Most recent
Gavekal Research
The Four Costs That Matter
Louis-Vincent Gave
23 Sep 2026
Revisiting his framework for comparing economies through the costs of capital, labor, energy and government, Louis says that China now enjoys striking advantages over the US in the first three. Yet policy uncertainty has kept Chinese consumers and businesses cautious. , while the US risks moving in the opposite direction. He argues that a narrowing of the long-standing gap in policy predictability between China and the US could have profound implications for global markets.
Gavekal Research
Worse Than A Crime
Charles Gave
23 Sep 2026
On Monday, Louis advanced several possible reasons for the preternatural calm of financial markets in the face of the deepening energy crisis, which has now seen crude oil prices climb more than 60% year-to-date, and US diesel prices rise almost 90%. To his explanations, Charles adds his own perspective, based on Gavekal’s longstanding Four Quadrants framework for portfolio managers.
Gavekal Dragonomics
The Export Wave Is Cresting
Andrew Batson
23 Sep 2026
China’s latest extraordinary export wave is showing signs of cresting, with headline export growth leveling off. The boom in AI-driven exports is not over yet, but current super-high growth rates will probably slow in the coming months, Andrew argues in this piece. That’s mainly due to prices of memory chips, now the biggest single swing factor for China’s exports, though one with limited implications for its competitiveness in other goods.
Gavekal Research
The Nordic Model Under Deglobalization
August Gudmundsson
22 Sep 2026
The Nordic economies may look vulnerable to the same industrial pressures weighing on Germany, but much of their adjustment took place during the 2010s, when manufacturers shifted production abroad while retaining a specialized core at home. With domestic demand now recovering, August says the Nordics appear better placed than Germany to navigate a less global world and a potential new China shock
Gavekal Dragonomics
A Reluctant Rise In EV Prices
Ernan Cui
Why Households Are Deleveraging
Wei He, Xiaoxi Zhang
Governance Over Growth
Andrew Batson
The Energy Shock Moderates
Wei He, Dragonomics Team
Still Waiting For EV Consolidation
Ernan Cui
Gavekal Research
More Merzschmerz
Cedric Gemehl
The Non-Threatening Energy Crisis
Louis-Vincent Gave
Geoeconomic Monitor: Summit Season
Tom Holland, Tom Miller
Where The US Is (Still) Exceptional
Tan Kai Xian, Cedric Gemehl
Video: The Challenge For Fixed Income Investors
Louis-Vincent Gave
Gavekal Technologies
Breaking Up Is Hard To Do
Tom Hancock, AJ Cortese
The US-China AI Safety Debate
Laila Khawaja
The China New Energy Guidebook
Arthur Kroeber, AJ Cortese, Laila Khawaja, Ernan Cui, Huang Shichan, Damien Ma
A China Tech Report Card
Arthur Kroeber, AJ Cortese, Tom Hancock
The Deployment Challenge For Cheap Solar
AJ Cortese
Gavekal-IS
When Asia Revalues…
Didier Darcet
Where Does The Money Go?
Didier Darcet
The Macroeconomics Of AI In Practice
Didier Darcet
The Macroeconomics Of AI: Part II
Didier Darcet
The Macroeconomics Of AI In Simple Terms
Didier Darcet
Gavekal Research
Desperately Seeking An Anchor
Charles Gave, Louis-Vincent Gave
14 Sep 2026
Charles and Louis argue that a new monetary anchor is emerging in Asia, centered on the renminbi, just as Western currencies and bond markets are becoming less reliable stores of value. With most of the world’s excess savings generated in Asia, more capital will stay in the region rather than flow into Western assets, eroding structural support for the US dollar, euro and Western bond markets.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US Richmond Fed manufacturing index fell to -2 in Sep, from 4 in Aug
Below expected 2
Price components are weighing on manufacturing
Eurozone consumer confidence index fell to -16.5 in Sep, from -15.5 in Aug
Below expected -16
Higher energy prices and rate hike expectations are weighing on consumer sentiment
UK CBI industrial trends order book balance index rose to -9 in Sep, from -25 in Aug
Above expected -35
Upside surprise indicates UK manufacturing sector is seeing uneven recovery
Taiwanese export orders rose 71.4% YoY in Aug, versus 61.9% in Jul
Stronger than expected 63%; monthly orders exceeded US$100bn for the first time
No sign of rollover in AI-driven demand for semiconductors
Test Your Knowledge
Why has there been friction between Japan and China at the United Nations General Assembly?
