Capital Markets Game Plan: Key Themes for the Final Quarter

The situation in Iran and its impact on energy markets remains one of the key topics for investors. With the conflict still unresolved, oil prices continue to reflect considerable geopolitical uncertainty. 

Jörg Bayer, RBI Head of Capital Markets Research, expects economic pressure to eventually contribute to an easing of tensions and oil prices to decline from current levels. “We believe the economica pressure is so high for both sides that we will find a solution until the end of the year. We expect a further relaxation to around 70 USD per barrel in 2027,” he analyzes. 

Looking further ahead, structural changes in global oil supply could become increasingly important, as higher production outside OPEC and changing dynamics within the organization may contribute to an oversupplied market. 

At the same time, developments in global bond markets are adding another layer of complexity. Rising yields in Japan could encourage Japanese investors to shift some investments back towards their domestic market, potentially reducing demand for US and European government bonds. In the US, this coincides with concerns around fiscal policy and government debt, while fiscal pressures in parts of the euro area, particularly France, also remain firmly on investors' radar, the expert says. 

Despite higher yields, geopolitical uncertainty, and elevated energy prices, equity markets remain close to record levels. Strong corporate earnings and continued economic growth are helping to explain this resilience. 

As Manuel Schleifer, RBI Senior Equity Market Strategist, highlights, higher yields do not tell the whole story. “Let’s not forget about growth. In the IT segment, which is in focus now because of high CapEx spending and bond emissions, we have very high growth rates. And as long as this is the case, I can well imagine that the market not only can absorb higher bond yields, but also maybe one or the other more rate hike." The shape of the yield curve also matters, with a steeper curve providing a supportive environment for financials, he notes.

Looking ahead, the US midterm elections will be another event to watch for investors. Historically, periods around midterm elections have often coincided with strong equity-market performance, as greater political constraints can reduce the potential for major policy changes and provide companies with more planning certainty. 

Credit markets have also remained resilient, even as higher government bond yields have weighed on total returns. While spreads remain tight, strong corporate fundamentals continue to provide support. 

Large corporates in Europe and the US have strengthened their balance sheets, maturity profiles and liquidity positions in recent years. Against this backdrop, the latest Game Plan highlights investment-grade corporate bonds as a comparatively defensive segment of the credit market. 

The banking sector also continues to show solid fundamentals, supported by strong capitalization and collateral pools. In the current environment, covered bonds are therefore viewed by experts as an attractive alternative to government bonds. 

By bringing these developments together, the latest Capital Markets Game Plan provides a structured perspective on the forces currently shaping global capital markets and what investors should keep in mind heading towards year-end. 

Watch the video to hear Raiffeisen Research experts discuss selected highlights from the latest edition of the Capital Markets Game Plan. 

Download the latest Capital Markets Game Plan to access the complete market analysis, forecasts, and investment outlook here: Raiffeisen Research Portal - Capital Markets Game Plan Q4 26: All aboard the yield train!  (available only for registered users)

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