Most recent
Gavekal Dragonomics
Foreign EV Makers Fight Back
Ernan Cui
5 May 2026
At this year’s Beijing Auto Show, global automakers displayed some electric-vehicle models that are competitive with any produced by Chinese EV brands. Ernan argues that after lagging behind for years, some of these automaking giants are now embracing Chinese suppliers in order to gain competitiveness and hold their own against the Chinese EV makers, even in the world’s most competitive auto market.
Gavekal Research
The High Cost Of Free Money (Part II)
Charles Gave
5 May 2026
Charles’s career mission has been to draw up “laws” governing the relationships between asset prices, with the ultimate objective of building the best portfolio. What frustrates him is that so many of the basic ideas he encounters among investors are still based on misnomers. That is why he is initiating a series of reports to examine generally accepted investment rules. He starts with the idea that low interest rates are a good thing.
Gavekal Research
Energy Versus Semiconductors
Louis-Vincent Gave
5 May 2026
In April, the MSCI World semiconductor index rose 27%. Over the same period, the MSCI World energy index fell -2.1%. In its collective wisdom, the market seems to be telling investors not to worry about the near-term possibility of an Iran-war-induced energy crisis, but instead to worry that the rollout of artificial intelligence solutions will trigger semiconductor shortages on a grand scale. The performance of the market now raises a question: what could energy bulls be missing?
Gavekal Research
The LEM At Work
Louis-Vincent Gave
4 May 2026
El Niño disrupts weather patterns across the world, triggering droughts in Asia and Africa and causing excess rainfall in the Americas. Why rehash this? Because the probability of a “Super El Niño” in the second half of 2026 are now thought to be very high. This will be terrible news for rice harvests across Asia, wheat harvests in Australia, and for all farming across Africa. But grain prices have remained tame. Louis offers a few possible explanations.
Gavekal Dragonomics
False Hope For Infrastructure Investment
Wei He
Shanghai’s Stealth Mortgage-Rate Cut
Xiaoxi Zhang
Why Corporate Margins Will Take A Hit
Thomas Gatley
The Promise Of A Services Opening
Tilly Zhang, Christopher Beddor
The Demand Divergence Deepens
Wei He, Dragonomics Team
Gavekal Research
Geoeconomic Monitor: Casualties
Tom Holland, Tom Miller, Yanmei Xie
Food For The ECB Hawks
August Gudmundsson
Video: War, Swap Lines And Debt
Will Denyer
The Fed’s New Chair And Shadow Chair
Will Denyer
Addressing Jobless Growth
Tan Kai Xian
Gavekal Technologies
A Western Hemisphere Strategy For Rare Earths
Damien Ma, Tom Hancock, Laila Khawaja
China Blocks Meta-Manus Deal
Laila Khawaja
Looking For Battery Life After LFP
Damien Ma, Laila Khawaja, AJ Cortese
On The Ground At China’s Tech Conferences (Part II)
Laila Khawaja
China’s Supply-Chain Security Strategy
Arthur Kroeber, Laila Khawaja, Tom Hancock, Huang Shichan, AJ Cortese
Gavekal-IS
Understanding Asset Price Trajectories (Part II)
Didier Darcet
Understanding Asset Price Trajectories (Part I)
Didier Darcet
The Neutral Portfolio
Didier Darcet
The Market’s Take On Global Trade
Didier Darcet
What To Do? Stay Put
Didier Darcet
Gavekal Research
Rolling Over The Iran Ceasefire
Louis-Vincent Gave
23 Apr 2026
The next round of the Islamabad peace talks is up in the air, partly because it is not obvious who really holds the levers of power in Iran. The plan was that, should Iran’s political leaders be killed, the 31 regional commanders would become independent actors whose task was simply to take the fight to the enemy. Louis argues this leaves investors with three main possible scenarios.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US factory orders rose 1.5% MoM in Mar, versus 0.3% in Feb
Stronger than expected 0.6%
Strong AI-related demand underpinning resilient capex plans
Eurozone Sentix investor confidence index fell to -16.4 in May, from -19.2 in Apr
Above expected -22; expectations index fell to -11.3 in May, from -15.5 in Apr
Energy shock nudging eurozone towards stagflation
Indonesia's CPI rose 2.4% YoY in Apr, versus 3.5% in Mar
Inflation cooler than expected 2.7%; core CPI rose 2.4% YoY in Apr, versus 2.5% in Mar
Base effects and fuel subsidies delaying inflationary impact of energy shock
Philippine CPI rose 7.2% YoY in Apr, versus 4.1% in Mar
Inflation hotter than expected 5.5%; core CPI rose 3.9% YoY in Apr, versus 3.2% in Mar
Acceleration driven by fuel and food prices; increased risk of further tightening by BSP
Test Your Knowledge
IPOs raised US$13.3bn on the Hong Kong stock exchange in the first quarter. What share of the proceeds was raised by technology companies?
