Investor Sentiment Turning Cautious
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After a hot fall, a spring tornado could wreak havoc in France
Barely half a year after this year’s French budget was passed, the wrangling over the 2027 budget is about to begin, but that’s not all, because France will also hold a presidential election next spring. During the first public presidential debate, some of the radical candidates put forward ideas that were, at times, unconventional. Although the presidential election in late April still seems far off, based on the latest polls, if no candidate secures enough votes and a runoff is held, it cannot be ruled out that two radical presidential candidates will face off against each other. Market participants may have begun to price in this growing uncertainty, as the yield spread between French and German 10-year government bonds has started to widen again in recent weeks. The period ahead promises to be full of twists and turns, so it will be worth keeping a close eye on developments in French domestic politics.
Commodities - Technical Analysis
Gold and silver prices have retested their uptrend lines, so the long-term trend may continue. Oil prices have broken out of a contracting pattern, which may signal the start of another upward wave. Natural gas prices have also begun to rise, signaling a buy. In the case of copper, the main uptrend remains in effect, and there are currently no signs indicating a change in the trend’s structure. Following significant gains, wheat and corn have become heavily overbought, increasing the likelihood of a correction.
Over 30 senior financial professionals, active in CEE markets and managing more than EUR 6.5 billion in assets under direct control, participated in our Institutional Investor Survey. Here, we highlight the most notable insights.
Investor positioning turns meaningfully more cautious across asset classes. Risk appetite has dropped sharply: the share of investors taking above-benchmark risk fell from 33% to 20%, while low-risk allocations doubled to 30%, pointing to a clear shift toward capital preservation amid geopolitical escalation.
CEE equity sentiment cools with BUX and CETOP both face a regional risk repricing. BUX optimism collapsed (bullish: 42% › 23%), while CETOP also re-rated lower as its prior valuation discount normalized back to pre-war levels. Rising geopolitical uncertainty — including declining expectations for a near-term Russia–Ukraine peace — is driving a more measured regional outlook.
FX visibility collapses, while HUF becomes both top potential outperformer and underperformer. EUR/HUF’s return to 390–395 and higher oil-driven vulnerability increased dispersion dramatically. HUF and PLN are now tied as expected outperformers (both 30%), but HUF is simultaneously viewed as the most likely underperformer — signaling exceptionally high uncertainty and volatility expectations.
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