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Gavekal Research
Hedging In A Time Of War
Will Denyer
9 Mar 2026
War is punishing for portfolios, especially when it disrupts the flow of oil and gas. War can also affect markets through higher government borrowing, rising inflation, differing monetary policy responses and changes in the economic outlook of affected regions. The effect of these forces may explain why some hedges and safe havens have underperformed during the first week of the US-led war against Iran, says Will.
Gavekal Research
On Price Controls And Export Restrictions
Louis-Vincent Gave
9 Mar 2026
In the eyes of the voting public and of US allies, Donald Trump would very much carry the blame for the surging oil price. And with eight months to go before the midterm elections, this would leave the White House in a political predicament. If oil prices stay above US$100/bbl, the pressure on Trump to “do something” about rising prices will become intense, with the troubling prospect of price controls and export restrictions on the horizon.
Gavekal Research
Geoeconomic Monitor: After The War
Tom Holland, Tom Miller
6 Mar 2026
As the war in the Middle East escalates, the immediate prospects for peace look poor. We attempt to peer through the fog of war to determine who will benefit when it does eventually end. If the United States achieves its aims, Tom Holland envisages a boom for Iran and the Gulf. If it does not, he predicts the whole region will decline. Tom Miller asks why China has provided no meaningful support to Iran.
Gavekal Research
Iran And The Fog Of War
Louis-Vincent Gave
6 Mar 2026
The overall measured response of markets to the war in Iran points to investors taking a view that we are experiencing short-term disruption that should soon pass. In this piece, Louis interrogates that proposition from the perspective of the US, Israel, and Iran.
Gavekal Dragonomics
Dialing Back Fiscal Stimulus
Wei He
A Comfortable Bystander
Arthur Kroeber
Venture Capital Rebounds
Tilly Zhang, Xiaoxi Zhang
Another Fiscal Disappointment
Wei He
Escaping The Growth Target’s Dilemma
Andrew Batson
Gavekal Research
Picking Up Loans On The Cheap
Tan Kai Xian
Policy Challenges Around The World
Louis-Vincent Gave
Injurious Exposure
Udith Sikand, Tom Miller
It Does Not Add Up...
Charles Gave
Into An Inflationary Bust?
Tom Holland, Research Team
Gavekal Technologies
Will AI Supercharge The China Shock?
Laila Khawaja, Tom Hancock
China Enriches Export Control Toolkit
Laila Khawaja
Washington’s AI Anxiety Rises
Laila Khawaja
US Biotech Is Safe From China (For Now)
Tom Hancock, Laila Khawaja
US (Briefly) Blacklists Chinese Firms
Laila Khawaja
Gavekal-IS
The Global Portfolio Regatta
Didier Darcet
Money Creation, Interest Rates And Wealth Creation
Didier Darcet
Time To Take Profits On Metals?
Didier Darcet
The Big Long 2.0
Didier Darcet
Measuring Imitation
Didier Darcet
Gavekal Research
Geoeconomic Monitor: Who’s The Real Winner?
Tom Holland, Tom Miller
6 Feb 2026
Donald Trump says India has agreed to stop buying Russian oil and funding Vladimir Putin’s war machine. And in Panama the annulment of CK Hutchison’s ports contract means Trump can finally claim to have “taken back” the canal. The reality in both is less black-and-white.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US nonfarm payrolls fell -92k in Feb, down from 126k in Jan
Below expected 55k; unemployment rate rose to 4.4% in Feb, from 4.3% in Jan
Underlying downtrend points to job market headwinds intensifying
US retail sales in nominal terms fell -0.2% MoM in Jan, down from 0% in Dec
Above expected -0.3%; retail sales ex-auto & gas rose 0.3% MoM in Jan, vs 0.1% in Dec
Weakness exaggerated by weather disruptions; expect only shallow rebound
Japan labor cash earnings rose 3% YoY in Jan, up from 2.4% in Dec
Above expected 2.4%; real cash earnings rose 1.4% YoY in Jan, up from -0.1% in Dec
BoJ more worried about downside risks to growth than upside risks to inflation
China CPI rose 1.3% YoY in Feb, up from 0.2% in Jan
Above expected 0.9%; core CPI rose 1.8% YoY in Feb, up from 0.8% in Jan
Driven by holiday spending; sustained oil price spike will hasten exit from deflation
Test Your Knowledge
Prediction-market platform Polymarket has removed bets on a nuclear detonation by the end of the year. How did Polymarket users place the odds before it was taken down last Wednesday?
- 6%
- 12%
- 24%
- 56%
Chart of the Week
Rumours that European Central Bank president Christine Lagarde could step down before her term ends in October 2027 agitated the financial community last week (see The Changing Of Lagarde). There will soon be a time to assess her legacy at the ECB. But what is already clear is that her time was characterized by significantly higher inflation than her predecessors.
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: China Sets The Agenda
Christopher Beddor, Wei He, Ernan Cui, Thomas Gatley
27 Feb 2026
At the beginning of March, China’s government will announce its economic agenda and budget for 2026, as well as its next five-year plan. The leadership is sounding confident, with some reason, but there are many questions on policy. Exports are booming and industrial upgrading is proceeding, but the anti-involution campaign is scrambling incentives. Fiscal and monetary stimulus is cautious, even though growth has been slowing. Officials are talking up their plans to boost consumption, but household sentiment is still weak. In this webinar, our China team assess these and other issues, and explain what to expect from China macro and markets in 2026.