- 21%
- 49%
- 69%
Chart of the Week
The accumulation of large US dollar balances by oil producers has long been the lynchpin of the petrodollar thesis to explain the US dollar’s dominance. What is less appreciated is that the current account surpluses of Northeast Asian economies have generally exceeded the surpluses of Gulf Cooperation Council economies.
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: Second-Order Effects
Tom Holland, Tan Kai Xian, Cedric Gemehl, Udith Sikand
26 Mar 2026
The economic fallout from the war in Iran is broadening as disrupted energy markets drive oil and gas prices higher and leave policymakers with difficult dilemmas if they are to avoid a 1970s stagflationary cycle from unfolding. Our panel considers the latest developments on the ground in the Persian Gulf and assesses what this means for the US, Europe and emerging economies.
The Iran War And Fallout
Energy Versus Semiconductors
In April, the MSCI World semiconductor index rose 27%. Over the same period, the MSCI World energy index fell -2.1%. In its collective wisdom, the market seems to be telling investors not to worry about the near-term possibility of an Iran-war-induced energy crisis, but instead to worry that the rollout of artificial intelligence solutions will trigger semiconductor shortages on a grand scale. The performance of the market now raises a question: what could energy bulls be missing?
Geoeconomic Monitor: Casualties
The United Arab Emirates' decision to pull out of Opec was a surprise, but it did not come out of the blue. The UAE has long complained about the tightness of its Opec production quotas. However, the timing of its announcement suggests the decision was more driven by its hard line against Iran and its frustration with the more conciliatory stance of other Gulf Arab states led by Saudi Arabia. This may have post-war costs for the UAE, writes Tom Holland. Also, Tom Miller examines the position of Pakistan after the UAE called in a US$3.5bn loan to Islamabad, and Yanmei Xie looks at Spain's open-door policy for Chinese inward investment.
Food For The ECB Hawks
The European Central Bank held interest rates steady on Thursday, but said that risks to inflation and growth stemming from the Iran war had “intensified”. As energy prices continue to grind higher, the policy bias is being tilted toward higher rates. The near-term inflationary impulse stems almost entirely from energy effects, argues August.
What Iran Changes For Europe
The impact of the Iran war on Europe is difficult to pin down, given the high degree of geopolitical uncertainty. A useful way to frame the outlook, argues Cedric, is by time horizon. This lens offers clarity at both ends of the horizon, while uncertainty is concentrated in the medium term.
US economy & markets
The Fed’s New Chair And Shadow Chair
The key outcome of this week’s Federal Reserve policy meeting was not any change to policy, it was Jerome Powell’s decision to remain on the central bank’s board of governors after his term as chair ends on May 15. This raises the prospect that Powell could serve, if need be, as a “shadow chair”. It also reduces the tail risks of the Fed losing its monetary policy independence and shifting its goals toward persistently higher inflation.
Addressing Jobless Growth
The US economy is entering a phase of jobless growth, where GDP expands but employment fails to keep pace—and in some cases contracts. Labor market strength has long been a reliable signal of broader US economic health, which makes this divergence notable. Investors will need to understand what is driving the shift and how it is likely to shape the policy response.
