AI, biotech and safe havens in focus

Summary

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Moving Markets – "AI, Biotech and Safe Havens in Focus"

Podcast: Moving Markets, Julius Baer
Host: Helen Freear
Date: August 7, 2026

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Overview

This episode of Moving Markets provides a comprehensive look at significant shifts in global financial markets, with special focus on the impact of AI investments, developments in biotechnology and genomics, and the status of safe haven assets like gold and the yen. Julius Baer’s expert team breaks down recent market moves, sector trends, and the lasting importance of innovation ecosystems in biotech. The discussion culminates with detailed insights on currency and metals markets, exploring both current dynamics and forward-looking strategies for investors amid ongoing global uncertainty.

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Key Discussion Points & Insights

1. Global Equity Markets Review

Guest: Mike Rauber
[00:41–06:39]

• European Markets:

  • The Stoxx 600 briefly reached a record high before closing largely unchanged, with media and telecom outperforming.
  • Standout: Deutsche Telekom up 7% post-earnings, Diageo +5% on earnings, Hermes +5% on recovery in luxury.
  • Investor sensitivity to earnings disappointments evident: Rheinmetall, Siemens, Zurich Insurance all fell 3–4%.

  “Investors are punishing earnings disappointments. Rheinmetall, Siemens and Zurich Insurance all fell between 3 and 4%.” – Mike Rauber [01:13]

• US Markets:

  • Dow Jones ended a five-day rally, falling 0.9%, dragged by Salesforce, Boeing, and UnitedHealth.
  • The NASDAQ saw slight losses due to weaker-than-expected results from Sandisk and Western Digital (down 7% and 13%, respectively), though the broader semiconductor sector showed resilience.

• Capital-Raising for AI Expansion:

  • Alphabet (Google) plans up to $25 billion in new bonds for AI investment, with remarkable $115B in demand despite a higher yield to attract investors.

  “The key question is whether investor demand remains strong for AI related debt. Now the short answer is yes.” – Mike Rauber [02:24]

• Geopolitical Concerns:

  • Middle East uncertainty persists with Iran threatening to bar US and Israeli vessels from the Strait of Hormuz.
  • Brent crude up 1% to $83.40; US treasury yields rose as higher energy prices reignite inflation fears.

• Asia Pacific:

  • Japanese yen loses nearly half its intervention gains; consumer spending in Japan falls by 3.3% in June.
  • China’s exports and imports both surge over 20% year-on-year, mainly driven by AI technology; the trade surplus with the EU hits a record $33.8B, highlighting rising European industry concerns.

  “China's trade surplus with the European Union widened to a record $33.8 billion over the months, probably adding to European concerns about import competition and industrial competitiveness.” – Mike Rauber [04:13]

• Commodities:

  • Gold is testing $4,300 per ounce (below this year’s highs).
  • Copper rebounds 14% year-to-date, driven by US tariff fears and long-term demand for electrification and infrastructure.

  “Copper has gained 14% so far in 2026. The bulls argue that its strength is underpinned by growing demand for electrification and infrastructure linked to the energy transition.” – Mike Rauber [04:44]

• Macro Watch – US Labor Market:

  • Today’s nonfarm payrolls report is pivotal for Fed rate expectations, with projected employment growth cooling. Any surprise could trigger significant market volatility.

  “A significant surprise in either direction could materially shift market expectations for the Fed's next policy moves and drive volatility across bonds, equities and the US Dollar.” – Mike Rauber [05:53]

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2. Innovation Ecosystems in Biotech & Genomics

Guest: Damien Ng
[06:43–09:07]

• Biotech's New Growth Phase:

  • The industry is entering a boom, with global medicine spending expected to top $2.3 trillion by 2028.
  • Long-term competitiveness depends increasingly on strong innovation ecosystems, rather than scientific advances alone. Success requires collaboration between research, healthcare, capital, and big pharma.
  • Switzerland cited as a model for its university and pharma-linked biotech environment.

  “Companies need ecosystems that connect research institutions, healthcare providers, investors and pharma companies. Switzerland demonstrates this very well…” – Damien Ng [07:17]

• Genomics – Opportunities and Risks:

  • Genomics drives personalized therapies but drug development remains risky and expensive ($2B+ per new medicine).
  • 90% of drug candidates fail in trials. Institutional support and ecosystem connections can boost chances of commercial success.

  “The average cost of bringing a new medicine to market now exceeds US$2 billion. And roughly 90% of drug candidates entering clinical trials never reach commercialization.” – Damien Ng [08:23]

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3. Currencies and Metals Markets Update

Guest: Tim Gagy
[09:12–13:39]

• Gold:

  • Gold broke above the $4,200 barrier, likely to continue higher as buyers return.
  • The next major technical target is the 200-day moving average at $4,500.

