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Gavekal Research
Geoeconomic Monitor: The US Stays The Course In Asia
Tom Miller, Tan Kai Xian, Cedric Gemehl
7 Nov 2025
Despite its rhetoric about shaking things up, Donald Trump’s administration is also continuing some old policies. The US president has restored “strategic ambiguity” on Taiwan, which with a big assist from Taiwanese politics means that risks around the island will abate for the next few years. He is also quietly acknowledging that building China-free industrial supply chains will require a lot of help from allies—a continuation of Joe Biden’s “friendshoring” strategy. Also in this edition of the Geoeconomic Monitor, we look at Europe’s uphill struggle to get tougher on China.
Gavekal Research
Muscle Memory
Louis-Vincent Gave
7 Nov 2025
A recent post by Treasury Secretary Scott Bessent on X suggests he expects both Main Street and Wall Street to advance together. This should be positive news, but markets have not embraced the apparent green light, nor have they celebrated the new détente between the US and China. Louis highlights the factors that could be causing investors to hold back.
Gavekal Research
Webinar: Assessing The US Boom
Will Denyer, Tan Kai Xian
7 Nov 2025
How durable is the US’s artificial intelligence-driven boom and associated equity bubble? Will Denyer sought to answer this question and suggested investing strategies. Kai Xian covered three initiatives being pursued by the Trump administration—immigration control, reindustrialization and national security policy—and assessed their investment implications.
Gavekal Research
Video: Supreme Court v. Trump’s Trade Policy
Will Denyer
6 Nov 2025
Initial questioning by US Supreme Court justices in a landmark trade policy case suggests that a majority believe the Trump administration unlawfully invoked emergency powers to impose broad tariffs on importers. In this interview, Will outlines the key issues at stake and considers Trump’s possible next steps if the government loses.
Gavekal Dragonomics
Macro Update: Confidence Without Stimulus
Andrew Batson, Dragonomics Team
A Good Deal For China’s Exports
Thomas Gatley
The Place Of Consumers In The Plan
Andrew Batson
Conflicting Policy Choices For 2026
Wei He
The Macro Story Of China’s Manufacturing
Andrew Batson
Gavekal Research
Unraveling China’s Productivity Paradox
Weijian Shan
Why Are Americans Paying More For Electricity And Gas?
Tan Kai Xian
Some (Sober) Remarks On (OECD) Turkish Portfolios
Charles Gave
Fed Balance Sheet Expansion Nears
Will Denyer
Britain On The Brink
Anatole Kaletsky
Gavekal Technologies
Reading The US-China Trade Truce
Laila Khawaja
The Struggle For Technology Sovereignty
Laila Khawaja, Damien Ma, Tom Hancock
The US-China AI Race And Rare Earth Controls
Laila Khawaja
Unpacking The Nexperia Dispute
Laila Khawaja, Tilly Zhang
Rare Earth Dominance
Arthur Kroeber, Tom Hancock, Damien Ma
Gavekal-IS
Gold Miners
Didier Darcet
Price Is What You Pay, Value Is What You Get
Didier Darcet
The S&P 500 Gini Index
Didier Darcet
The Currencies Of Bridge-Builders
Didier Darcet
Is The Gold Rally Normal?
Didier Darcet, Michael du Jeu
Gavekal Research
What Next For US-China Relations?
Louis-Vincent Gave
21 Oct 2025
The US-China trade war has flared up again since the end of September. This resumption
of hostilities has clearly weighed on markets over the last couple of weeks. Louis lays out the scenarios for US-China relations, and argues that a truce is the most likely outcome, but which will still leave major questions unanswered.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
Germany industrial production rose 1.3% MoM in Sep, up from -3.7% in Aug
Below expected 3%; YoY, industrial production fell -1% in Sep, up from -3.6% in Aug
Led by autos; expect stronger domestic demand to offset weak external demand
UK left benchmark rate unchanged at 4%
As expected; 5 MPC members voted for a hold while 4 voted for a 25bp cut
BoE highlighting lower risk of persistent inflation, raising prospect of rate cuts ahead
Mexico cut benchmark rate by 25bp to 7.25%
As expected
Banxico's cautious tone suggests further easing likely to be data dependent
Philippines GDP rose 4% YoY in 3Q25, down from 5.5% in 2Q
Below expected 5.2%; slowest in four years
Graft-induced slowdown exaggerated by weather disruption
Test Your Knowledge
Which US state created the most finance and insurance jobs in the period 2019-24?
