In addition to a number of political and geopolitical risks, hopes for rapid interest rate cuts continued to take centre stage in the second quarter. Investors’ hopes gradually subsided with publishing of economic and inflation data. The US economy continues to prove robust. High inflation data and a continued robust labour market in April led investors to gradually abandon their unrealistic visions of interest rate cut. US consumption also remained at a stable level. The result at the start of the quarter were consolidating equity markets and rising yields on the bond markets. However, inflationary pressure eased over the course of the quarter. The braking effect of high interest rates can also slowly be seen in the economic data. The US Federal Reserve noted that further progress was being made towards its inflation target. The Fed left key interest rates unchanged in the second quarter and only one interest rate cut is anticipated in the US this year. This was offset by falling inflation figures at the beginning of the quarter and a significantly weaker overall economic environment in the eurozone, in which the German economy in particular continues to be a problem child. Although inflation picked up again slightly in May, the ECB lowered its key interest rate by 25 basis points to 4.25 % in June as expected yet was cautious about further interest rate cuts. At the start of the quarterly reporting season at the end of April, the signs on the markets began to change. Solid corporate profits, not only among the major technology companies, and outlooks that often exceeded analysts’ expectations, caused stock markets to rise. Nvidia was once again able to report exceptional quarterly figures. The favourable results were supported by improving US inflation figures and a weaker US labour market report. Risk was sought after and yields on government bonds rose. The geopolitical situation came to a head in April. After Iran attacked Israel with hundreds of drones and missiles in retaliation for an alleged attack by Israel on the Iranian consulate in Damascus, fears of an escalation of the conflict arose. However, an Israeli missile attack in response remained unanswered by Iran. Politically, the European elections shook up the European stock markets to some extent. Right-wing parties performed strongly in the elections and made some significant gains, particularly in Germany and France. In response, French President Emmanuel Macron decided to dissolve parliament and call new elections. This caused unrest on the stock markets and the French CAC 40 lost around 6.4 % in June.

The LiLux Convert recorded an increase in value of 1.70 % in the second quarter. A price gain of around 42 % was realised with the sale of the Prysmian convertible bond.