  “We went through that 4,200 resistance without too much trouble at all. So now I rather expect to see buyers returning to the party.” – Tim Gagy [09:22]

• Japanese Yen & US Intervention:

  • US intervention in FX markets is significant as the US can print unlimited dollars, implying interventions may be ongoing.
  • Market may go sideways for now, but further action is possible—yen traders should consider protective options ahead of September’s key central bank meetings.

  “It does also maybe change the outlook, because if it's the US intervening, well, they can print unlimited dollars. So now you no longer have this issue of staying the course.” – Tim Gagy [11:17]

• US Dollar and Other Currencies:

  • No broad dollar weakness; expectations for the Fed still volatile.
  • Strategy: continue to trade ranges, favor higher yielding currencies like AUD, and be alert for metals-driven market focus.

  “Market’s attention might be a bit more on metals at the moment, which in what is still a summer market might also leave [FX] a bit sidelined.” – Tim Gagy [13:14]

• Memorable Moment:

  • Tim ends with a pun:

    “What weighs more, a litre of water or a litre of butane?”
    “Water, butane is a lighter fluid.” – Tim Gagy [13:34]

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Timestamps for Key Segments

• European/US Market Recap – 00:43 to 06:39
• AI Financing & Market Demand – 02:12 to 02:53
• Middle East Tension, Commodities – 02:53 to 05:09
• China/Asia Macro & Trade – 03:31 to 04:27
• Biotech/Genomics Focus – Damien Ng – 06:43 to 09:07
• Gold, Yen, Currencies – Tim Gagy – 09:12 to 13:39

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Notable Quotes

• Mike Rauber:

  “The offering saw demand of roughly $115 billion, not far behind the record demand for Oracle's debt back in February.” [02:33]

• Damien Ng:

  “Switzerland demonstrates this very well, attracting biotech investment through its world class universities, specialized talent, strong pharma sector and tradition of innovation.” [07:20]

• Tim Gagy:

  “With metals it is easier to buy into strength than into weakness.” [09:31]

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Summary

This episode delivers critical context on the forces shaping today’s financial markets: AI’s surging investment needs and investor demand, the foundational role of ecosystems in biotech’s future, and the search for stability in traditional safe havens amid persistent geopolitical and economic uncertainty. The expert guests provide actionable perspectives for navigating volatility, identifying opportunity, and understanding the deeper currents of change across sectors and asset classes.

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Transcript

[A]

Good morning everyone and welcome to Julius Baer's Moving Markets Podcast. It's Friday 7th August and my name is Helen Freear. My first guest this morning is Mike Rauber and he'll be giving us a roundup of the latest news in financial markets. I will then talk to Damien Ng about how long term competitiveness in the genomics industry is often shaped by institutions and ecosystems rather than just technology. And then lastly, I'll be catching up with Tim Gagy who has his weekly updates for us on what's been happening in currencies and metals markets. But first up with the market news it is Mike. Good morning Mike. Thanks for joining me.

[B]

Good morning Alan.

[A]

The pan European Stoxx 600 briefly hit a record high yesterday before closing. Little change as Wall street failed to provide support. Media and telecom stocks outperformed. Deutsche Telekom rose 7% after its earnings release. Any other stocks to mention, Mike?

[B]

Yes. So the spirit maker Diageo was another standout performer gaining over 5% following its earnings release. But note Helen, investors are punishing earnings disappointments. Rheinmetall, Siemens and Zurich Insurance all fell between 3 and 4%. We also saw some strength in luxury names, led by hermes, up nearly 5% after a broker report noting that the luxury slowdown appears to be over.

[A]

And Turning to the U.S. the Dow Jones snapped its five day winning streak falling 0.9% after opening higher losses in Salesforce, Boeing and UnitedHealth all weighed on the index. What else was driving U.S. equities yesterday?

[B]

The NASDAQ. It closed slightly lower, weighed down by declines in semiconductor companies Sandisk and Western Digital. Their results fell short of elevated market expectations, sending their shares down 7% and 13% respectively. But semiconductor weakness was not. Broad based. Microderm technology ended just 1.3% lower after falling more than 7% at the Open.

[A]

Alphabet is looking to raise up to $25 billion through a new bond offering to help fund its AI investments. So what's the market focusing on here?

