p. 5: © Getty Images Negative scenario, p. 8: © Shutterstock Positive scenario, p. 10: © Getty Images We are here for you: Function Authors Phone +49 69/9132- Chief Economist / Head of Research & Advisory Dr Gertrud Rosa Traud 20 24 Bond Strategy Ulf Krauss 47 28 Equity Strategy Markus Reinwand, CFA 47 23 Currency Strategy Christian Apelt, CFA 47 26 Gold Claudia Windt 25 00 Real Estate Paul Richter 79 58 Germany Simon Azarbayjani 79 76 USA, China, Scenarios Patrick Franke 47 38 Publisher and editors Helaba Research & Advisory Editor: Dr Stefan Mitropoulos Publisher: Dr Gertrud Rosa Traud Chief Economist/ Head of Research & Advisory Neue Mainzer Str. 52-58 60311 Frankfurt am Main Phone +49 69/91 32-20 24 Internet: http://www.helaba.de Disclaimer This publication was very carefully researched and prepared. However, it contains analyses and forecasts regarding current and future market conditions that are for informational purposes only. The data are based on sources that we consider reliable, though we cannot assume any responsibility for the sources be- ing accurate, complete, and up to date. All statements in this publication are for informa- tional purposes. They must not be taken as an offer or recommendation for investment deci- sions. Translation Christopher Hanna Photo credits

Helaba's economic and capital market outlook for 2026 compares the global economy to a card game. For a long time, it seemed as if the same cards were always being played. Now they are being reshuffled – and the rules of the game are changing too. The title “Global economy – A new shuffle of the cards” describes our baseline scenario.