Markets opened the second quarter of 2025 on a weaker note with significant losses. President Trump’s proclaimed “Liberation Day” on 2 April 2025 turned out to be the starting signal for a global financial market shock. With the announcement of his punitive tariffs on virtually the entire world, the US President exceeded the already negatively priced-in expectations of market participants. Equity markets came under significant pressure whilst credit spreads on corporate bonds widened noticeably. Just seven days later, on 9 April 2025, President Trump announced a 90-day suspension of the punitive tariffs in order to negotiate deals with individual countries and economic regions.

Equity markets, particularly in the US, rose sharply in response whilst credit spreads on corporate bonds narrowed significantly by the end of the quarter. The US President’s approach of threatening harsh tariffs and subsequently reversing them was observed more frequently in the second quarter, making the United States a significantly less predictable partner. The resulting loss of investor confidence pushed the yield on 10-year US Treasuries to over 4.6 % at its peak during the second quarter. Gold recorded a new all-time high, surpassing USD 3,500. The US dollar depreciated significantly.

In light of the explosion in US debt, the last major rating agency, Moody’s, also downgraded the United States on 16 May, lowering its rating from Aaa to Aa1. Moody’s currently projects that US debt could rise to as much as 134 % of GDP by 2035. Given the continued declining inflation in the eurozone, the ECB cut its deposit rate by 25 basis points in both April and June, bringing it down to 2 %. The Fed, on the other hand, remained on hold for the fourth consecutive time.

In June, the conflict between Israel and Iran dominated the political landscape. However, equity and bond markets showed little reaction. Only oil prices spiked sharply but corrected just as quickly as tensions in the conflict eased.

The LiLux Rent moved sideways in a challenging currency environment. The euro appreciated by around 9 % against the US dollar, approximately 4.5 % against the Norwegian krone, about 2.6 % against the Swedish krona, and roughly 5.3 % against the South African rand.