E.g., 19-10-2018
E.g., 19-10-2018
We have found 1763 results.
View by: Grid List
Sort by: Relevancy Date
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Hong Kong Seminar — February 2017

    Gavekal’s global macroeconomic seminar in Hong Kong in February featured Anatole Kaletsky, Will Denyer and Louis-Vincent Gave. They presented on the global investment outlook under a Trump presidency, the decline in US productivity, and the sustainability of the "Trumpflation" rally.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A Methodology For Playing The Eurozone Bond Markets

    In yesterday’s Daily, I argued that a long position in the French CAC 40 stock index, locally funded, versus a short position in Germany’s Dax offers investors a neat “heads I win, tails I don’t lose” hedge against a possible break-up of the euro driven by French politics (see It’s Time To Buy French Equities).

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Italian Debt Trap Jaws Tighten

    In the middle ages Venice thrived as the economic, artistic and intellectual leader of the Mediterranean. By 1500 it was in retreat, but the roots of that decline dated to a 1286 decision by the city state’s governing council to vest power in the hands of 40 great families which dominated the trading economy. The cycle of innovation that had driven the “Queen of the Adriatic” ebbed as special interests gradually captured the system.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    It’s Time To Buy French Equities

    As regular Gavekal readers may remember, I have always maintained that over the long run the returns delivered by two different stock markets— adjusted for exchange rate fluctuations and differences in pay-outs—must be the same. This is just another way of saying that in an open economy the returns on invested capital generated by well diversified stock markets have to be the same.

    6
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Eurozone’s Silver Lining

    Just as it has been hard to work up much excitement over the last couple of years about the eurozone’s grinding emergence from economic despond, so investors should not be too downhearted at the latest lackluster growth data. Yesterday Eurostat revised down its flash estimate for 4Q2016 eurozone GDP growth to 0.4% QoQ, compared with its advance estimate of 0.5% released two weeks ago. The downward revision was due mainly to weaker than expected...

    3
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    In Dutch With The Electorate

    There is a tendency to divide Europe into the “serious” beer drinkers of the north and the not so serious wine tipplers of the south. Using such a dichotomy reinforces a common assumption that trouble in modern day Europe always arrives from the Mediterranean regions. It explains why there is a cottage industry of politicos watching developments in Italy, Spain, France and Portugal, while precious little energy is expended on political goings on...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Choosing Between Disadvantages

    It was a record that Germany would rather not have announced, at least not this week. Yesterday official data showed that Europe’s über exporter racked up a current account surplus in 2016 of US$281bn versus a mere US$210bn for China. With the US running by far the largest offsetting deficit, such data means that the temperature between Washington and Berlin is likely to get hotter.

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Germany And The Greek Question

    Last month Cedric Gemehl and I argued that the new geopolitical back-drop offered by Donald Trump had changed the basic strategic equation for Germany. Berlin could respond by doubling down on its mercantilist impulses, or alternatively embrace its eurozone partners. An interesting test case of our hypothesis has just arisen: yes, the Greek problem is back on the agenda.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The End Of The European Dream

    Back in 2002 I wrote a book, Lions Led By Donkeys, whose main point was that the euro’s adoption would kill the competitive and heterogeneous Europe that I so loved. It was prefaced by Milton Friedman who predicted that Europe was set to enter a period of rigor mortis. Fifteen years on and it is clear that Europe as a unitary concept is indeed dying.

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Eurozone Upturn Continues

    The data flow out of the eurozone—both forward and backward-looking—continues to paint a picture of accelerating activity, subdued core inflation, ongoing monetary accommodation, and—most notably for investors—improving corporate earnings.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Real Political Risk In France

    There are many areas where Anatole and I agree to disagree. But one in which the two of us see eye to eye is the heightened influence political risk may have on markets this year. Consider France, where the political situation threatens to get complicated. The problem is not so much the presidential election, due to be held in two rounds in April and May, but the legislative elections set to be held a month later.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Points Of Agreement And Dissent

    Last week Louis laid out his roadmap for navigating financial markets in 2017. In this follow-up, Anatole picks up on five debating points, and details where and why he agrees or disagrees with Louis.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The “Experts” May Yet Be Right

    Last week Louis set out a comprehensive roadmap for 2017. I have just five points to add: two points of strong agreement (on Europe and the oil price); two of dissent (on US bonds and Britain); and one that echoes Louis’s uncertainty and anxiety, but for slightly different reasons (about the pressures on the US dollar and what they could mean for emerging markets). I will explore these specific issues of agreement and dissent in a lengthier...