[B]

The key question is whether investor demand remains strong for AI related debt. Now the short answer is yes. The offering saw demand of roughly $115 billion, not far behind the record demand for Oracle's debt back in February. But Alphabet did have to offer the new debt ad spread of as much as 0.4 percentage point out above existing Alphabet debt to lure investors to the new offering, Bloomberg reported yesterday.

[A]

European and US equities were held back by the ongoing uncertainty in the Middle East. Now in the latest developments, Iran signaled it could bar US And Israeli vessels from the Strait of Hormuz. How did markets respond to this?

[B]

So in trading yesterday, Brent crude rose more than 1% to $83.40 a barrel. Treasury futures edged lower. Higher energy prices revived concerns that the US Fed may keep interest rates elevated, leaving the 10 year treasury yield at 4.68% after a 7 basis points rise during the US session.

[A]

Let's talk about Asia now. And after a volatile week, the moves in the main equity markets have been muted today. Anything notable to mention this morning from the region?

[B]

In fx, the Japanese yen is heading into the end of the week having surrendered nearly half of its joint US Japan intervention drill driven gains. And in economic data releases, data showed that inflation adjusted consumer spending dropped 3.3% in June.

[A]

And we also received July export import figures from China, right?

[B]

Absolutely. So exports and imports rose more than 20% year on year, driven by strong AI related technology demand. What caught my eye? China's trade surplus with the European Union widened to a record $33.8 billion over the months, probably adding to European concerns about import competition and industrial competitiveness.

[A]

In commodities, gold is testing $4,300 an ounce, but remains below its record high from earlier this year. Copper meanwhile, has rebounded strongly from its recent weakness and is nearing a fresh record close. What can you tell us here, Mike?

[B]

So the story is that large volumes of metal have been shipped into the US this year ahead of President Donald Trump's decision on import tariffs, drawing supplies away from monitored warehouses around the world. Copper has gained 14% so far in 2026. The bulls argue that its strength is underpinned by growing demand for electrification and infrastructure linked to the energy transition.

[A]

All right, and today investors will be closely watching the non farm payrolls report with Fed Chair Kevin Walsh offering limited guidance on the policy outlook. How important will today's labour market data be in terms of interest rate expectations?

[B]

Very important is the short answer. This afternoon's nonfarm payrolls and average hourly earnings data will be closely watched by investors. Now consensus expects payroll growth of 80,000, down from the three month average of 111,000. Now such an outcome would point to a further cooling in the labor market and reinforce the view that employment is not adding to inflation pressures. But overall, a significant surprise in either direction could materially shift market expectations for the Fed's next policy moves and drive volatility across bonds, equities and the US Dollar.

[A]

All right, so we will see later. And what else is coming up today?

[B]

Not too much economic wise to add one Swiss consumer Confidence figures and earnings season is slowing down now. But today we have the German heavyweights of Allianz and Munich Gris both beating expectations. What I could see. And Porsche holdings. And lastly, equity futures point to a muted start of to the day. But let's see what the US payroll figures bring.

[A]

Great. Thank you very much, Mike. Great to have you on the show again today.

[B]

Thank you so much for having me.

[A]

Right over to you. Damien, good morning and welcome back to the podcast.

[C]

Good morning, Helen, and thank you very much for the invitation.

[A]

So we're talking today about innovation ecosystems in the biotechnology space. Why are these becoming so important in terms of success in the industry?

[C]

Right. The biotech industry is entering a period of strong growth with global medicine spending projected to exceed US$2.3 trillion by the year 2028. As the market expands, success depends on more than scientific breakthroughs alone. Companies need ecosystems that connect research institutions, healthcare providers, investors and pharma companies. Switzerland demonstrates this very well, attracting biotech investment through its world class universities, specialized talent, strong pharma sector and tradition of innovation. While smaller biotech firms generate around 70% of the industry's drug pipeline, they often rely on partnerships and licensing agreements to bring new medicines to patients.

[A]

Genomics is often highlighted as a major breakthrough area in healthcare. What does it tell us about both the opportunities and the challenges of bringing new therapies to market?

[C]

Excellent question, Helen. Genomics illustrates both the enormous potential and the significant challenges of healthcare innovation. Advances in sequencing technologies and precision medicine are creating new opportunities to improve patient outcomes. But developing a new therapy remains costly and high risk. The average cost of bringing a new medicine to market now exceeds US$2 billion. And roughly 90% of drug candidates entering clinical trials never reach commercialization. Companies operating within strong innovation ecosystems can access funding, regulatory expertise, development capabilities and commercial partnerships, improving the chances of turning scientific discoveries into successful therapies.