- China is claiming sovereignty over a newly emerged volcanic island off Okinawa
- The Japanese prime minister referred to Taiwan as a “friendly state”
- China has asserted that Japan is still classed as an “enemy state” under the UN charter
Chart of the Week
The yen is the cheapest major currency in the world today. But this has been true for years, during which the yen has continued to weaken. What has changed in recent months is that Japanese bond yields now look attractive. Based on Maurice Allais’ “golden rule” which compares long-term bond yields to nominal GDP growth (defined here as a 7-year moving average), Japan now offers not only an undervalued currency but also compelling bond valuations. This may explain why global asset allocators like NBIM are planning to increase exposure to JGBs.
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: Autumnal Trouble Ahead?
Louis-Vincent Gave, Charles Gave, Anatole Kaletsky
11 Sep 2026
Global markets are being roiled by geopolitical tensions, rising bond yields and uncertainty over the outlook for inflation and monetary policy. At the same time, the AI boom and shifting trade and capital flows are reshaping the global economic and investment landscape. In our first webinar of the autumn season, Gavekal’s founding partners discuss what these crosscurrents mean for markets and how investors should position their portfolios.
The Iran War And Fallout
The Non-Threatening Energy Crisis
This weekend’s media made for sobering reading. Between bombs flying in the Middle East, more refineries blowing up in Russia and US senators calling for petroleum export bans, it felt like enough negative news flow to send hearts racing. But most major global equity markets remain close to all-time highs. Louis examines the possible reasons for this counterintuitive configuration.
No Good Outcomes For Energy Inflation
It is Wednesday. Warring parties in the Middle East are again exchanging fire, and energy prices are spiking. For investors, it may be tempting to shrug off the latest flare-up, but disregarding the latest escalation in the Persian Gulf would be rash. Developments in the region will matter greatly for the trajectory of inflation over the coming months, and therefore for financial markets.
The Record High Diesel Prices
Because of soaring crack spreads, diesel prices everywhere around the world are making new all-time highs, at least in nominal terms. In real terms, the diesel price is still lower than the 2022 spike that followed the start of the Ukraine war. But Louis points out that with a real term diesel price above US$5/gallon, few good things happen.
The Limits Of Economic Fury
The US administration is now switching its focus to a campaign of “economic fury” in an effort to achieve its strategic aims against Iran. It is not obvious that this latest phase of the conflict is any more likely to result in a quick and easy US victory than the kinetic war. However, the
economic implications of a prolonged stand-off may be less ominous than they at first appear.
US economy & markets
Where The US Is (Still) Exceptional
Compared with European stocks, US stocks are no longer exceptional. Over the past four years, there has been no sustained trend in the relative performance of the two. That said, at the sector level, US consumer discretionary and staples stocks have continued to outperform their European counterparts.
Dario Cannot Pace The AI Frontier, But Real Yields Might
The AI investment boom came under renewed threat Saturday when Anthropic’s chief executive argued that his company and others should “slow the pace” of model development to ensure safe deployment. At the same time, there is growing grassroots pressure to regulate the pace of data center deployment. Long-term bond yields have also climbed quickly. These are all potential threats to the AI capex boom. But how likely is each to seriously throttle investment?
Central Banks Under Pressure
Amid a slew of central bank meetings this week, those of the Federal Reserve and Bank of Japan will garner particular attention. Both face political pressure, rising inflation and higher bond yields, leaving investors keen to see how policymakers respond and how markets react. Will and Udith do not expect policy to be the main driver of a shift in capital from the US to Japan, but argue that there is strong case for overweighting Japanese bonds.
Incentives And Imbalances
The Trump administration wants to reduce the US external deficit, but the incentives needed to do so are not yet in place, says Kai Xian. Strong asset prices encourage US households to spend and attract foreign capital, while notwithstanding recent treasury market ructions, fiscal pressure remains limited. Unless expensive US equities and an overvalued dollar fall under their own weight, the US external deficit is therefore likely to remain large or widen further.