- New York
- Texas
- Florida
- California
Chart of the Week
Amid the gloom in Europe around US tariffs, there are silver linings. A closer look at the growing web of US trade deals suggests an increase in European competitiveness against other foreign suppliers in the US market. The ECB’s estimates of how recent US trade agreements mechanically affect the relative competitiveness of different regions actually point to a relative boost for European exporters. This should be particularly welcome for Europe’s structurally challenged energy-intensive and auto sectors, helping to stem further losses in market share.
Open Chart
Gavekal Research
Essential Reading: A Book For Every Week Of The Year
Gavekal is often asked for a recommended reading list. So, here it is: a book a week that everyone interested in the world of macro investing—whether hoary veteran or eager apprentice—can benefit from reading.
Gavekal Research
Webinar: Assessing The US Boom
Will Denyer, Tan Kai Xian
7 Nov 2025
How durable is the US’s artificial intelligence-driven boom and associated equity bubble? Will Denyer sought to answer this question and suggested investing strategies. Kai Xian covered three initiatives being pursued by the Trump administration—immigration control, reindustrialization and national security policy—and assessed their investment implications.
Tariff Troubles
Video: Supreme Court v. Trump’s Trade Policy
Initial questioning by US Supreme Court justices in a landmark trade policy case suggests that a majority believe the Trump administration unlawfully invoked emergency powers to impose broad tariffs on importers. In this interview, Will outlines the key issues at stake and considers Trump’s possible next steps if the government loses.
Geoeconomic Monitor: Understanding The New Trade Regime
In today’s Monitor, we continue our analysis of what Donald Trump’s new trade regime means for the world economy, explain how Indian prime minister Narendra Modi blundered and wound up facing a 50% tariff, and argue that none of the conditions for a quick end to the Russia-Ukraine war are in place.
Where Tariffs Leave US Industry
Late Thursday the US president signed two executive orders cementing—for now—the new tariff rates announced piecemeal over recent days in a series of social media posts and bilateral deals. The higher tariffs on imported inputs are but one part of a broader story that is shifting the narrative for US manufacturing. In this Daily, Kai Xian examines the other factors.
Japan’s Flaky Trade Deal
The US-Japan trade deal announced late Tuesday in Washington triggered a powerful rally in Japanese automaker stocks. But the anomalies and distortions implied by the limited details of the deal so far available mean the provisions of this “framework agreement” are unlikely to survive in their current form, warns Udith Sikand.
US economy & markets
Why Are Americans Paying More For Electricity And Gas?
Rising electricity demand from data centers—and the resulting strain on supply and prices—has become a dominant theme in US energy markets. Expanding US power supply capacity is essential to sustain economic growth. But Kai Xian reckons President Donald Trump’s policies are likely to add further upward pressure on US end-user electricity and gas prices.
Fed Balance Sheet Expansion Nears
Gold, crypto-currencies and equities have pulled back from record highs, which is unsurprising given very high valuations. Behind investor skittishness there likely sits changing expectations for US monetary policy and liquidity. Ending quantitative tightening may not be enough—the Federal Reserve may soon need to expand its balance sheet again.
Ample Liquidity Means An End To QT
Framed as a “risk management” move to counter labor market weakness rather than the start of a new easing cycle, the Federal Reserve seems set to cut interest rates by another -25bp. But the more interesting question is what the Fed will signal about its balance sheet policy. Will looks at the state of US bank reserves and concludes that the Fed will likely end QT sooner rather than later.
Piggybacking On Trump’s Policies
The list of the US government’s interventions in the private sector seems to get longer each week. In general, the administration has sought to justify its interventions as strategic necessities. The question for investors is whether the US government’s increasing activity in the private sector offers opportunities, or whether it poses unacceptable risks.
China chartbook
Gavekal Dragonomics
Macro Update: Confidence Without Stimulus
Andrew Batson, Dragonomics Team
5 Nov 2025
Buoyed by their success negotiating with the US, and in achieving their growth target, China’s leadership is now exuding confidence. But macro policy has not yet done much to boost domestic demand, a stance that points to continued tensions in 2026. In their latest quarterly chartbook, Andrew and the Dragonomics team assess China’s economic performance and the government’s policy agenda heading into the new year.