    3
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Drawing Meaning From 2016, And A Roadmap For 2017

    Having experienced a rough 2016, the temptation for most investors is to clean the slate and start again. Unfortunately, life in financial markets does not allow for such neat endings. In one of his biggest reports in years, Louis argues that after such a complex and tumultuous year, it is essential for investors to draw a breath and derive some understanding of what just happened. Only then should they try to sketch out future scenarios.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Return Of German Inflation

    Inflation is re-emerging in Germany, and a tightening labor market implies inflationary pressures will continue to mount in what could promise to become the great German reflation that many have long looked for to rebalance the eurozone economy. Yet rising inflation threatens to erode one of the central tenets of the German economic model.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Germany’s Date With Destiny

    Germany, more than any other European economy, has relied on the US-dictated, rules-based international system to define its post-World War II identity. Germany’s highly specialized export-orientated economy has thrived within the World Trade Organization and its security has been ensured by the American nuclear umbrella. It is not clear whether Donald Trump’s recent broadside against Berlin reflects a permanent rupture in that order, but...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Hard Brexit Means Soft Sterling

    Since the June referendum the only real choice for Britain has been Hard Brexit or No Brexit. The No Brexit option disappeared as soon as Theresa May became prime minister under the slogan “Brexit means Brexit”. Barring some deus ex machina that swept May out of power, that left only one possibility: a rock-hard Brexit.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Audio & Transcript — Gavekal Research January Call

    Charles Gave argued that Donald Trump’s protectionist policy could lead to a breakdown of the post-1971 fiat money system that is based on a US dollar standard. Will Denyer deconstructed the likely workings of a new trade taxation regime in the US and explained what that means for currencies. Arthur Kroeber outlined the likely Chinese response to a US trade broadside and argued that Beijing was decently well placed to weather the attack.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Video: A Coming US-China Trade War?

    In this video interview Arthur explains how a US-China trade war may play out and the implication for capital outflows from China

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Video: The Dissonance In US-China Relations

    Once Donald Trump occupies the White House he is sure to take aim at China in the form of new tariffs, anti-dumping actions and the labeling of the country as a currency manipulator. What is unclear is whether such actions reflect a tough negotiating stance, or instead a fundamental shift in the strategic equation. In this video interview, Arthur explains why the mixed messages coming out of Washington have the potential to spark a dangerous...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Political Fiction

    European economic indicators have turned up in recent months, causing many investors to conclude that the eurozone’s banishment in the desert of economic stagnation is over, and the promised land of a normal recovery beckons. I am not convinced and judging by recent moves in the bond market, I’m wondering if the next eurozone crisis is already upon us.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A Very Turkish Mess

    Get into a taxi in Rio de Janeiro, Jakarta or Cape Town, and ask for that day’s US dollar exchange rate, and the chances are that the driver will know the answer to within a decimal point. Try the same thing in Tokyo, London or Berlin and you will likely receive a blank stare. My anecdote reflects a simple reality: most people in emerging markets think in two currencies: their own and the US dollar. This highlights most emerging market consumers...

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Firing On Three Cylinders

    The upturn in the eurozone continues to gain momentum. The recovery in France which long has been among the European economy's laggards, coupled with brisk activity in Germany and Spain, suggests that the eurozone is now firing on three of its four main cylinders in a cyclical upswing that promises to become self-sustaining.

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A Higher Headline CPI Does Not Spell ECB Tapering

    According to the financial media, eurozone inflation is “soaring”. The initial estimate released yesterday showed that consumer price index inflation picked up to 1.1% year-on-year in December, from 0.6% the previous month. That is the fastest rate since 2013. What’s more the rise occurred against a background of generally accelerating economic activity. In December, the eurozone composite PMI ticked up to 54.4, its highest reading since May...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Crisis Of Market Fundamentalism

    After 2008, the prevailing market fundamentalism forbade political interventions that could have shared the benefits of capitalism while mitigating its costs to specific people. The result was a post-crisis confusion and disillusionment whose political effects we witnessed last year—and which has not yet ended.

    9
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A €20bn Start In Italy

    Yesterday the Italian government said it would seek the permission of parliament to raise €20bn in new debt to fund the recapitalization of the country’s weakest banks. Although Italy’s politicians had been earnestly hoping to avoid overt state involvement in bank restructuring, this could well turn out to be a positive development. Coupled with encouraging progress towards the private sector clean-up of Italy’s biggest bank, a well managed...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Dollar Surge Continues, For Now

    Louis likes to say that the foreign exchange market is a serial monogamist. At any one time, the market is faithful to a single idea. The trouble is that at any moment it is liable to switch the object of its affections. Right now the foreign exchange market is clearly still smitten by the Trumpflation trade. Following the US Federal Reserve’s decision earlier this week to raise interest rates, yesterday the US currency’s DXY index climbed to...

