Quarter in Review Q1 2025
- Quarter in review
- 09.04.25
Key themes
- Global equities diverged in the first quarter (Q1) of 2025. US stocks fell, while European and emerging-market (EM) equities rallied, reflecting the respective changes in regional growth outlooks.
- The Trump admin’s vacillation over US tariff policy has created increased uncertainty among consumers and businesses alike, dimming the growth outlook for the world’s largest economy.
- Government bond prices sank as yields rose – especially in Germany, where debt issuance is set to increase markedly to fund a monumental new fiscal package.
Markets snapshot
- The MSCI All Country World index fell by 2% (-5.3% in euro terms) over the quarter.
- The MSCI USA fell by 4.5% (-8.5% in euro) as tariff fears led investors to look elsewhere.
- The MSCI Europe ex-UK rose by 6.4% (6.3% in euro) as investors soured on the US.
- EM equities rose by 2.7% (-1.3% in euro terms). The asset class gained on the Chinese government’s efforts to support the domestic economy.
- The MSCI China index rallied by 15.0% (10.3% in euro terms) over the period.
- The ICE BofA 5+ Year Euro Government bond index returned -2.4% over the quarter. Yields on 10-year German Bunds rose by 35bps to 2.70%.
- European investment-grade corporate bonds returned 0.1%, with yields rising by 8bps to 3.34%.