Market rotation and a strong Swiss franc

Macroeconomic update for March 2026

Since the start of the year, global equity markets have risen from their April 2025 levels, supported by a favorable macroeconomic environment, easing monetary policy, the prospect of fiscal stimulus, and continued investment in artificial intelligence (AI). But market dynamics have changed: market breadth has improved, rotations across sectors and styles have accelerated, and value stocks have outperformed. Elsewhere, the Swiss franc’s appreciation is increasingly weighing on Switzerland’s export-driven economy. Its strength has been driven by geopolitical uncertainty, a weaker US dollar, and its role as a safe haven. In the latest CIO Monthly video, the Multi Asset Boutique shares its views on recent market developments and its asset allocation.

  Key Takeaways  

1. Kevin Warsh as new US Federal Reserve chair?
   If confirmed, we believe Warsh would likely be in place by June 2026, potentially opening a new phase of US President Donal Trump’s push for lower rates. 
   
   
2. Broader market leadership
   The broader market leadership change we’ve observed since last summer could continue as the AI theme evolves, with the rotation toward defensive and cyclical value sectors likely to continue over the mid-term. 
   
   
3. Strong Swiss franc 
   For an economy where exports account for more than 70 percent of gross domestic product, the strong appreciation is significant. Large exporters have already pointed to noticeable currency headwinds that could reduce sales growth. 

Even the smallest undertaking starts with a conversation