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18 August 2026, 08:19 UTC Chief Investment Office GWM Investment Research

Paul Donovan's daily audio: Back up Audio Paul Donovan, Chief Economist, UBS GWM, UBS AG London Branch

The Brent benchmark oil future is back above USD 90 per barrel. The US-Iran truce covered by the “memorandum of understanding” expired yesterday and US President Trump said there is no intention to extend it. Trump also threatened to bomb Oman (again). From an investor perspective, none of this changes the current situation—Iran keeps the Strait of Hormuz effectively closed—but markets’ optimism bias is undermined by the near-term outlook.

Yesterday’s delayed release of China’s economic data showed a rather mediocre economy—retail sales were weaker than even the lackluster consensus forecast. China’s Premier Li has urged officials to offer economic support. One issue is whether the slowdown represents a cyclical drop, or a more accurate reporting of a longer period of slower growth. The latter would be more difficult to resolve.

UK labor market data is due, but quality questions remain around this. Labor market problems have a habit of being revised away (the latest such instance was long-term sickness, which apparently is not a problem in the UK after all).

US import and export price data has lost some of its interest for markets— the assumption is that exports will not offer any offsetting discounts for the new tariffs (the same reaction as with the unlawful tariffs).

Listen to today's 18 August update

This report has been prepared by UBS AG London Branch. Please see important disclaimers and disclosures at the end of the document.

Global asset class preferences definitions The asset class preferences provide high-level guidance to make investment decisions. The preferences reflect the collective judgement of the members of the House View meeting, primarily based on assessments of expected total returns on liquid and commonly known indices, House View scenarios, and analyst convictions over the next 12 months. Note that the tactical asset allocation (TAA) positioning of our different investment strategies may differ from these views due to factors including portfolio construction, concentration, and borrowing constraints. Attractive: We consider this asset class to be attractive. Consider opportunities in this asset class. Neutral: We do not expect outsized returns or losses. Hold longer-term exposure. Unattractive: We consider this asset class to be unattractive. Consider alternative opportunities Note: For equities, we have a five-tier rating system with two additional preferences Most Attractive: We consider this asset class to be among the most attractive. Investors should seek opportunities to add exposure. Least Attractive: We consider this asset class to be among the least attractive. Seek more favorable alternatives opportunities. When equities are included with the other asset classes in the three-tier rating system, we collapse “Most Attractive” with “Attractive” and “Least Attractive” with “Unattractive.”

Appendix Risk information UBS Chief Investment Office's ("CIO") investment views are prepared and published by the Global Wealth Management business of UBS Switzerland AG (regulated by FINMA in Switzerland) or its affiliates ("UBS"), part of UBS Group AG ("UBS Group"). UBS Group includes former Credit Suisse AG, its subsidiaries, branches and affiliates. The investment views have been prepared in accordance with legal requirements designed to promote the independence of investment research. Generic investment research – Risk information: This publication is for your information only and is not intended as an offer, or a solicitation of an offer, to buy or sell any investment or other specific product. The analysis contained herein does not constitute a personal recommendation or take into account the particular investment objectives, investment strategies, financial situation and needs of any specific recipient. It is based on numerous assumptions. Different assumptions could result in materially different results. Certain services and products are subject to legal restrictions and cannot be offered worldwide on an unrestricted basis and/or…