Global and Luxembourgish News: 2nd February- 22nd February 2026
Weeks 06–08:
Global markets showed signs of renewed confidence as investors poured record capital into equity funds and European stock indices reached historic highs. The surge in fund flows was driven by easing fears over AI disruption, optimism about potential Federal Reserve rate cuts, and strong corporate earnings in defensive sectors. In the U.S., trade policy shifted after a Supreme Court ruling limited executive authority on tariffs, prompting a proposed increase in tariff rates with implications for supply chains and inflation. Within Luxembourg, regulators updated crypto-asset guidance under MiCAR rules, allowing UCITS funds to hold indirect crypto exposure, reinforcing the country’s position as a leading fund domicile adapting to digital asset trends. Meanwhile, the CSSF’s Circular 25/901 clarified the supervisory framework for alternative investment funds, simplifying and modernising guidance for SIFs, SICARs and Part II UCIs. Together, these developments illustrate a period of market adaptation, regulatory evolution and selective optimism as economies navigate policy shifts and technological change.
Luxembourgish News
CSSF Updates Crypto-Asset Guidance for UCITS Funds
Picture: Stock Library
In February 2026, the Commission de Surveillance du Secteur Financier (CSSF) updated its crypto-asset guidance, clarifying that UCITS funds may now hold indirect crypto exposure of up to 10% of net asset value, reflecting harmonised European MiCAR rules. This change allows “mainstream” regulated investment funds , which are widely used by retail and institutional investors, to include digital assets like ETFs and ETPs within strict eligibility criteria. The development aligns Luxembourg with broader EU regulatory trends and supports the gradual integration of digital assets into traditional portfolios. Market participants view this as a significant step in opening regulated fund channels to crypto exposure while preserving investor protections.
Fun Fact:
A UCITS fund is a tightly regulated investment vehicle popular across Europe. Hence, allowing up to 10% crypto exposure signals institutional acceptance of digital assets.
Source: 21shares
CSSF Circular 25/901 Clarifies Fund Supervisory Framework
Picture: Stock Library
The CSSF’s updated Circular 25/901 consolidates and simplifies the regulatory framework for alternative investment funds, covering SIFs, SICARs and Part II UCIs, and replacing a range of outdated guidance. Key changes include recalibrated prudential limits based on target investor bases and harmonised supervisory practices, enhancing transparency, predictability and investor safeguards. The Circular also formalises risk-capital and concentration metrics, aligning supervisory expectations with current market practices. Fund managers welcomed the clarification of long-standing uncertainties, particularly around risk measurement and concentration methodologies under the AIFMD regime. These changes contribute to Luxembourg’s reputation as a sophisticated fund jurisdiction with high regulatory standards.
Fun Fact:
Prudential limits help ensure funds manage concentration and leverage risks, protecting investors and financial stability.
Source: GoodWinLaw
Global News
Global Equity Funds See Strong Inflows as AI Fear Eases
Picture: Stock Library
Global equity funds attracted the largest inflows in five weeks, with about $36.3 billion invested during the week ending 18 February, as investor concerns around AI-related market disruption eased and confidence in potential Federal Reserve rate cuts grew. European equity funds led with $17.2 billion inflows, supported by robust performance in the STOXX 600 index. U.S. and Asian funds also drew significant assets, while global bond funds recorded a seventh consecutive week of inflows, emphasising risk-off positioning and diversification. Investors favoured industrials, metals & mining, and technology, with some shifting away from precious metals. Market strategists note that although optimism is returning, valuation risks remain amid uneven earnings prospects.
Fun Fact:
Equity fund inflows of $36.3 billion represent the largest weekly increase in five weeks, often signalling renewed investor confidence
Source: Reuters
European Stocks Rally as STOXX 600 Reaches Record High
Picture: Stock Library
European stocks closed at a record high on 18 February, with the STOXX 600 index rising 1.2%, driven by strong corporate earnings and gains in defence and banking sectors. BAE Systems posted a notable rise after reporting robust annual results, while banking stocks rebounded following earlier volatility tied to AI fears. The ECB leadership outlook also attracted investor attention as discussions emerged around potential succession plans. Global geopolitical tensions, including renewed concerns in Eastern Europe and the Middle East, underpinned defence demand and market interest in defensive sectors. Analysts caution that while valuations have reached new highs, underlying economic indicators suggest mixed momentum that investors will monitor closely.
Definition:
A record stock index like the STOXX 600 signals widespread market confidence but often precedes volatility when economic fundamentals diverge.
Source: Reuters
U.S. Tariff Policy Shifts After Supreme Court Ruling
Picture: Stock Library
The U.S. Supreme Court ruled that the administration exceeded its emergency authority in imposing sweeping tariffs, prompting President Trump to announce plans to raise global tariff rates from 10% to 15% on certain goods. This follows legal pushback against prior tariff authorities and reflects ongoing tensions in trade policy. Businesses affected by previous tariffs are seeking repayment of estimated $133 billion collected to date. World leaders and trade partners reacted to the announcement, with calls for transparency and concern about the impact on global supply chains and inflation. The policy shift highlights how trade tensions continue to shape market expectations and cross-border investment flows.
Fun Fact:
Tariffs affect GDP growth by raising consumer prices and disrupting supply chains, with higher rates often slowing import volumes and trade activity.
Source: Al Jazeera