Copper, Oil And Gold
From late 2022 until January 2026, copper prices rallied while oil trended lower as artificial intelligence and electrification drove markets. Since January, those narratives have taken a back seat to the Iran war. Oil prices have spiked, copper sold off modestly, and the copper-to-oil-price ratio moved back to more normal levels. For investors, a key question is whether to favor copper, oil or both.
What Could Go Wrong With US Credit?
The triple whammy of the Iran war, the private credit exodus and concerns about artificial intelligence disruption is being absorbed with steely calm by the US corporate credit market. This should not come as a huge surprise as US firms, in general, have healthy balance sheets. Yet, despite this otherwise reassuring backdrop, the technology sector stands out as a weak spot.
China chartbook
Gavekal Dragonomics
Macro Update: Preparing For Normalization
Wei He, Dragonomics Team
4 Feb 2026
China’s policymakers are satisfied with economic performance in 2025, and appear confident that 2026 will be a more ordinary year that allows for a more normal policy stance. But domestic demand remains lackluster, and it’s unclear whether recent positive momentum in some areas can be sustained. In their latest quarterly chartbook, Wei and the Dragonomics team take stock of China’s economic performance and the outlook for the year ahead.
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: War, Swap Lines And Debt
Will Denyer
30 Apr 2026
The United Arab Emirates has asked the United States for a US dollar swap line. The US Treasury Secretary has indicated openness and could approve the request. However, there are strong reasons for the Treasury and the Federal Reserve to steer countries towards the newer emergency liquidity facility, the foreign repo facility established in 2020.
Strategy Chartbook
Gavekal Research
Quarterly Strategy Review: 1Q26
Louis-Vincent Gave
7 Apr 2026
For investors, the first quarter of 2026 was dominated by the US and Israeli attack on Iran and the resulting spike in global energy prices. But there were plenty of other developments that also affected portfolio construction, including the shakeout in US private credit,the assertion of the US “Donroe doctrine,” the Japanese election victory of Sanae Takaichi, and the appreciation of the renminbi. In this quarterly review, Louis looks at how these and other events affected market performance, and examines the factors shaping asset allocation decisions over the rest of 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
Food For The ECB Hawks
The European Central Bank held interest rates steady on Thursday, but said that risks to inflation and growth stemming from the Iran war had “intensified”. As energy prices continue to grind higher, the policy bias is being tilted toward higher rates. The near-term inflationary impulse stems almost entirely from energy effects, argues August.
What Iran Changes For Europe
The impact of the Iran war on Europe is difficult to pin down, given the high degree of geopolitical uncertainty. A useful way to frame the outlook, argues Cedric, is by time horizon. This lens offers clarity at both ends of the horizon, while uncertainty is concentrated in the medium term.
Opioid Pushers And Central Bankers
Consensus opinion is usually wrong among the policymakers and financiers who gather at the International Monetary Fund in Washington every six months. But to every rule there is an exception. Mid-April’s IMF meetings produced three near-unanimous views. One is almost
mathematically certain and a second extremely likely, leaving only a third consensus for investors to challenge and trade against.
Europe’s Uneven Energy Shock
The plight of European industry over the past four years has reinforced the centrality of energy to modern economies. The tightening of energy supplies after Russia’s 2022 invasion of Ukraine placed Europe’s industrial complex under acute strain, just as Chinese firms were becoming formidable. With energy prices again high due to the Iran war, August and Cedric assess Europe’s vulnerabilities across its industrial sectors.
Currencies
Monetizing US Budget Deficits
The New World Does Not Need A Reserve Currency
Video: Hong Kong’s Renminbi Question
What To Do With US$1trn?
On The False Price Of The Yen
Behind The Dollar’s Decline
Oil & commodities
Copper, Oil And Gold
The Message In The Oil Curve
Geoeconomic Monitor: The War Takes Its Toll
Video: Japan's Macro Dilemma
Winners And Losers Of The Iran War
The Iran War Uncertainties