India chartbook
Gavekal Research
India Macro Update: Downside Risks Abound
Udith Sikand, Tom Miller
23 Sep 2025
India’s domestic economic recovery is at risk as Prime Minister Narendra Modi’s government faces a lose-lose choice: continue to import cheap oil from its long-time ally Russia or face punitive tariffs in its biggest export market. Last week’s US interest rate cut will give the central bank more room to cut rates, but the underperformance of Indian asset prices looks set to continue.
Latest video
Gavekal Research
Video: Supreme Court v. Trump’s Trade Policy
Will Denyer
6 Nov 2025
Initial questioning by US Supreme Court justices in a landmark trade policy case suggests that a majority believe the Trump administration unlawfully invoked emergency powers to impose broad tariffs on importers. In this interview, Will outlines the key issues at stake and considers Trump’s possible next steps if the government loses.
Strategy Chartbook
Gavekal Research
Quarterly Strategy Review: 3Q25
Louis-Vincent Gave
1 Oct 2025
Despite the fast and furious newsflow through the third quarter, foreign exchange and fixed income markets remained remarkably calm, giving room for AI enthusiasm to return with a vengeance, gold to surge, and the bull market in Chinese equities to accelerate. Against this backdrop, Louis considers both the headline trends and some of the more neglected developments of the last three months and examines the questions likely to dominate investors’ days in the coming quarter.
Emerging markets
Video: Are EMs Back?
It’s been a good quarter for the broad emerging markets complex. The MSCI EM index has returned almost 7% in US dollar terms, while US equities are down by some -3.5%. So should investors jump on the EM train? Udith points out that there is a wide divergence in the performance of individual emerging markets, and the threat of tariffs hangs heavy over EM corporate earnings. Investors need to be selective.
Video: Southeast Asia Under Trump 2.0
Global investors are rightly focused on the potential losers from the United States pursuing an aggressively protectionist trade policy agenda, but there may be winners as well. Tom went in search of such economies last week. Today he explains how such “swing states” are likely to perform in an intensified period of great power rivalry between the US and China.
China Turbocharges EM Investment
As the rich world pulls up the protectionist drawbridge, investors risk missing a bigger story
in emerging markets. Here, Chinese outbound investment is rebounding after the fallow Covid years, and is driving a new wave of industrialization that promises to lower the cost of the green-energy transition.
Why This Time Has Been Different
During past episodes of risk-off volatility, the correlation between emerging market risk assets has shot up. But early August’s bout of market volatility saw a bifurcation in EMs, and no broader macroeconomic spillover effects—which speaks well of the growing maturity of emerging markets as an asset class.
Europe's economy
Britain On The Brink
The United Kingdom has been one of the world’s worst performing economies and a value trap for both equity and bond investors since Brexit and the global financial crisis. Three months ago, Anatole wrote two articles arguing that Britain’s political economy was becoming so unsustainable that a cleansing crisis similar to the pound’s 1992 collapse could be in the offing. Ahead of Britain’s November 26 budget, he updates his argument, outlining the choices that Keir Starmer’s government must take in order to break out of a doom loop.
Old And New Eurozone Narratives
A series of data releases last week pointed to continued macroeconomic stability in the eurozone. Though modest, upside data surprises continue a trend of stronger-than-expected growth and inflation data that has persisted through most of the year. The eurozone economy is being buffeted by two opposing macroeconomic forces—an external deflationary shock from external factors, and a domestic reflationary shock. Cedric and August argue positive growth suggests that the domestic reflationary force is just prevailing.
Silver Linings For Europe’s Exporters
It has been a tough year for Europe’s exporters. On one hand, they have been hammered by US tariffs. On the other, the appreciation of the euro has eroded their competitiveness against Chinese rivals. There is no reason to believe these headwinds will disappear in 2026, but despite widespread pessimism, the picture for European exporters is not wholly gloomy.
Situation Desperate, Not Serious
On Monday, Sébastien Lecornu—France’s third prime minister since president Emmanuel Macron dissolved the National Assembly in June 2024—submitted his resignation just 14 hours after appointing his new government. Cedric examines if this means the French political center is imploding, and what's likely to happen next.
Currencies
Video: Investing In An Ungovernable Europe
The Renminbi’s Recent Run
What Money Is
Playing Emerging Market Carry
Three Stages For A Rally In Euro Assets
When A Nation Re-Emerges
Oil & commodities
Geoeconomic Monitor: Working On Credibility
Axis Of Energy
Convictions And Concerns
The Petro-Currency That Wasn’t
Geoeconomic Monitor: Digital Currencies And Financial Power
Oil Surplus Not All It Seems
