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Gavekal Research
The State Of World Oil Stocks
Tom Holland
2 Jun 2026
In recent days, we’ve heard some apocalyptic warnings from oil industry executives about the depleted state of global petroleum stocks, and what will happen if Washington and Tehran fail to agree an interim peace deal that gets tanker traffic flowing through the Strait of Hormuz again. These guys know their industry. But are oil stocks really so run down that if the US and Iran cannot agree a preliminary truce in the next few days, we will see oil prices spike another 50% to US$150/bbl before the month is over?
Gavekal Research
Liquidity Injections And Liquidity Drains
Louis-Vincent Gave
2 Jun 2026
Investors think they are trading an AI revolution. They may actually be trading a liquidity cycle, says Louis. The closure of the Strait of Hormuz may have temporarily released hundreds of billions of dollars into financial markets, helping to fuel the surge in semiconductor stocks. Yet the same forces could soon reverse. As inventories are rebuilt and mega-IPOs such as SpaceX absorb unprecedented amounts of capital, can the semiconductor boom survive once liquidity starts flowing elsewhere?
Gavekal Research
Three Regions, Three Demographic Challenges
Louis-Vincent Gave
1 Jun 2026
The world’s three largest economic regions all face significant demographic challenges, though the effects on their economies and societies differ markedly. In this piece, Louis examines how demographic pressures are unfolding in Europe, the US and China, the policy responses being deployed and the implications these responses may have for each region’s long-term economic trajectory.
Gavekal Research
Should We Fear The Jobpocalypse?
Tan Kai Xian
1 Jun 2026
Job losses caused by AI are already happening. In recent weeks, companies from Cisco to Standard Chartered have announced job cuts as the new technology renders workers redundant. Nevertheless, for investors the jury is still out whether the coming upheavals in the labor market will be positive or negative at the macroeconomic level and for markets.
Gavekal Dragonomics
AI Expansion Hits Limits In China
Tilly Zhang
Dialing Back Expectations For Appreciation
Wei He
Consumer Defaults Are Climbing
Xiaoxi Zhang
The Invisible Barriers To Migration
Ernan Cui
The Reversal For Migrant Workers
Ernan Cui
Gavekal Research
Geoeconomic Monitor: Dialogue And Discord
Tom Miller, Cedric Gemehl, Tom Holland
Shifting Conclusions From The Crises Of The Past 30 Years
Louis-Vincent Gave
Video: Will Warsh Spook The Bond Market?
Will Denyer
China’s Youth Unemployment Issue
Louis-Vincent Gave
Beyond The Sorry Case Of European Equities
Cedric Gemehl, August Gudmundsson
Gavekal Technologies
China’s Export-Control Calculus
Tom Hancock, Laila Khawaja
Introducing Huawei’s ‘Tau (τ) Scaling Law’
Laila Khawaja
The Battery Design Battle
AJ Cortese
The AI Boom’s Critical Minerals Problems
Laila Khawaja
Webinar: US-China Tech Competition After The Beijing Summit
Arthur Kroeber, Laila Khawaja, AJ Cortese
Gavekal-IS
The 21st Century Does Not Lack Ideas
Didier Darcet
Hard And Soft Sciences On Growth
Didier Darcet
Economic Regime Shift
Didier Darcet
Chinese Impressions
Didier Darcet
Understanding Asset Price Trajectories (Part II)
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 ISM manufacturing index rose to 54 in May, from 52.7 in Apr
Above expected 53
Broad-based upswing partly driven by restocking; weak jobs component is worrying
Eurozone M3 money supply rose 2.7% YoY in Apr, versus 3.2% in Mar
Rise less than expected 3.1%; loans to NFCs up 3.4% YoY, loans to households up 3%
Slowing activity and tighter financial conditions will weigh on credit cycle
German retail sales fell -0.3% MoM in Apr, the same pace as in Mar
Fall less than expected -0.5%; YoY, retail sales fell -0.3% in Apr, versus -0.2% in Mar
Consumption to remain weak amid higher energy prices and rising interest rates
South Korea's CPI rose 3.1% YoY in May, versus 2.6% in Apr
Inflation warmer than expected 2.9%; core CPI rose 2.5% YoY in May, versus 2.2% in Apr
Broadening price pressures and solid growth outlook ensures rate hikes ahead
Test Your Knowledge
Between April 28 and May 27, the Bank of Japan spent almost US$74bn intervening in the foreign exchange market to prop up the yen. At that rate of intervention, how long would it take to burn through Japan’s foreign exchange reserves?
- Six months
- 15 months
- Three years
- Six years
Chart of the Week
In an effort to preserve foreign exchange reserves, India has raised import tariffs on gold and silver from 6% to 15%. This may only slightly dampen demand for gold in India, but a reversal of the current account deficit would require a heavy cutback of imports. If Indians stopped buying gold, it would give the Reserve Bank of India more breathing room, reduce inflationary pressure and help strengthen the rupee, but India may also face job losses, an industry slowdown, culture shock and reduced financial security for many families. A much more meaningful option would be a round of foreign capital raising.
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: US-China Tech Competition After The Beijing Summit
Arthur Kroeber, Laila Khawaja, AJ Cortese
20 May 2026
Donald Trump came to Beijing for his summit with Xi Jinping determined to secure a lot of business for American companies. Despite the positive vibes, the US and China are locked in an intense technology competition, with each side working to build up its own tech ecosystem while using export controls and investment restrictions to hold back the other's progress. In the first edition of a monthly webinar series by Gavekal Technologies, semiconductor/AI analyst Laila Khawaja and new energy analyst AJ Cortese join Arthur Kroeber to discuss the risks that lie ahead for tech companies trying to navigate the US-China rivalry.
