Extreme heat, wildfires and drought conditions across Europe and North America highlight the growing impact of climate change.
Developing El Niño conditions could make 2027 a record-hot year, while current emissions trends point to significantly warmer temperatures by 2100.
Capital will be needed to scale clean-energy technologies and support sectors helping communities adapt to a changing climate.
We are seeing extreme climatic conditions but 2027 could be even worse. The trend looks set for a 3.5-4.2°C change by 2100. This suggests we need massive mitigation and adaptation spending.
Hot, Hot, Hot (borrowed from The Merrymen) could describe the situation in the Middle East. The Brent first futures price has risen back to near $100, bond yields are up, the dollar is strengthening and stock markets are down. However, implied volatility indices such as VIX and MOVE suggest there is little panic. We are monitoring the situation but still expect global economic resilience and stick with our preference for cyclical assets. However, that could change if the Strait of Hormuz and Red Sea remain closed into Q4.
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