Most recent
Gavekal Research
A Stress Test, Not A Collapse
Leonid Mironov
8 May 2026
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.
Gavekal Dragonomics
Video: Takeaways From The Beijing Auto Show
Ernan Cui
8 May 2026
Chinese and global automakers showed off their latest electric vehicles at this year’s Beijing Auto Show, which wrapped on May 3. There are many impressive new Chinese EVs, but the latest models of some of the global automakers are just as innovative and cheap. Ernan Cui argues that after falling behind their Chinese rivals, some of the global auto brands have found ways to both improve their EV tech and lower prices—though that involves some costly trade-offs.
Gavekal Research
Funding For AI
Tan Kai Xian
8 May 2026
The boom in US artificial intelligence-related profits and investment continues to gather momentum. Yet beneath the optimism, concerns are emerging over how this investment surge is being funded. However, Kai Xian remains optimistic and looks at the factors supporting the expansion.
Gavekal Research
Webinar: Is Trump Making Europe Great Again?
Anatole Kaletsky, Cedric Gemehl, August Gudmundsson, Simon Pritchard
8 May 2026
US economic actions, on the face of it, threaten Europe’s strategic and economic wellbeing. The continent’s export industries have been roiled by the US president’s trade war, while the attack on Iran risks an inflationary surge as energy prices climb. At the same time, Donald Trump appears to be stepping back from the Atlantic alliance and has reduced support for Ukraine. Our panel addresses whether this new reality signals a death knell for the European integration project, or whether it is the catalyst Europe needs to rethink both its economic and strategic models.
Gavekal Dragonomics
Macro Update: Grappling With External Uncertainties
Wei He, Dragonomics Team
Foreign EV Makers Fight Back
Ernan Cui
False Hope For Infrastructure Investment
Wei He
Shanghai’s Stealth Mortgage-Rate Cut
Xiaoxi Zhang
Why Corporate Margins Will Take A Hit
Thomas Gatley
Gavekal Research
Navigating The AI Bubble: An Update
Will Denyer
Chinese Green Tech And The Energy Security Conundrum
Tom Miller
Asian Damage Control
Udith Sikand, Tom Miller
The High Cost Of Free Money (Part II)
Charles Gave
Energy Versus Semiconductors
Louis-Vincent Gave
Gavekal Technologies
Arming Up For The Trump-Xi Summit
Laila Khawaja
A Western Hemisphere Strategy For Rare Earths
Damien Ma, Tom Hancock, Laila Khawaja
China Blocks Meta-Manus Deal
Laila Khawaja
Looking For Battery Life After LFP
Damien Ma, Laila Khawaja, AJ Cortese
On The Ground At China’s Tech Conferences (Part II)
Laila Khawaja
Gavekal-IS
Chinese Impressions
Didier Darcet
Understanding Asset Price Trajectories (Part II)
Didier Darcet
Understanding Asset Price Trajectories (Part I)
Didier Darcet
The Neutral Portfolio
Didier Darcet
The Market’s Take On Global Trade
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 unit labor costs rose 2.3% QoQ annualized pace in 1Q26, versus 4.6% in 4Q25
Below expected 2.5%; nonfarm productivity rose 0.8% QoQ, versus 1.6% in 4Q
Downtick in labor costs amid continued productivity gains reinforces cases for Fed hold
Germany factory orders rose 5% MoM in Mar, versus 1.4% in Feb
Above expected 1%; YoY, factory orders rose 6.3% in Mar, versus 3.5% in Feb
Broad-based rise reflects both strong underlying demand and stockpiling
Sweden left benchmark rate unchanged at 1.75%
As expected
Riksbank signaling measured stance as inflation undershoots forecast despite energy shock
Mexico cut benchmark rate by 25bp to 6.5%
As expected
Banxico signaling end of rate cut cycle amid upside risks to inflation from energy shock
Test Your Knowledge
The World Bank manages about US$280bn in loans and has some 21,000 staff. Now armed with a total lending ceiling of US$205bn, how many personnel does the US International Development Finance Corporation have?
- 700
- 2,400
- 15,000
Chart of the Week
The accumulation of large US dollar balances by oil producers has long been the lynchpin of the petrodollar thesis to explain the US dollar’s dominance. What is less appreciated is that the current account surpluses of Northeast Asian economies have generally exceeded the surpluses of Gulf Cooperation Council economies.
