Effective date: 31/08/2026August 2026 was marked by concerns about the evolution of long-term interest rates. The deadlock in negotiations between Iran and the United States, punctuated by sporadic attacks, led the price of oil to remain volatile throughout the month, with Brent crude finishing at $89 per barrel. The stagnation of energy prices at high levels continued to fuel fears of accelerating inflation and therefore weighed on bond markets. In response to this rise in long-term rates, U.S. Treasury Secretary Scott Bessent announced that Treasury security buybacks on long maturities would be at least doubled for the quarter.
None of the major central banks held a monetary policy committee in August.
The key event of the month from this perspective was the Jackson Hole symposium, where Kevin Warsh appeared reassuring about the labor market but concerned about the inflation trajectory. He gave guidance for the first time in his mandate by saying that the Fed’s attention should currently preferentially focus on price stability. In the eurozone, the ECB minutes suggested that a majority of the Governing Council members would be ready to raise key interest rates in September to contain the effects of rising energy prices. In Japan, several BoJ officials indicated that the central bank should accelerate the pace of rate hikes, with markets now anticipating a strong probability of a hike to 1.25% as early as September.
Bond yields generally increased over the month, especially at the very end after Kevin Warsh’s speech. The U.S. 10-year rate ended the month at 4.74%, its highest level since the beginning of 2025. The German 10-year rate rose significantly, ending the month at 3.30%, its highest level since 2011, due to expectations of ECB rate hikes. And sovereign spreads in the eurozone widened slightly. In Japan, the 10-year rate also increased to 2.92%, in anticipation of BoJ tightening. Finally, gold rebounded strongly, with a 9.6% increase over the month, its best monthly performance since January, supported by interventionist measures from the U.S. Treasury (intervention on the yen and increased Treasury security buybacks).
Equity markets resisted the volatility of oil prices well, supported by a renewed vigor in the theme of artificial intelligence. The S&P 500 recorded several new all-time highs during the month, approaching 7,800 points, before retreating slightly, finishing the month up 2.6%. The Eurostoxx 600 also reached a new record before giving up part of its gains, ending the month up 0.3%. The Nikkei rose 3% over the month, still supported by the semiconductor sector. Finally, the MSCI Emerging also recorded a solid performance (+3.2%), also driven by technology stocks.
Food for Generations posted gains for the month. The agriculture sector rose sharply, driven by a significant increase in grain prices following downward revisions to inventory levels. Agricultural machinery (Agco, Deere) and fertilizer (Nutrien) stocks saw strong gains. The Food Products sector benefited from robust sales momentum in the ingredients segment (Novonesis, DSM Firmenich), which offset declines among producers such as Danone. The Restaurants sector remained stable, as the drop in Compass (contract catering) was balanced by gains at Darden. The Water & Waste sector declined over the month; a drop in industrial stocks (Pentair, Kurita Water) was partially offset by gains in utilities (Severn Trent, United Utilities). The Food Retail sector fell significantly due to a slowdown in US sales growth, which weighed on Ahold Delhaize.
In Food Products, we favor ingredient companies that maintain strong sales momentum as well as producers outside the United States, as the U.S. market remains challenging. In Agriculture, salmon farming should benefit from a rise in selling prices in 2026. While salmon production increased significantly in 2025, its growth is expected to be very limited in 2026, supporting the rise in selling prices. The agricultural machinery market has been declining since 2023. After several months of production decline, inventory levels have normalized. The market has therefore stabilized and should reach its bottom in 2026. The European market is even expected to rebound as early as 2026. This should support this segment in the stock market. In the Water and Waste sector, our main positions are in water treatment companies that should benefit from the need to modernize water networks and improve water quality and recycling.