2025 Market Outlook: A Comparative Analysis of Key Asset Class Projections

The 2025 market outlook presents a varied yet insightful perspective on global asset classes, driven by forecasts from UBS, Julius Baer (JB), and Societe Generale (SocGen). From equities to currencies, interest rates, yields, and commodities, their differing projections reflect nuanced interpretations of macroeconomic conditions. Below, we dissect their outlooks, highlighting key areas of alignment and divergence.

Equities: Divergent Optimism

The equities market forecasts for the end of 2025 reflect a mixture of cautious optimism and bullish confidence:

S&P 500: UBS forecasts the index at 6,600, JB at 6,450, while SocGen is the most bullish at 6,750. SocGen’s optimism is rooted in expectations of front-loaded returns driven by tax cuts, reshoring policies, and cyclical profit growth.
Eurostoxx 50: SocGen also leads here, projecting 5,050, compared to UBS (4,900) and JB (4,950).
FTSE 100: The FTSE’s forecasts remain close, with UBS at 8,200, JB at 8,175, and SocGen predicting a slight increase to 8,300.
SMI: UBS and JB show alignment at 12,200 and 12,150, respectively, reflecting confidence in Switzerland’s equity market stability.
Topix/Nikkei: JB expects Japan’s Nikkei to hit 40,000, reflecting optimism over domestic policies and economic reforms. UBS forecasts the Topix at a more modest 2,850.
MSCI China: SocGen stands out with a bullish 80, compared to UBS’s 74 and JB’s more conservative 70.

Currencies: Consensus and Disparities

The outlook for major currency pairs shows more consensus than divergence:

EURUSD: All three banks forecast parity at 1.12, signaling stability in the eurozone’s economic recovery.
GBPUSD: UBS and SocGen align at 1.35, while JB slightly edges higher to 1.36, reflecting moderate confidence in the UK’s growth trajectory.
USDJPY: SocGen is bullish on yen appreciation, forecasting 135.00, compared to UBS at 145.00 and JB at 142.00.
USDCNY: SocGen projects a stronger yuan at 7.00, with UBS at 7.50 and JB in the middle at 7.20. This reflects differing expectations on China’s monetary policy and economic stimulus.

Interest Rates: Diverging Policy Paths

Interest rate projections reflect varying expectations for central bank policy:

USD (Fed Funds Rate): JB predicts the most hawkish path at 4.25%, followed by SocGen at 3.50% and UBS at 3.33%.
EUR (ECB): SocGen is slightly higher at 2.25%, while UBS and JB align more closely at 2.00% and 1.75%, respectively.
GBP (BoE): UBS forecasts the highest rate at 3.75%, with JB at 3.50% and SocGen at a dovish 3.00%.
CHF (SNB): UBS expects 0.50%, higher than JB’s 0.25%, highlighting UBS’s expectation of tighter Swiss monetary policy.

Yields: Higher Long-Term Rates Ahead

The long-term yield outlook underscores the impact of fiscal policies and global inflation expectations:

USD 10y Treasury: JB predicts the highest yield at 4.70%, followed by SocGen at 4.50% and UBS at 4.00%.
EUR 10y Bund: JB forecasts 2.45%, with SocGen at 2.35% and UBS at 2.25%.
GBP 10y Gilt: JB leads again at 4.40%, while UBS expects 4.00%.
JPY 10y JGB: JB predicts 1.40%, while UBS projects 1.20%, reflecting differing views on Japan’s monetary tightening.

Commodities: Stability with Modest Gains

In the commodities space, UBS provides the most detailed projections:

Brent Crude: UBS forecasts $80/bbl, reflecting expectations of steady demand and controlled supply.
Gold: UBS predicts a rise to $2,900/oz, likely driven by continued investor interest as a hedge against inflation and geopolitical uncertainty.

Key Themes and Implications

Equities Leadership: SocGen’s bullish stance on US equities highlights confidence in profit growth driven by pro-business policies. Meanwhile, JB’s optimism for Japan’s Nikkei reflects expectations of domestic reforms and economic resilience.
Currency Stability: The alignment in EURUSD and GBPUSD forecasts underscores expectations of steady monetary policy, while SocGen’s bullish JPY and CNY projections highlight potential policy divergence.
Diverging Rate Paths: JB’s hawkish forecasts across major central banks suggest expectations of persistent inflation, while UBS and SocGen project a more dovish path, particularly for the BoE and Fed.
Commodities Resilience: UBS’s stable outlook for Brent and gold reflects expectations of steady global demand amid geopolitical uncertainties.

In Summary

The 2025 market outlook underscores a complex yet optimistic environment across asset classes. While SocGen is notably bullish on equities and the yen, JB’s forecasts point to steeper yield curves and higher rates, reflecting a more cautious stance. UBS maintains a balanced view, projecting moderate gains across the board. These perspectives offer valuable insights for investors navigating the uncertainties of the coming year.