China chartbook
Gavekal Dragonomics
Macro Update: Pushed And Pulled
Wei He, Dragonomics Team
3 Aug 2026
China’s economy is being pushed and pulled by two external shocks: the supply shock from the Iran war and the demand shock from the AI capex boom. Both are creating lots of volatility in trade flows, prices and profits, although the underlying trend of the domestic economy has not yet changed much. Neither are China’s policymakers showing much sign of significantly changing course. In our latest quarterly chartbook, Wei and the Dragonomics team diagnose the current situation and the policy outlook.
India chartbook
Gavekal Research
India Corporate Update: Waiting For Capex
Rohan Daswani, Udith Sikand
28 Aug 2026
India remains one of the world’s strongest growth stories, supported by resilient domestic demand, improving corporate balance sheets and strong credit growth. Yet as the boost from public infrastructure investment fades, the big question is whether these strengths can finally translate into a sustained revival in private investment. Rohan and Udith assess the prospects for that transition and the implication for Indian equities, where performance is increasingly diverging across sectors.
Latest video
Gavekal Research
Video: The Challenge For Fixed Income Investors
Louis-Vincent Gave
17 Sep 2026
So far this decade, US treasuries have delivered no returns whilst European government bonds have delivered negative returns. Japanese government bonds have been an unmitigated disaster. The one major government bond market that did deliver positive returns has been China’s .Following a dismal five years, is it time to return to OECD government bonds?
Strategy Chartbook
Gavekal Research
Quarterly Strategy Review: 2Q26
Louis-Vincent Gave
3 Jul 2026
The second quarter was dominated by an extraordinary surge in risk appetite as semiconductor stocks powered one of the largest increases in global equity market capitalization on record, yet beneath the exuberance, markets underwent significant macro shifts. Louis reviews the quarter's defining developments.
Emerging markets
EMs Are The New DMs
Emerging-market bonds have dramatically outperformed their developed-market peers since 2020, helped by greater policy credibility, deeper domestic financial markets and reduced reliance on foreign investors. With DM bond yields now hitting multi-year highs, policymakers may increasingly look to the EM playbook, including softer forms of financial repression, to stabilize their markets, says Udith. From the US to Japan, signs of this shift are already emerging, suggesting that EMs may have a thing or two to teach DMs.
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.
Europe's economy
The Nordic Model Under Deglobalization
The Nordic economies may look vulnerable to the same industrial pressures weighing on Germany, but much of their adjustment took place during the 2010s, when manufacturers shifted production abroad while retaining a specialized core at home. With domestic demand now recovering, August says the Nordics appear better placed than Germany to navigate a less global world and a potential new China shock
More Merzschmerz
In German, the language with a word for everything, Merzschmerz describes the pain of struggling for 50 years to climb the political ladder, only to get to the top and find that no one wanted you as leader, they just couldn’t think of anyone else. Well, for Germany’s federal chancellor, Friedrich Merz, the hurt has not faded over time. Speculations about a Kanzlertausch—a change of chancellor—are swirling. Cedric reads the political tea leaves.
Where The US Is (Still) Exceptional
Compared with European stocks, US stocks are no longer exceptional. Over the past four years, there has been no sustained trend in the relative performance of the two. That said, at the sector level, US consumer discretionary and staples stocks have continued to outperform their European counterparts.
Higher Rates; Uneven Pain
The European Central Bank delivered a well-telegraphed 25bp rate hike on Thursday, putting the policy rate at the upper bound of the 1.75% to 2.5% range the ECB estimates is neutral for the eurozone economy. Any further interest rate hikes will push monetary policy increasingly into restrictive territory. The question for investors therefore is how much any further hikes will put a brake on eurozone economic activity.
Currencies
Important Recent Developments
The Slump In Asian Currencies
A Concentrated Inflationary Boom Or A Bet On The Fed?
Demand And Supply Of Money
Dialing Back Expectations For Appreciation
Monetizing US Budget Deficits
Oil & commodities
No Good Outcomes For Energy Inflation
Video: Towards An Uncertain Winter For Energy
The Quid Pro Quo That Wasn’t
The Energy Risk Remains (Part I)
Energy Markets Are Too Complacent
Video: Oil After Hormuz