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Our 2016 Holiday Reading List

    “All books are divisible into two classes,” said John Ruskin, “the books of the hour, and the books of all time.” This year’s list of works enjoyed by Gavekal staff in 2016 includes books from both categories; among them are an account of Russian nationalism, an examination of the sharing economy, and a look at the future of Japan. Happy reading.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Between A Rock And A Hard Brexit

    Sterling has gained almost 7% against the euro this month, partly because of comments from British ministers hinting at a softer version of Brexit than the sharp and rapid break implied by Theresa May’s early speeches. For example, sterling’s rebound through US$1.25 and from £0.90 to the euro was directly caused by a parliamentary answer from David Davis, the minister in charge of Brexit, suggesting that Britain might continue to make...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    For The ECB, Less Really Is More

    Mario Draghi and his colleagues in the European Central Bank had a difficult line to tread yesterday. On one hand the ECB president faced pressure to wind down his program of quantitative easing. On the other, lingering risks in Europe’s periphery argued for a continuation of ECB asset purchases in order to avoid rocking the financial boat heading into next year’s packed political calendar.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Audio & Transcript — Gavekal Research December Call

    Louis and Anatole outlined their views on the new investment environment. Louis focused on the apparent contradictions in investors’ reaction to Donald Trump’s win in the US presidential election. Anatole argued that the US has almost certainly transitioned to a more inflationary growth path, but said it would be a slow build-up.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Putting The Boot Into Italy

    Matteo Renzi has joined a long line of Italian prime ministers who failed to “reform” their country. This is another way of saying that he could not wave a magic wand and make Italy competitive with Germany. The grim reality is that no Italian leader stood a chance of changing their country once the fateful decision was made to peg its currency to Germany’s. At the time of the euro’s launch in 1999, I argued that the risk profile of Italy would...

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Assessing EMs Vulnerability To The Trump Trade

    Emerging markets have faced selling pressure since Donald Trump’s US presidential election win started to drive treasury yields higher. EM debt funds saw their largest ever outflow the week after the election, while currencies have fallen on fears of trade protectionism and more talk of the US dollar being primed for a 1980s-style super-spike. Given this basket of worries, Joyce revisits her “emerging market relative balance sheet vulnerability...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Cost Of Italy’s “No” Vote

    Europe lurched another step towards the eventual break-up of the eurozone yesterday, when the Italian electorate rejected constitutional reforms that would have broken the country’s legislative logjam, allowing much-needed economic restructuring. For European policymakers, the simultaneous rejection across the Alps of far-right candidate Norbert Hofer in Austria’s presidential election was small consolation. Hofer’s defeat shows that the...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    How Bad Is The Dollar Squeeze?

    This has not been your regular dollar squeeze. Over the last month, the cost of obtaining US dollars offshore has soared to levels last seen in “crisis” periods, yet bank equities have rallied the most in six years. Rather than a new crisis unfolding, we seem to be transitioning to a macro environment where dollars are structurally scarce. This will be challenging for weak link economies, as shown yesterday by adverse market moves in Brazil and...

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Something's Gotta Give

    Louis Gave held a conference call on December 6 where he discussed the state of global markets as the US gets ready for a Trump presidency. The fundamental challenge for investors is that while equities and the US dollar have rallied strongly and bonds have sold off in a “Trump reflation trade,” it is not clear how long that trade can withstand the reality of Trump’s economic program.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Gavekal Monthly: Preparing For The Trumped-Up Economy

    Markets have been on a startling trajectory since Donald Trump upended investors’ assumptions with his win in the US presidential election. In this issue of the Monthly two Gavekal partners ask whether the macro environment really has fundamentally shifted due to the emerging policy platform of the president-elect.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Italy Down To The Wire

    In Italy “less is more” when it comes to opinion polling in the final days of an election campaign, hence the last formal snapshot of voting intentions in Sunday’s constitutional referendum was released on November 18. That poll put the “No” camp squarely ahead by 55% to 45%, which if born out would likely spark the resignation of Matteo Renzi, Italy’s pro-reform prime minister. Still, nature hates a vacuum and the ban on formal polling is...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Polls, Big Data And The French Primary

    It’s been said that big data is like carnal knowledge in teenage boys’ locker rooms: everyone talks about it, but noone really knows much about it. A slew of election results in the last few years supports such a viewpoint, for in an age when everything can supposedly be measured, political forecasts have been proven hugely flawed—the UK general election in 2015, the Brexit vote, the Colombian peace-process referendum, Donald Trump winning the...

