GS Morning update: Thoughts From the Floor and European Views

This morning update highlights the outperformance of AI and energy sectors due to supply shortages while warning of risks from rising yields and the Iranian conflict. It specifically recommends EURGBP upside to hedge UK fiscal risk and expects German defense spending to buffer Euro area growth.

Key Takeaways

• 1.Market outperformance is heavily concentrated in AI supply chains and energy markets where demand remains resilient against shortages.
• 2.The Iranian conflict is identified as the primary macro risk to hedge, particularly its potential impact on rates markets.
• 3.EURGBP upside is recommended as the most effective hedge for UK fiscal risk-premium as political risks remain elevated.

Table of Contents

• 1) ADAM CROOK – Connecting you to GS: Thoughts from the Floor
• 2) GLOBAL MACRO (WILSON / TRIVEDI) – Global Market Views: Shortages
• 3) ADAM CROOK – GBP: Hedging UK Tails
• 4) EUROPE ECON (STEHN) – European Views: Testing Times
• 5) Week Ahead Previews

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