USA

Year to Date (YTD)

Commentary: Through the month of June, the US saw the approval of the Trump Bill which will seek to reduce taxes but will also be adding over $3 trillion to deficits over the next decade. The Federal Reserve maintained its monetary policy with a rate cut now likely through the September meeting amid sticky inflation and trade‐policy uncertainty. The Consumer Price Index was up by 2.4% in June, less than forecasted. The labour market strength continued, with US employers adding 147,000 jobs and unemployment dipping to 4.1 % in June. Equity markets shrugged off the policy noise: the S&P 500 is now up 5.5 percent YTD, while the 10-year Treasury yield has eased back to 4.23 percent. The tech-focused NASDAQ is up 6.6%.

Europe & UK

Year to Date (YTD)

Commentary: The euro-area fiscal deficit is set to narrow to 2.8% of GDP in 2025, with public debt stabilising around 90% as the reformed EU fiscal framework prompts a contractionary stance next year. The ECB trimmed its deposit facility rate by 25 bps to 2.00%, keeping two additional cuts pencilled in for later this year but signalling no move before September amid slowing energy disinflation and US trade uncertainties. Euro-area headline inflation ticked up to 2.0% in June from 1.9% in May. The real GDP growth is projected to rise by 0.9% in 2025, rising to 1.1% in 2026 and 1.3% in 2027, as lower energy costs and subdued wage pressures offset a firmer euro and trade headwinds. Geopolitics and political uncertainties keep on playing a major role as the Trump administration lately threatened the bloc with a 30% tariff. Despite the policy backdrop, equity markets have shrugged off these headwinds: the Eurostoxx 50 is up by more than 9% YTD.

Malta

Year to Date (YTD)

Commentary: According to the European Commission’s latest forecast, Malta’s economy will sustain growth after a GDP surge in 2024, expanding by 4.1% in 2025–26, driven by domestic demand and healthy net exports in tourism and services. Private and public consumption supported 2024’s upswing, boosted by a 23.1% jump in tourist spending and investment. Employment climbed strongly, with sustained rates expected in the next two years, keeping unemployment hovering around the low 3% mark. Fiscal deficits narrowed to 3.7% of GDP and are projected to fall to 3.2%, while debt to GDP is projected to stay below 48%. The MALTEX remained largely flat in spite of record positive numbers from Maltese listed equities.