Most recent
Gavekal Research
US Exceptionalism Versus Chinese Uninvestibility (Part II)
Louis-Vincent Gave
11 Feb 2026
In the second paper of this series, Louis explores the extent to which US exceptionalism over the last 15 years was driven by financial engineering encouraged by low interest rates, and how much Chinese uninvestibility owed to heavy capital raising to fund investment in productive assets. Now with US financial engineering getting crowded out by higher rates and the investment needs of AI data centers and long-neglected segments of the economy such as the power grid, he examines whether US outperformance can really continue.
Gavekal Research
What To Do With US$1trn?
Tom Holland
11 Feb 2026
Since the US dollar to renminbi exchange rate broke through its 31-month floor of CNY7.00 on December 29, the Chinese currency has now strengthened by 1.4%. That might not sound much. But it is enough to set off alarm bells about a possible cascade effect that could prove highly significant for asset markets in Hong Kong.
Gavekal Dragonomics
The Downtrend In Auto Demand
Ernan Cui
11 Feb 2026
After five straight years of strong growth, China’s domestic sales of electric vehicles will probably decline in 2026, Ernan Cui argues in this report. EV exports, by contrast, more than doubled in 2025 and can continue to grow rapidly, offsetting some of that domestic weakness. But given the continued decline in demand for cars other than EVs, China’s total auto sales and production are almost certain to slow substantially this year, creating more challenges for Chinese carmakers.
Gavekal Research
The Renminbi’s Future Path
Charles Gave
10 Feb 2026
At the time of writing, the US-dollar-renminbi exchange rate is CNY6.90. At the same time, the yield on five-year US treasuries is 3.73%, while the yield on five-year Chinese government bonds is 1.54%. Charles asks, what is the exchange rate between the US dollar and the renminbi that would leave him indifferent between owning a US bond or a Chinese bond for the next five years?
Gavekal Dragonomics
Consequences Of The Land-Sales Slide
Xiaoxi Zhang
Macro Update: Preparing For Normalization
Wei He, Dragonomics Team
Which Investment Data To Believe?
Andrew Batson
Anti-Corruption Strikes Again
Christopher Beddor
Global Reflation Versus Domestic Deflation
Wei He, Thomas Gatley
Gavekal Research
What, Me Worry About Takaichi?
Udith Sikand
Market Got Warsh-ed
Tan Kai Xian
Mexico Picks A Side In US-China Trade
Thomas Gatley
Geoeconomic Monitor: Who’s The Real Winner?
Tom Holland, Tom Miller
India Turns The Corner
Udith Sikand, Tom Miller
Gavekal Technologies
Beijing’s ‘New Energy System’
Arthur Kroeber, Laila Khawaja, Huang Shichan
The US-China Space Race Intensifies
Laila Khawaja
China’s Vision For AI-Powered Manufacturing
Laila Khawaja
The Lidar Revolution
Tom Hancock, Huang Shichan, Laila Khawaja
Beijing Accelerates Semiconductor Localization
Laila Khawaja
Gavekal-IS
Time To Take Profits On Metals?
Didier Darcet
The Big Long 2.0
Didier Darcet
Measuring Imitation
Didier Darcet
The Manager’s Unspoken Truth
Didier Darcet
Gold And War
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 employment cost index rose 0.7% QoQ in 4Q25, versus 0.8% in 3Q
Softer than 0.8% expected
The US labor market continues to soften, but shows little sign of collapse; watch payrolls report
UK BRC like-for-like retail sales rose 2.3% YoY in Jan, versus 1.0% in Dec
Stronger than 1.3% expected
Disinflation and rate cuts to support consumption in 2026
Sweden's household consumption fell -3.7% MoM in Dec 25, down from 3.0% in Nov
NA
Consumption retreated after strong Nov; fiscal stimulus to support consumption ahead
China's CPI rose 0.2% YoY in Jan, versus 0.8% in Dec
Cooler than than 0.4% expected
Deflationary pressures remain entrenched
Test Your Knowledge
The French government plans to send all 29-year-olds a letter soon. About what?
