Global Market Outlook Scenarios for 2025/2026

This report is a comprehensive analysis prepared by UBS, focusing on five potential scenarios that could significantly influence global markets in 2025 and 2026. The scenarios include a US election Red Sweep, a Blue Sweep, a substantial increase in global tariffs, a US recession, and a situation where central banks have eased monetary policy too early. Each scenario is modeled to assess its impact on global GDP, US GDP, corporate profits, and inflation. The report details how tariffs, particularly a significant tariff on China, could lower global GDP and US GDP. It also outlines the implications of a US recession on global policy rates and the potential for central banks to adopt accommodative stances. Furthermore, the report provides forecasts for equity markets, fixed income, foreign exchange, and credit spreads under various scenarios, highlighting the expected performance of different asset classes. Analysts from UBS contribute their expertise to present a thorough examination of these scenarios and their anticipated market impacts.