Most recent
Gavekal Research
I’ll Be Your Mirror
Arthur Kroeber
17 Oct 2025
Xi Jinping and Donald Trump may well sort out their current rift and eventually reach a trade deal. But the events of the past few weeks have confirmed a permanent power shift. Arthur argues that China has built a technology control regime that mirrors the one created by the US, and unpacks the motivations on both sides for deploying their weapons.
Gavekal Research
Video: Weathering The French Storm
Cedric Gemehl
16 Oct 2025
France’s latest prime minister, Sebastien Lecornu, has survived two no-confidence motions in the National Assembly. But his victory has come at a cost. In this interview, Cedric Gemehl charts the political currents in the run-up to France’s 2027 presidential election and examines why French financial markets have remained relatively calm amid all the political turbulence.
Gavekal-IS
The Currencies Of Bridge-Builders
Didier Darcet
16 Oct 2025
In an age of increased great power competition, Didier investigates the reasons for the recent outperformance of the currencies of non-aligned countries that have taken care to steer a mid-course between the world’s big players.
Gavekal Research
Indian Stocks And Gold
Charles Gave
16 Oct 2025
Since April 2023, the MSCI India index has risen 44% in US dollar terms, which is very respectable. But over the same period, the price of gold has more than doubled. As a result, the Indian stock market is now beginning to look cheap relative to gold. Charles ponders if it is time to embrace a return-to-the-mean strategy and, amid a backdrop of warming China-India relations, looks at the implications for monetary policy.
Gavekal Dragonomics
Equities And The Great Deposit Migration
Xiaoxi Zhang
Signs Of Policy Hubris
Andrew Batson
The Silent Payroll Tax Hike
Ernan Cui
The Elusive 'Slow Bull' Market
Thomas Gatley
What The Unified National Market Really Means
Tilly Zhang
Gavekal Research
What Could Stop The Precious Metals Bull Market?
Louis-Vincent Gave
Navigating The AI Bubble: An Asset Allocator’s Dilemma
Will Denyer
Projecting The Past Into The Future
Louis-Vincent Gave
Navigating The AI Bubble
Will Denyer
What China’s Rare-Earths Controls Really Mean
Arthur Kroeber, Laila Khawaja
Gavekal Technologies
Raising The Stakes For Trade Talks
Laila Khawaja
Beijing’s Balancing Act
Laila Khawaja
Getting Industrial Policy Right
Arthur Kroeber, Laila Khawaja, Damien Ma, Tom Hancock
China AI Finds The Money In Hardware
Tilly Zhang
Inside China’s AI Chip Hype
Laila Khawaja
Gavekal-IS
Is The Gold Rally Normal?
Didier Darcet, Michael du Jeu
Power Is When You Have It
Didier Darcet
Can Political Tensions Be Ignored?
Didier Darcet
Ecstatic Gold!
Didier Darcet
Abduction
Didier Darcet
Gavekal Research
Tail Risks To The Unfolding Inflationary Boom
Louis-Vincent Gave
17 Sep 2025
Today’s “inflationary boom” is sufficiently well anchored that it would probably take a serious US recession, or a collapse in the artificial intelligence-driven tech infrastructure boom to push the world economy into a “deflationary bust” scenario, says Louis. In this piece he explains the arguments supporting that postulate but also looks at tail risks which could create a genuine global bust.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US Philly Fed business outlook index fell to -12.8 in Oct, from 23.2 in Sep
Below 10 expected
Volatile series; components mixed, offering no clear signal
US NAHB housing market index rose to 37 in Oct, from 32 in Sep
Above 33 expected
Lower mortgage rates boosting homebuilder confidence, but affordability still a problem
UK monthly GDP rose 0.1% MoM in Aug, versus -0.1% in Jul
As expected; industrial production rose 0.4% MoM in Aug, versus -0.4% in Jul
Growth continues to slow; downward trend unlikely to change given fear of tax hikes
Eurozone trade surplus widened to €9.7bn in Aug, from €6bn in Jul
Surplus wider than expected €7bn; imports (-1.2% YoY) fell faster than exports (-0.9% YoY)
Tariff frontloading hangover likely over; as shown by normalization of US inventories
Test Your Knowledge
Of the top five countries by gold reserves, which country’s official holdings are the greatest relative to GDP?
