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Gavekal-IS
The Manager’s Unspoken Truth
Didier Darcet
7 Jan 2026
Ask an asset manager why they are buying equities and there is one answer you will never hear: “Because the market is rising and everyone else is buying.” Admit it, and one’s professional reputation, along with any justification for charging fees, quickly unravels. Yet behavioral effects do not disappear just because they are inconvenient for professionals to acknowledge. Such factors shape financial markets every day. In this report, Didier asks, what today is the manager’s unspoken truth?
Gavekal Research
On The Need To Stockpile Commodities
Louis-Vincent Gave
7 Jan 2026
The reason that over decades the world’s central banks stockpiled US treasuries was simple: in case of an emergency, they could be quickly transformed into whatever the situation might require. Louis argues that if US treasury reserves are mostly there to be transformed into commodities in a crisis, then the upshot of the US intervention in Venezuela would be for central banks to directly stockpile commodities instead.
Gavekal Dragonomics
Consumer Support Loses Its Punch
Ernan Cui
7 Jan 2026
Where is China’s much-heralded shift to supporting consumption headed in 2026? Ernan argues that the government’s new plan for consumer subsidies suggests the program will be scaled back, and other household support measures in the pipeline appear limited. In total, new household and consumer benefits will be more restrained this year than in 2025.
Gavekal Research
The Bond Quandary For 2026
Louis-Vincent Gave
7 Jan 2026
The main belief underpinning today’s record-high equity market valuations is that the rollout of artificial intelligence solutions will unleash an era of unprecedented productivity growth. To some extent, the same can be said for bond markets, says Louis. Given the widespread pursuit of aggressive reflationary policies, one must assume that artificial intelligence will lead to a new round of downward pricing pressures in order to be excited about bonds. In this piece, he unpicks that quandary.
Gavekal Dragonomics
Course Corrections Into 2026
Andrew Batson
Waiting For Anti-Involution Output Cuts
Wei He, Tilly Zhang
Exports To The Rescue
Wei He, Dragonomics Team
Looking Forward To A More Ordinary Year
Wei He, Andrew Batson
Manufacturing Investment Is Rationalizing
Thomas Gatley
Gavekal Research
An Inflationary Boom In 2026?
Will Denyer, Tan Kai Xian
The Euthanasia Of The Rentier
Charles Gave
Venezuela, Iran And The Message For China
Tom Holland
Maduro And The Markets
Louis-Vincent Gave
The Year Of The Bezzle
Louis-Vincent Gave
Gavekal Technologies
Open Door And Chip Self-Sufficiency
Laila Khawaja
China’s Tech Power—And Its Limits
Laila Khawaja, Tom Hancock, Damien Ma
What The End Of The H200 Ban Means
Laila Khawaja
The Successes And Failures Of US Export Controls
Laila Khawaja
Do Export Controls Work?
Laila Khawaja, Damien Ma, Tom Hancock
Gavekal-IS
Gold And War
Didier Darcet
The Catastrophe
Didier Darcet
AI Bashing
Didier Darcet
Gold Miners
Didier Darcet
Price Is What You Pay, Value Is What You Get
Didier Darcet
Gavekal Research
Navigating The AI Bubble
Will Denyer
13 Oct 2025
US equities—particularly those tied to artificial intelligence—appear to be in a bubble, says Will. The familiar signs are all there: inflated valuations, heavy capital spending, unrealistic growth projections, and vendor financing. In this report, he offers thoughts on when this equity bubble and capital spending boom might end. He also offers suggestions for how investors should be positioned in that eventuality.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
German CPI rose 1.8% YoY in Dec, versus 2.3% in Nov
Inflation cooler than expected 2.1%; French CPI rose 0.8% YoY in Dec, versus 0.9% in Nov
Energy prices driving disinflation; reflationary forces to build in 2026
Italian HCOB services PMI fell to 51.5 in Dec, from 55 in Nov
Below expected 54.1; composite PMI fell to 50.3 in Dec, from 53.8 in Nov
Reinforces outlook for slow recovery; momentum likely to improve
Australian CPI rose 3.4% YoY in Nov, versus 3.8% in Oct
Inflation lower than expected 3.6%; trimmed mean CPI rose 3.2% YoY in Dec, vs 3.3% in Nov
Upside risks to inflation will keep RBA on course to start rate hikes in 2026
Philippine CPI rose 1.8% YoY in Dec, versus 1.5% in Nov
Inflation above expected 1.4%; core CPI rose 2.4% YoY in Dec, the same pace as in Nov
Inflation driven by food prices; BSP to continue easing cycle to prop up growth
Test Your Knowledge
South Korea’s president wants to extend national health insurance to cover a condition many view as “a matter of survival.” What is it?
- Kimchi allergy
- Hair loss
- Acne
Chart of the Week
China’s cross-border travel numbers have returned to pre-pandemic levels, with international air passengers briefly touching the highest level in a decade during the summer. Outbound travel spending has mostly hovered around 2019 levels, while inbound travel spending has climbed further. That’s because the government substantially loosened visa policies for visitors from several countries; a weak currency and domestic deflation have helped too. China’s tourism exports are booming, but the outlook is clouded by geopolitical tensions.
