Energy Risk Builds Beneath a Goldilocks Narrative

Edmond de Rothschild warns that markets are clinging to a soft-landing narrative while underpricing the structural risks of a prolonged energy shock and tightening financial conditions. 

• Equity markets favour AI, semiconductors, and energy, while ignoring broader economic deterioration and weak end-demand sectors.
• A sharp drawdown in inventories and potential Hormuz disruption signal rising structural supply risk.
• Eurozone inflation is easing, but consumer confidence has fallen to post-Covid lows, highlighting fragility beneath the surface.

Markets are pricing stability. The report suggests the real story is the slow erosion of it.