- To encourage them to enlist in the armed forces while they are still young enough
- Reminding them to have children before it’s too late
- Telling them that drinking up to three glasses of wine a day is good for their health as France’s wine industry suffers from growing abstemiousness
Chart of the Week
China’s anti-corruption campaign has netted its biggest catch in years: Zhang Youxia, deputy chairman of the Central Military Commission. But Zhang is hardly alone: anti-corruption investigators launched more than one million probes last year, and disciplined nearly as many officials. This year the anti-corruption watchdog has vowed to focus on enforcing the upcoming five-year plan, which in practice means the anti-corruption drive will probably function as another tool for top leader Xi Jinping to constrain the power of local-government officials and centralize authority in Beijing.
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: The Global Reach Of A Renminbi Rerating
Louis-Vincent Gave
30 Jan 2026
For years, the extreme undervaluation of the Chinese currency has been the biggest single anomaly in global financial markets. In recent weeks, however, the renminbi has begun to appreciate at an accelerating pace, with the Chinese authorities setting their daily fixing at successively stronger rates. By the standards of other currencies, the moves so far are small. But the implications are far-reaching, and potentially even epochal. In this webinar Louis-Vincent Gave unpacks the importance of the renminbi’s exchange rate for global investors.
Tariff Troubles
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.
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.
US economy & markets
Market Got Warsh-ed
Notwithstanding the ongoing stabilization in markets, two asset groupings saw sharp falls over the past week, testing positioning and risk tolerance, while more defensively positioned and cyclically supported sectors proved relatively resilient. This divergence, better viewed as a rotation than a broad risk-off event, is instructive. Understanding the drivers of this price action should help clarify what comes next in this phase of the market cycle.
The Odd One Out
Despite recent ructions in overbought markets, 2026 has seen bets on an “inflationary boom” continue to play out, with energy, materials and industrials doing well. The odd one out in this scenario has been US financials, despite a macro backdrop that should have favored them. For investors, the key question is whether US banks will benefit in the usual way from a steepening yield curve, or instead become conduits for populist policy risk in an election year.
A Hawkish Fed Choice
Investors have reacted decisively to Kevin Warsh’s nomination to be the next chair of the Federal Reserve, with a series of crowded trades being unwound. Assuming Senate confirmation, Will explains what his appointment would mean for the future of US monetary policy, US central bank independence, the US dollar, gold and other assets.
Behind The Dollar’s Decline
The US dollar took another leg down in Asian trading Wednesday. The DXY index dropped to 96, down -3% from levels around 98.8 as recently as last Thursday, breaking decisively below its trading range of the last seven months. Why is this weakness occurring now? And will it persist?
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: Trump's Affordability Intervention
Tan Kai Xian
5 Feb 2026
US President Donald Trump wants to make US housing more affordable and so assuage voter discontent ahead of November’s midterm elections. In this video interview, Kai Xian assesses measures that the administration has already tried or mooted, as well as others that could be on the docket. He considers what these might mean for housing activity and for the homebuilding industry.
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
The Second Wave Of Europe’s Defense Spending
Russia’s invasion of Ukraine in 2022 triggered panic among European policymakers, who feared a wider European war and were forced to confront decades of underinvestment in defense. In response, European governments scrambled to procure military equipment wherever it could be found. The result was a generational repricing of European defense stocks. The next phase of this rearmament process will see a very different market dynamic that will require investors to take a more discriminating approach, says August.
The Eurozone’s Financial Reflation
Never say never, but the European Central Bank is almost certain to keep its key policy rate unchanged at today’s meeting. The good news for the eurozone is that the end of the rate-cut cycle does not mark the end of a financial reflation that began in 2024, argues Cedric and August.
The Other Side Of Europe’s China Shock
There is no doubt that China’s manufacturing presents a challenge to the European economy. But Thomas and Cedric argue that this is not a simple story of inevitable de-industrialization: there are also opportunities. The European winners from the rise of China’s manufacturing capacity will be firms able to make the best use of cheaper Chinese industrial inputs, and continue commanding higher sales prices both at home and abroad.
Central Bank Balance Sheets In 2026
After spiking money market rates forced the US Federal Reserve to switch from balance sheet contraction to balance sheet expansion via asset purchases in December, Cedric and Will look at whether liquidity stresses could trigger a similar U-turn in 2026 from the European Central Bank.
Currencies
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
How To Think About Renminbi Appreciation
Oil & commodities
Geoeconomic Monitor: Who’s The Real Winner?
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