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: Is Trump Making Europe Great Again?
Anatole Kaletsky, Cedric Gemehl, August Gudmundsson, Simon Pritchard
8 May 2026
US economic actions, on the face of it, threaten Europe’s strategic and economic wellbeing. The continent’s export industries have been roiled by the US president’s trade war, while the attack on Iran risks an inflationary surge as energy prices climb. At the same time, Donald Trump appears to be stepping back from the Atlantic alliance and has reduced support for Ukraine. Our panel addresses whether this new reality signals a death knell for the European integration project, or whether it is the catalyst Europe needs to rethink both its economic and strategic models.
The Iran War And Fallout
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.
Asian Damage Control
Almost 10 weeks after ships stopped sailing through the Strait of Hormuz, the pain in Asia from the disruption to fuel and feedstock supplies is finally showing up in the macro data. The question for investors is whether rising economic pain triggers a bout of contagion selling and a financial shock across the region, as during the Asian Financial Crisis of 1997. Udith and Tom argue that there are two major reasons to think Asia will avoid a full-blown financial crisis.
Energy Versus Semiconductors
In April, the MSCI World semiconductor index rose 27%. Over the same period, the MSCI World energy index fell -2.1%. In its collective wisdom, the market seems to be telling investors not to worry about the near-term possibility of an Iran-war-induced energy crisis, but instead to worry that the rollout of artificial intelligence solutions will trigger semiconductor shortages on a grand scale. The performance of the market now raises a question: what could energy bulls be missing?
Geoeconomic Monitor: Casualties
The United Arab Emirates' decision to pull out of Opec was a surprise, but it did not come out of the blue. The UAE has long complained about the tightness of its Opec production quotas. However, the timing of its announcement suggests the decision was more driven by its hard line against Iran and its frustration with the more conciliatory stance of other Gulf Arab states led by Saudi Arabia. This may have post-war costs for the UAE, writes Tom Holland. Also, Tom Miller examines the position of Pakistan after the UAE called in a US$3.5bn loan to Islamabad, and Yanmei Xie looks at Spain's open-door policy for Chinese inward investment.
US economy & markets
Funding For AI
The boom in US artificial intelligence-related profits and investment continues to gather momentum. Yet beneath the optimism, concerns are emerging over how this investment surge is being funded. However, Kai Xian remains optimistic and looks at the factors supporting the expansion.
Navigating The AI Bubble: An Update
The artificial intelligence capital spending boom rages on, as evidenced by strong earnings releases and even stronger equity rallies from AI-related companies in the US and globally. With no clear signs of fatigue, the more relevant question is how durable this cycle is, what shape its key drivers are in and what could derail it.
The Fed’s New Chair And Shadow Chair
The key outcome of this week’s Federal Reserve policy meeting was not any change to policy, it was Jerome Powell’s decision to remain on the central bank’s board of governors after his term as chair ends on May 15. This raises the prospect that Powell could serve, if need be, as a “shadow chair”. It also reduces the tail risks of the Fed losing its monetary policy independence and shifting its goals toward persistently higher inflation.
Addressing Jobless Growth
The US economy is entering a phase of jobless growth, where GDP expands but employment fails to keep pace—and in some cases contracts. Labor market strength has long been a reliable signal of broader US economic health, which makes this divergence notable. Investors will need to understand what is driving the shift and how it is likely to shape the policy response.
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 Dragonomics
Video: Takeaways From The Beijing Auto Show
Ernan Cui
8 May 2026
Chinese and global automakers showed off their latest electric vehicles at this year’s Beijing Auto Show, which wrapped on May 3. There are many impressive new Chinese EVs, but the latest models of some of the global automakers are just as innovative and cheap. Ernan Cui argues that after falling behind their Chinese rivals, some of the global auto brands have found ways to both improve their EV tech and lower prices—though that involves some costly trade-offs.
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
Food For The ECB Hawks
The European Central Bank held interest rates steady on Thursday, but said that risks to inflation and growth stemming from the Iran war had “intensified”. As energy prices continue to grind higher, the policy bias is being tilted toward higher rates. The near-term inflationary impulse stems almost entirely from energy effects, argues August.
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.
Currencies
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
Behind The Dollar’s Decline
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