[A]

Wonderful. Thank you, Damian. Really interesting. Thanks a lot for joining me today.

[C]

Thank you very much, Helen. Thank you.

[A]

And now over to you, Tim. Good morning.

[D]

Good morning, Helen.

[A]

So, after a long wait, we finally saw a meaningful move higher in gold. Where do we go from here?

[D]

Here. Yes, indeed. Wednesday's rally finally shook gold out of its very narrow range. Last week we said that we felt the range was so narrow it was really hard to see it lasting. And that 4200 would be the key level to break. And actually we went through that 4200 resistance without too much trouble at all. So now I rather expect to see buyers returning to the party. Our trader in Singapore has always said that with metals it is easier to buy into strength than into weakness. I mean, obviously somebody has to start, but especially after the depth of the sell off we suffered earlier this year, I think investors would really want to see some stability and strength and be quite happy therefore to miss out on the first few hundred dollars of a move that they believe is a bit more durable. Then the other question is always, is one of positioning. And we think most of the much higher longs are probably at least partially stopped out already or they're just something that investors are willing to sit on so they don't think there'll be too many people looking to sell into this rally to get out of unpleasant positions higher up. So I would expect gold a bit to build on this strength and gradually find its way higher. The 200 day moving average at 4,500 is still a little way away, but we're over halfway there from where we were earlier in the week. And this will now be the big target in everyone's mind. And honestly, I think we will get there at some stage.

[A]

We talked about the yen last week, but has your view changed at all after the announcement of U.S. treasury involvement?

[D]

Yeah, I mean, for ages, and I've even said it as recently as last Friday, I've hung onto this view that FX intervention to strengthen a currency is a waste of money without a change to the monetary policy that's creating that currency's weakness in the first place. So for a country to strengthen its own currency, it needs to sell foreign currency, which either comes from FX reserves or, or by selling instruments in that currency. Obviously this is why the US decided to get involved, to prevent the Japanese ending up selling lots of U.S. treasury bills. Setting aside the rights and wrongs of a country, the US who had a list of currency manipulators intervening in the currency of another country to prevent that country having to sell US debt. It's a quite big thing to set aside, but we will. It does also maybe change the outlook because if it's the US intervening, well, they can print unlimited dollars. So now you no longer have this issue of staying the course. We haven't really seen any follow up this week, but I don't think we're out of the woods yet. Interventions anyway tend to happen at the moment of lowest liquidity for maximum impact and we will definitely have no warning. It'd be a bit weird for the US to get involved once and then walk away. It doesn't really make sense. So maybe now we just go a bit sideways. Wait for the next bank of Japan meeting, I don't know, but in the meantime I wouldn't rule out further interventions and I think if you have big yen shorts, I would consider buying an option to protect yourself out past the next Fed and Bank of Japan. In the middle of September we might

[A]

have expected the dollar to weaken more generally with these moves in precious metals, but this hasn't really been the case. Do you think it's going to catch up?

[D]

No, not really. I mean, I think once again the expectations of dollar weakness are a bit overdone. Clearly the market was a bit too long dollars going into the Fed last week, but that made sense. There was a possibility, albeit a small one, of a hike. So now we've adjusted 55% chance of a hike in September for the Fed, but this can all move very fast in either direction. I still believe we don't have the full inflation picture and I wouldn't be complacent on the Fed being either deciding to or being forced to take further action later this year. So I still think we'll be directionless in euro, dollar, cable, so forth. And given the interest rate outlook for the different central banks, I rather also expect the Swiss franc to somewhat underperform, especially considering that it is still rather on the strong side. If you take a bit of a step back, I still think you need to play the ranges in the majors and I prefer to favor the higher yielding currencies, Aussie, etc. As usual. I also do suspect the market's attention might be a bit more on metals at the moment, which in what is still a summer market might also leave ethics a bit sidelined. Finally, Helen, what weighs more, a litre of water or a litre of butane?

[A]

I don't know.

[D]

Water, butane is a lighter fluid.

[A]

Very good. Thank you Tim. Great to speak to you as always. So that is all for today. Thank you again to my guest this morning and thank you all for tuning in. Please subscribe to our show if you enjoy it and you can of course also leave us a review of on whichever platform you like to listen on. So we'll be back again on Monday morning. Do join us then when Mike will be back but as your host and he'll be joined as always by more of our colleagues to talk about what is moving markets. But until then I wish you all a great day and then a great weekend. Bye for now. The information and opinions expressed in this podcast constitute marketing material and are not the result of independent financial or investment research. Please refer to www.juliusbear.com legal podcasts for further Other important legal.