Report published September 25, 2026
EMEA Macro Outlook and Investment Ideas – UBS Monthly Strategy Update
UBS · September 25, 2026
UBS maintains an Attractive stance on European equities and high-carry fixed income, projecting 15% annual Eurozone earnings growth in 2026 and 2027. Despite persistent energy-driven inflation prompting final rate hikes by the ECB and BoE, market expectations for monetary tightening are seen as excessive, favoring carry trades across bonds and FX.
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Finvaulta summarizes UBS's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.European equities are rated Attractive with Eurozone equities most preferred, supported by a new earnings cycle forecast at 15% growth in both 2026 and 2027.
- 2.Bonds remain Attractive with an emphasis on defensive carry; UBS favors short-to-medium corporate tenors, high-quality bonds up to 10 years, and high-quality emerging market credit.
- 3.Inflation persistence will prompt cautious final central bank rate hikes (ECB +25bps to 2.75% in Dec; BoE hikes in Nov and Feb to 4.25%), but current market pricing for tightening is excessive.
Table of Contents
- Section 1: New this month
- Section 2: Macro outlook
- Section 3: Equities
- Section 4: Fixed income
- Section 5: Foreign exchange
- Section 6: CEEMEA
Report data
Relative preference and absolute preference for European equities, sectors, and markets
| Metric | Estimate | Context |
|---|---|---|
| Eurozone Peak Inflation Forecast | 3.5% | Eurozone inflation is expected to peak in early 2027 due to elevated energy prices before returning to target by 2028. |
| Eurozone Real GDP Growth Forecast | 0.8% | Eurozone economic growth showing resilience to higher borrowing costs and energy prices. |
| Eurozone Real GDP Growth Forecast | 1.2% | Eurozone economic growth expected to accelerate in 2027. |
| UK Real GDP Growth Forecast | 1.1% | UK economic growth forecast for both 2026 and 2027. |
| Eurozone Corporate Earnings Growth Forecast | 15% | Forecast Eurozone earnings growth of 15% each year, equating to 32% combined two-year expansion. |
Reports in this series
EMEA Macro Outlook and Investment Ideas is shown in chronological order through this edition, published on September 25, 2026.
Part of the EMEA Macro Outlook and Investment Ideas series — view all 4 editions
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