Tariff Troubles
After The SCOTUS Tariff Ruling
The shift in the tariff landscape following the US Supreme Court’s ruling on Friday that all tariffs imposed by Donald Trump under IEEPA—the 1977 International Emergency Economic Powers Act—are illegal is good news for equity investors. But it is not great news, writes Will Denyer.
The EM Triple Whammy On Full Display
It would be tempting to ascribe the simultaneous US dollar, bond, and equity market sell-off to the self-owned “crisis” around Greenland and to Trump’s threat to use tariffs against (former?) friends to force a change of sovereignty. Still, the current sell-off in bonds, and equities, may also be driven by other important factors, says Louis.
How Europe Will Respond To Trump’s Greenland Tariffs
On Saturday, US president Donald Trump threatened new tariffs on eight European countries over their opposition to his plans to annex Greenland. Since then, attention has shifted to how Europe might respond. Cedric argues that conciliation and deescalation remains Europe’s first response to Trump’s new tariff threat, but there is now a greater chance that the EU retaliates in earnest if that strategy fails.
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.
US economy & markets
Hedging In A Time Of War
War is punishing for portfolios, especially when it disrupts the flow of oil and gas. War can also affect markets through higher government borrowing, rising inflation, differing monetary policy responses and changes in the economic outlook of affected regions. The effect of these forces may explain why some hedges and safe havens have underperformed during the first week of the US-led war against Iran, says Will.
Picking Up Loans On The Cheap
As the US-led war in Iran consumes international investor attention, private credit concerns continue to bubble up within the US itself. Practitioners such as Blue Owl and Blackstone have seen their share prices crater as investors question the quality of non-bank, privately negotiated lending. The sell-off raises four questions.
US Banks And The NatSec Intersection
US bank stocks took a beating Monday, with the S&P 500 bank index falling a painful -4.3%—almost as much as US software stocks. But Kai Xian argues that banks are emerging as one of the most promising ways to play the US government’s drive to step up investment in US national and economic security, and the recent fall may provide a buying opportunity.
After The SCOTUS Tariff Ruling
The shift in the tariff landscape following the US Supreme Court’s ruling on Friday that all tariffs imposed by Donald Trump under IEEPA—the 1977 International Emergency Economic Powers Act—are illegal is good news for equity investors. But it is not great news, writes Will Denyer.
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: The Logic Of EU Bonds
Cedric Gemehl
3 Mar 2026
For Emmanuel Macron, jointly issued European Union bonds is an idea whose time has come. For Friedrich Merz, however, broad mutualization of European public debt remains a step too far. What is interesting is that despite these predictable positions in Paris and Berlin, a growing logic may nonetheless be pushing Europe toward larger-scale EU bond issuance.
Strategy Chartbook
Gavekal Research
Global Strategy: Best And Worst Trades For 2026
Louis-Vincent Gave, Charles Gave, Anatole Kaletsky, Will Denyer, Tan Kai Xian, Cedric Gemehl, August Gudmundsson, Thomas Gatley, Udith Sikand, Tom Miller
8 Jan 2026
Past performance is no guide to future returns, and the trend is not always your friend. As such, Gavekal writers consider their most compelling 10 macro trades for 2026, on both the upside and the downside. If one theme runs through our developed-market views, it is the expectation for a sustained inflationary boom. That story is different in China, but Chinese firms look to be on the right side of an energy transition with room to run. The view on gold is nuanced, especially seen through the lens of Japanese investors facing extreme asset valuations.
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
Sweden As An Indicator Of Capital Flows
The debate over whether global investors are beginning to reduce exposure to US assets has intensified. After a decade of US equity outperformance, dollar strength and deep capital market dominance, signs of diversification are emerging. Sweden offers an unusually clear window into this change.
Poland’s Advantages
In recent years, Poland’s economy has grown far faster than those of neighbors Czechia, Hungary and Slovakia. This divergence within the “Visegrád Four” coincided with a sharp widening in Poland’s fiscal deficit from 1.7% of GDP in 2021 to around 6.8% in 2025. In this report, August explains why that fiscal largesse has not undermined the longer term Polish growth story, which continues to benefit from tailwinds as it plays catchup with economies to its west and protects against a menacing Russia to its east.
The Changing Of Lagarde
European Central Bank president Christine Lagarde is reportedly preparing to step down from her post at the ECB well before her term ends in October 2027. Whatever Lagarde’s intentions, it is certain that four of the six members of the ECB’s executive board will be replaced by the end of 2027. This prospective game of musical chairs was always likely to generate speculative headlines well in advance of the actual changes. In reality, there will be no simple bilateral stitch-up between Paris and Berlin.
European Equities Still Offer Catch-Up Potential
By anyone’s standards, European equities have had a spectacular run, fractionally beating the stoked-up US market since November 2022. However, given that one key argument for buying European equities has been their compelling valuation relative to US stocks, it has to be asked whether, following their three-year rally, European equities still offer attractive value.
Currencies
Video: Hong Kong’s Renminbi Question
What To Do With US$1trn?
On The False Price Of The Yen
Behind The Dollar’s Decline
A New Reflationary Force?
Don’t Bet On A Forever Weak Yen
Oil & commodities
Injurious Exposure
Dire Straits
Geoeconomic Monitor: The Iran Outcome
Is Clean Energy A Better Hedge Than Oil?
Geoeconomic Monitor: Who’s The Real Winner?
Geoeconomic Monitor: A Bad Oil Bet In Venezuela