The Iran War And Fallout
Rose-Tinted Markets
Markets in Asia largely shrugged off the news Tuesday morning that the US military had launched fresh attacks against targets in Southern Iran, preferring Monday’s narrative that Washington and Tehran are on the edge of sealing a preliminary peace deal that will reopen the Strait of Hormuz to international shipping. A deal might be in the offing, but trust is low, the obstacles are formidable and progress is slow.
The Oil Shock Arrives
The general expectation had been that China would weather the shock better than many other economies. The April data instead showed that it is hitting the economy harder than expected. Wei and the Dragonomics Team argue that the economy will continue to absorb
damage as long as oil prices remain high, but policymakers will remain hesitant to introduce meaningful stimulus unless the bad data persists into the coming months.
An Orderly Stagflation—So Far
Recent data releases confirm that the eurozone is heading into a near-term future of slower growth and faster inflation as the economy feels the effects of higher energy prices triggered by the Iran war. But so far, the impact has been absorbed relatively smoothly. This suggests the eurozone economy is adjusting in an orderly fashion, and is not falling into a full-blown crisis.
A Stress Test, Not A Collapse
It is now 10 weeks since the Iran war led to the suspension of almost all energy trade through the Strait of Hormuz. While the physical oil market has exhibited stress, futures market pricing continues to imply a full resumption of Middle Eastern exports in the next three months. In this paper, Leonid Mironov examines the state of the oil market’s buffers against a continued supply shock—the state of inventories and possible workarounds to bypass Hormuz—to assess where the market is working, and where it is mispricing risk.
US economy & markets
Should We Fear The Jobpocalypse?
Job losses caused by AI are already happening. In recent weeks, companies from Cisco to Standard Chartered have announced job cuts as the new technology renders workers redundant. Nevertheless, for investors the jury is still out whether the coming upheavals in the labor market will be positive or negative at the macroeconomic level and for markets.
Warsh’s Balance Sheet
Investors have two key concerns about the outlook for US monetary policy under Kevin Warsh’s leadership of the Federal Reserve: will his Fed continue to target 2% inflation, and will the institution’s balance sheet be cleansed? Will tackled the first question in a separate paper. In this report, he focuses on potential changes to the Fed’s balance sheet and their implications for markets.
South Korea’s Shipbuilding Hedge
The AI boom which has powered South Korea’s spectacular equity rally is not the only theme in town. Another is the deepening geopolitical and economic alignment between Seoul and Washington as the US moves to strengthen its national security industrial base. As such, the US Navy may soon outsource part of its warship design and construction to South Korea. If this materializes, Kai Xian says that Korean shipbuilding companies could become major beneficiaries.
The Other US Capex Question
Everyone wants to know whether the AI capital expenditure boom will prove sustainable, and whether it will ever generate the hoped-for returns. But there is another question almost as important: what is happening to capex outside the AI sector, and why?
China chartbook
Gavekal Dragonomics
Macro Update: Grappling With External Uncertainties
Wei He, Dragonomics Team
7 May 2026
China’s economic growth was solid in the first quarter, and policymakers announced plans to dial back fiscal stimulus. But domestic demand remains sluggish, and both the Iran war and global AI spending boom have created new uncertainties around the economic trajectory. In their latest quarterly chartbook, Wei and the Dragonomics team take stock of China’s economic performance and the outlook for the coming months.
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: Will Warsh Spook The Bond Market?
Will Denyer
28 May 2026
Global bond investors have plenty of concerns to keep them awake at night, including the likely actions of a new Federal Reserve chair. While most attention has focused on Kevin Warsh's inflation-fighting credentials, Will outlines a series of potential changes to the Fed's core operations that could have far-reaching implications.
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
Beyond The Sorry Case Of European Equities
Investors in European equities must fondly remember 2025 as a rare period when European equities outperformed global equities. That now feels like a long time ago. Cedric and August examine the two factors getting the blame for European underperformance this year and look for catch-up opportunities.
China Plugs Into Europe’s Auto Demand
European car sales are benefiting from a cyclical upswing in demand, and the recent rise in gasoline and diesel prices driven by the Iran war is skewing demand towards hybrid and electric vehicles. For now, demand favors hybrid-electric vehicles, in which established manufacturers have an edge in the European market. But the structural trend is towards battery-electric vehicles, where Chinese brands have the edge. August asks whether European brands can catch up and assesses the economic consequences.
Europe’s New Fiscal Faultlines
European sovereign bond yields have been rising lately. Most of these increases have been driven by market expectations of short-term interest rate increases. Most, but not all. For some, a small part of the rise is attributable to investor concerns over long-term fiscal sustainability. However, Europe’s fiscal faultlines have shifted; the group of countries most severely affected will not be the same as in the debt crisis of the early 2010s.
An Orderly Stagflation—So Far
Recent data releases confirm that the eurozone is heading into a near-term future of slower growth and faster inflation as the economy feels the effects of higher energy prices triggered by the Iran war. But so far, the impact has been absorbed relatively smoothly. This suggests the eurozone economy is adjusting in an orderly fashion, and is not falling into a full-blown crisis.
Currencies
Dialing Back Expectations For Appreciation
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
Oil & commodities
The State Of World Oil Stocks
Geoeconomic Monitor: After Beijing
Copper, Oil And Gold
The Message In The Oil Curve
Geoeconomic Monitor: The War Takes Its Toll
Video: Japan's Macro Dilemma
