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Gavekal Research
What Iran Changes For Europe
Cedric Gemehl
24 Apr 2026
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.
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.
Gavekal Dragonomics
Why Corporate Margins Will Take A Hit
Thomas Gatley
23 Apr 2026
China’s producer price index moved into positive YoY territory in March after 41 consecutive months of deflation. But Thomas argues that this return to rising prices does not prefigure a shift towards stronger corporate profitability: for most of the industrial sector, rising energy prices are going to be absorbed mostly by corporate margins, denting profits and equity prices.
Gavekal Research
Good News Versus Bad News
Louis-Vincent Gave
22 Apr 2026
It would be easy to feel despondent in the face of the on-again/off again Iran war, and the apparent front-running of every important tweet. To be sure, there are some serious causes for concern, says Louis, yet markets have remained buoyant and climbed the proverbial “wall of worry”. In this report, he assesses recent positive developments and then reviews the hurdles that stand in the way of a sustained rally in markets.
Gavekal Dragonomics
The Promise Of A Services Opening
Tilly Zhang, Christopher Beddor
The Demand Divergence Deepens
Wei He, Dragonomics Team
Building A Tax Panopticon
Ernan Cui
Vindication For The Stockpilers
Christopher Beddor
The Prospects For A Trend Change In Inflation
Andrew Batson, Wei He
Gavekal Research
Opioid Pushers And Central Bankers
Anatole Kaletsky
Video: Has The Fed's Priority Shifted?
Will Denyer
India Is Still In The AI Race
Udith Sikand
The PBoC In The Driver’s Seat
Charles Gave
What Is The Market Thinking?
Louis-Vincent Gave
Gavekal Technologies
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
Can The World’s Biggest Grid Get Smarter?
Damien Ma, AJ Cortese
China Strengthens Its Retaliation Toolkit
Laila Khawaja
Can The World’s Biggest Grid Get Smarter?
Damien Ma, AJ Cortese
Gavekal-IS
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
Rare Cases Of Risk Asymmetry
Didier Darcet
Gavekal Research
The EU After Orbán?
August Gudmundsson, Cedric Gemehl
9 Apr 2026
On Sunday, Hungarian voters go to the polls in what may well turn be Europe’s most important election of 2026. Hungary’s recent economic underperformance means that for the first time in 16 years, prime minister Viktor Orbán’s Fidesz party faces a credible challenger in the shape of Péter Magyar’s Tisza party. Even with a commanding lead in some of the polls, victory is unlikely to be smooth for Magyar. If the challenger does win, however, he will remove a major thorn in the side of Brussels policymaking, with far-reaching consequences for the European Union both at home and abroad.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US S&P Global manufacturing PMI rose to 54 in Apr, versus 52.3 in Mar
Above expected 52.5; services PMI rose to 51.3 in Apr, versus 49.8 in Mar
Surge in prices sub-component overshadows uptick in new orders driven by restocking
Eurozone S&P Global manufacturing PMI rose to 52.2 in Apr, versus 51.6 in Mar
Above expected 50.9; services PMI fell to 47.4 in Apr, versus 50.2 in Mar
Energy shock weighing on EZ activity; mfg sector supported by inventory buildup
Japan CPI rose 1.5% YoY in Mar, versus 1.3% in Feb
Above expected 1.4%; CPI ex-fresh food & energy rose 2.4% YoY in Mar, versus 2.5% in Feb
Despite upside risks to inflation, BoJ signaling hold next week due to market volatility
Philippines hiked benchmark rate by 25bp to 4.75%
Above expected 12.5bp hike
Abrupt shift to tightening signals BSP likely to undertake further hikes soon
Test Your Knowledge
At last year’s inaugural humanoid-robot half-marathon in Beijing, the fastest robot finished the race in two hours and 40 minutes, more than double the one hour and two minutes for the speediest human. How long did it take this year?
- Two hours and 56 minutes
- One hour and 38 minutes
- 50 minutes
Chart of the Week
The Iran war has delivered more an oil price shock than a gas and electricity price shock, so far. For European manufacturing, that distinction matters. Crude oil price surges pass through to production costs almost immediately, whereas gas and electricity prices are more regulated and governed by longer-term contracts.
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
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.
Rolling Over The Iran Ceasefire
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.
What Is The Market Thinking?
The S&P 500 index has now risen for 12 consecutive days. The 11% gain recorded since its recent March 30 low is in the 99th percentile for 12-day returns. In short, it has been quite a rally. Perhaps most impressive is that the S&P 500 is now back above its February 27 level, when the Iran war started. In this piece, Louis asks if the market is getting too complacent.
Video: Powering Up During The War
The effects of the Iran war are being felt by national power systems globally, but the United States is relatively insulated due to its abundant domestic sources of hydrocarbons. There are, however, winners and losers from this energy shock within the US power system, says Kai Xian. In this video interview he outlines who is up and who is down.
US economy & markets
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.
What Anchors Inflation Expectations?
It is now more than five weeks since Donald Trump said the war against Iran would last “four to five weeks,” and there is no end to the conflict in sight. The more the bombing goes on, and the longer the disruption to energy shipping lasts, the greater the risk of an inflationary bust becomes. Short and medium-term bond market inflation expectations have risen, but longer-term expectations have remained serenely untroubled. What explains the divergence?
Valuing Value
In recent years, value stocks—including energy, materials and industrials—have traded at a generous discount to growth stocks, especially technology-sector growth stocks. But since November 2025, much of that excess valuation discount has been eliminated. So, does it still make sense for investors to hold US value?
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: Has The Fed's Priority Shifted?
Will Denyer
21 Apr 2026
On Tuesday, attention in Washington will focus on the politics surrounding Kevin Warsh’s confirmation as Federal Reserve chair. Assuming Donald Trump’s nominee is ultimately confirmed, Will considers how he may approach the role, and whether he will, as many expect, end up doing the administration’s bidding on monetary policy.
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
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.
Betting Against The Chinese Steamroller
The threat posed by the “Chinese steamroller” to industrial sectors around the world is a concern everywhere, but perhaps nowhere more so than Europe—and higher energy costs are now exacerbating those concerns. But Thomas and Cedric argue that betting on the Chinese steamroller has been the wrong call in recent years: European companies have delivered far more earnings to investors, and that appears likely to continue.
Currencies
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
A New Reflationary Force?
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