    8
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Rally In European Banks

    More than four months after it bottomed out one and a half standard deviations below its 200-day moving average, the Euro STOXX banks index has rallied 34% and is once again trading at the levels it was at immediately before the summer’s steep post-Brexit losses. Yet despite the rebound the index remains down -18% year to date, and with a clutch of the factors that precipitated the initial sell-off—notably negative interest rates, shaky capital...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Lady Is Not For Turning

    As she kicked off her general election campaign this week, Angela Merkel declared that Germany “had never had it so good”. The economy is humming so nicely that Germany’s council of economic advisors recently warned about overheating. This would seem to rule out a fiscal stimulus, which conflicts with Brussels’ policy of engineering a more expansionary fiscal environment.

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Austerity Lingers In Britain

    Rumors of the death of fiscal austerity are greatly exaggerated, at least in Europe. That is the most important lesson for global markets from the UK Treasury’s long-awaited budgetary response to the Brexit vote. Many investors believed in the immediate aftermath of the British referendum that this shock might be the catalyst for more expansionary fiscal policies all over the world. In the past two weeks, the prospect of a Trump fiscal stimulus...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Italian Domino Teeters

    My thesis has for a while been that we are living in an era characterized by the “little man” revolting against the global elite. I explained this idea in May using the perhaps apocryphal tale of a South Pacific island made up of home-loving tree dwellers and more adventurous boat travellers (see Trump And The Tree People). The point was that the normally laid back people of the trees were stirring from their torpor as shown by the Brexit vote...

    8
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Video: European Political Dominos

    In the aftermath of the Brexit vote and Donald Trump’s win in the US presidential election, attention has shifted to the eurozone with the assumption that more dominos must topple under the gathering populist political wave. In this video interview Nick considers the good, the bad and the ugly of the European political scene and offers pointers for navigating these risks.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Better Late Than Never

    When Brussels officials admitted in May that there was scope to loosen Europe’s fiscal straitjacket, this seemed like an expedient measure so that counties could breach their deficit limits without being penalized (see Fiscal Rules Are There To Be Broken). It is now clear that this shift was more than a one-off accommodation and the policymaking ground has moved. Yesterday the European Commission updated its view on state spending with a...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A Trumpian Europe?

    Donald Trump’s win in the US presidential election has emboldened populist movements in continental Europe and raised the specter of a similar anti-establishment electoral wave taking hold. The next 10 months will see national votes that could reshape Europe, with perhaps the most important happening in Italy on December 4. Myself and Nick Andrews have argued all year that the European Union is in the grip of destructive centrifugal forces due...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Audio & Transcript — Gavekal Research November Call

    Anatole Kaletsky, Arthur Kroeber and Charles Gave presented their views on what a Donald Trump presidency means. Anatole outlined both positive and negative potential outcomes. On the positive side, US growth could see a boost from expansionary fiscal policy, but isolationist trade policies could threaten US firms and equity prices. Arthur warned of the geopolitical risk of a power vacuum should the US pull back from its treaty obligations....

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Heaping Uncertainty On Brexit Doubt

    Markets and media were shocked by yesterday’s High Court judgement that UK prime minister Theresa May must seek parliamentary approval before pursuing her Brexit strategy. But for London’s legal community the decision was not unexpected. Many senior lawyers had predicted that the ruling would go against the government, if only because its case was so poorly presented by the Attorney General, who was forced for political reasons to concede the...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The New Frontier In Aerospace

    The highlight of this week’s Zhuhai airshow in Southern China was a fly-past by two of the People’s Liberation Army’s new J-20 warplanes, touted as China’s first stealth aircraft. Western military analysts reserved their judgment, pointing out they had learned nothing new about the aircraft, except that it was very noisy. Nevertheless, the broader message from Zhuhai was clear, echoing a similar message broadcast by the Japan International...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A European Head Fake

    Should investors be worried by a German bond market sell-off that has seen 10-year bund yields rise some 30bp over the last month? The last time European yields climbed this quickly, in early 2015, eurozone stocks swooned in the following year, with the benchmark index falling -27% peak-to-trough. Moreover, unlike the US which has seen a long expansion, it is not clear that a still weak eurozone can handle a rise in the cost of money.

    0
Show me: results