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: Investing Into 2026
Louis-Vincent Gave, Charles Gave, Anatole Kaletsky
18 Dec 2025
To close out the year, Gavekal’s three founding partners convened to discuss the investment environment heading into 2026. Asset allocators must ponder where the US-China technology rivalry goes from here and whether the two economies can reconcile their differences, if the US consumer can stand up to the pressure, and the relative appeal of emerging markets in regions like Latin America.
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
An Inflationary Boom In 2026?
Heading into the new year, there are five main forces that will be at work in 2026 which are likely to support inflationary boom conditions in the US. There are also a number of potential threats to this relatively benign picture. Will and Kai Xian break them down and explain the implications for US assets.
A Weak And Bullish US Jobs Report
On the face of things, Tuesday’s US labor market data release is concerning. The headline unemployment rate for November ticked up for the fourth time in five months to 4.6%. Part of the story is that tighter immigration policies are weighing on labor force growth, and in turn the potential for job growth. And yet, a closer look at the labor market suggests this situation may end up being bullish for US equities.
QE For Christmas
The Federal Reserve is now easing with both hands on the pump. It has delivered a third consecutive interest rate cut and shifted decisively toward balance sheet expansion, only 10 days after closing the quantitative tightening program which began in June 2022. In effect, the Fed handed investors a measured dose of quantitative easing for Christmas, signaling a policy mix that is now unmistakably tilted toward accommodation.
More Than AI
US electricity consumption is rising. This is largely because of the build-out of power-hungry AI data centers. But not wholly. The increasing electrification of the economy, including the adoption of electric cars, is also driving the growth of power demand—growth will continue even if the AI frenzy in the stock market cools and data center capex diminishes.
China chartbook
Gavekal Dragonomics
The Chinese Consumer In 2025
Ernan Cui
24 Nov 2025
China’s household consumption growth has weakened further in 2025, primarily driven by the weak labor market and slowing household income growth. Policymakers have announced several new measures to boost spending, but there are also reasons to think that the slowdown might continue. In her annual chartbook, Ernan breaks down the key cyclical and structural drivers of household consumption, and explores what it means for consumer spending in the months to come.
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: The Immigration-Reindustrialization Balancing Act
Tan Kai Xian
17 Dec 2025
After two national guards were tragically shot by an Afghan national near the White House, the Trump administration has again tightened its immigration policy. The issue is that this stance comes with economic costs and potentially threatens the government’s stated aim of reindustrializing the United States. In this video interview, Tan Kai Xian explains how US policymakers will likely manage that balancing act.
Strategy Chartbook
Gavekal Research
Quarterly Strategy Review: 4Q25
Louis-Vincent Gave
22 Dec 2025
At first glance, the last quarter of 2025 was rather dull. However, precious metals delivered double digit gains, while crypto rolled over hard and big AI plays started to struggle. Against this backdrop, Louis reviews the more important events of the past three months, sets out the crucial questions that will confront investors in the near term, and highlights Gavekal’s key investment themes going into 2026.
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
Four Market Mispricings
Last week, Louis considered four contrarian trades for 2026 but expressed some skepticism about all of them. In this piece, Anatole suggests a variant on this concept, but offers a high conviction view: four market mispricings which reflect ideas about the world economy that are already shared by many investors but not yet reflected in market prices, even though market trends have already started moving in a direction consistent with these ideas.
Rubik’s ECB
By luck or design, the ECB has pulled off a near-perfect landing for inflation. After surging in 2021-24, eurozone inflation has settled back almost bang in line with the ECB’s 2% target. Market and survey-based measures of future inflation are also within similarly tight margins of the ECB’s target. So, what could upset this equilibrium?
Germany’s Energy-Intensive Industries Power On
Germany’s energy-intensive industries are finally seeing the pressures that drove their post-2022 slump begin to ease. After three years of elevated electricity costs and weak eurozone demand, both constraints are starting to lift, say August and Cedric. Power prices remain high, but policy relief is on the horizon, and the regional business cycle is turning up after an extended downturn.
Finally Some Sensible Fiscal Policy
Germany’s decision to relax its constitutional debt brake early in 2025 signaled a meaningful shift in the European Union’s fiscal policy consensus away from consolidation at all costs. As 2026 approaches, the key question August and Cedric ask is: how much has actually changed?
Currencies
How To Think About Renminbi Appreciation
Rubik’s ECB
Resolving The Renminbi Anomaly
Overseas Lending Switches To Renminbi
Takaichi, China And The Yen
Video: Investing In An Ungovernable Europe
Oil & commodities
Geoeconomic Monitor: A Bad Oil Bet In Venezuela
Geoeconomic Monitor: Working On Credibility
Axis Of Energy
Convictions And Concerns
The Petro-Currency That Wasn’t
Geoeconomic Monitor: Digital Currencies And Financial Power
