The US Presidential election, which took place in the fourth quarter of 2024, was eagerly anticipated won by Donald Trump. Moreover, the Republicans managed to win both houses of the US Congress. This constellation should allow Donald Trump to be able to implement his agenda in future.  

At the beginning of the quarter, yields on the bond markets increased. Higher than anticipated inflation as well as improved economic data caused market participants to reconsider their expectations about future interest rate cuts. The GDP in the eurozone grew by 0.4 % in the third quarter compared to the previous quarter, which was a more significant increase than economists had anticipated. Additionally, inflation was also slightly higher at 2% year-on-year. A similar picture emerged in the USA: inflation picked up and private consumption also turned out better than anticipated. As expected, the ECB lowered the deposit rate by 25 basis points in October, from 3.50% to 3.25%, yet remained vague regarding a possible future rate path..

 As mentioned above, the US presidential election was the focus in the fourth quarter. Following the results, US yields rose once again. Should Trump fulfils his election promises, he will likely to introduce significant import tariffs during his term of office and contribute to a further increase in national debt. Against this backdrop, investors were worried about a resurgence of inflation. The concern about the introduction of tariffs, which could have a significant impact on the European economy, caused yields in the eurozone to fall. However, towards the end of the year, bond yields increased significantly again.

 The day after the US election and after months of disputes over the economic policy direction of the government, the incumbent Chancellor Olaf Scholz announced the dismissal of his Finance Minister Christian Lindner. As a result, the FDP withdrew from the government and the so-called traffic light coalition collapsed. As expected, the Federal President dissolved the parliament shortly after Christmas. New elections are scheduled for 23 February 2025. Similarly, the government in France collapsed due to economic policy differences. Prime Minister Barnier’s budget proposal included significant savings, spending cuts, and tax increases, but failed to gain majority support. A subsequent vote of no confidence toppled the government.

 The US dollar performed strongly in the past quarter Thus, the US dollar was able to gain over 7% against the euro. Especially after Donald Trump’s election victory, the US dollar appreciated significantly. The Norwegian krone was slightly weaker, giving way a little to the EUR in the fourth quarter.

 In this environment, LiLux Rent managed to gain 1.9%. Over the year, the fund was able to increase by 8.36%.