- The US
- Italy
- Germany
- China
- France
Chart of the Week
China’s domestic tourism spending growth cooled to 1% YoY during the National Day public holiday on a like-for-like basis, to around 9% more than in 2019. This growth is lackluster by almost any measure. But there is at least one bright spot: inbound tourism climbed 22% YoY. Foreign holidaymakers have been drawn to China thanks to new visa-free travel policies, as well as relatively cheap hotel and travel costs resulting from a weak currency and domestic deflation. As with the rest of the economy, China’s domestic tourism demand is tepid, but exports are robust.
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: Dan Wang On China's Engineering State
Arthur Kroeber, Dan Wang
10 Oct 2025
Dan Wang, who was Gavekal's technology analyst for six years, has just published an important book, Breakneck: China's Quest to Engineer the Future. He joins Gavekal head of research Arthur Kroeber in a conversation about China's technological progress and competition with the US, and argues that the engineering mindset of China's government is why the country has become the world's undisputed manufacturing superpower.
Tariff Troubles
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.
Geoeconomic Monitor: Digital Currencies And Financial Power
As US lawmakers aim to fast-track legislation aimed at encouraging the development of privately issued cryptocurrencies, Arthur Kroeber assesses the probability that digital currencies will upend the established US-dollar-based international financial system. Separately, Tom Holland examines the likely effectiveness of US secondary tariffs aimed at curbing Russia’s energy exports, and Tom Miller takes the temperature of the political waters across the Taiwan strait.
US economy & markets
Navigating The AI Bubble: An Asset Allocator’s Dilemma
On Monday Will assessed the US’s tech-driven asset bubble from an investor stance. Using a Wicksellian analysis of the economy-wide return on capital, he argued that the surge in artificial intelligence investment is unlikely to end soon—and therefore investors should not rush to load up on bonds. Yet an assessment of asset valuations shows US equities to be very expensive relative to their own history and other asset classes, including US bonds. It leaves investors with a dilemma that he examines in this piece.
Goodbye Growth Potential
The Trump administration’s tighter immigration policies are slowing US labor force growth and, over time, may constrain potential output relative to other major economies, says Kai Xian. As a result, the near- to medium-term outlook points to relatively slower US growth and a softer US dollar.
Seismic Foreshocks?
The failures in September of US auto lender Tricolor and US auto parts maker First Brands are still causing aftershocks for the financial system. The question for macro investors is whether these two corporate collapses are the foreshocks of a greater seismic upheaval yet to come for the US economy.
More Important Than The Shutdown
The US government shutdown has captured the headlines. But Will argues there were more important developments in the first week of October, which will have a greater impact on the US—and global—investment environment.
China chartbook
Gavekal Dragonomics
The Financial Risk Report 2025
Xiaoxi Zhang
28 Aug 2025
China’s banking system faces fundamental strains that mean the rapid credit growth of the past 15 years cannot continue. Low rates are compressing margins, making banks less able to finance themselves, while potential bad loans are piling up. A new round of bank bailouts in 2025 shows the government recognizes the problem, and will keep the banks stable for now, but not forever. In her annual update on the health of China’s financial system, Xiaoxi explains why this year’s bank bailout will not be the last.
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: Weathering The French Storm
Cedric Gemehl
16 Oct 2025
France’s latest prime minister, Sebastien Lecornu, has survived two no-confidence motions in the National Assembly. But his victory has come at a cost. In this interview, Cedric Gemehl charts the political currents in the run-up to France’s 2027 presidential election and examines why French financial markets have remained relatively calm amid all the political turbulence.
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
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.
The Long Bid In European Credit
Tight spreads despite heavy issuance are testimony to the strength of demand for European corporate debt. These favorable conditions are set to persist through 2026, write August and Cedric, as cyclical drivers in the market are supplemented by emerging structural forces, including long-awaited regulatory reforms.
A Market View Of The Franco-German Relationship
Since the signing of the Élysée Treaty in 1963, the Franco-German relationship has been central to European integration. Yet whether the ties between these two powers truly constitute a “friendship” remains contested, depending on one’s view. For investors in European assets, the more relevant question is whether the stock market has a view. It does—and it points to a Franco-German relationship defined more by competition than by friendship.
Diverging Monetary Policy Drivers
Amid a raft of central bank meetings this week, investors will focus on two fronts: monetary policy direction, and their ability to resist political interference. Udith and Cedric argue that EM and European central bank credibility and independence has largely held up, and that the trajectory of monetary policy and rate differentials in the months ahead points toward US dollar weakness.
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
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
Webinar: Pricing Another Middle Eastern War
