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Gavekal Research
Japan’s Mixed Messaging
Udith Sikand
17 Jun 2026
At its policy meeting on Tuesday, the Bank of Japan delivered a masterclass in mixed messaging—some might say obfuscation, says Udith. The takeaway is that the BoJ is happy being seen as behind the curve. In theory, that should keep the yen under pressure and Japanese government bond yields on an upward trajectory. But a changed global backdrop means this may not be the case, he argues.
Gavekal Research
Why Is Hong Kong Struggling?
Louis-Vincent Gave
17 Jun 2026
The Hang Seng China Enterprises Index is now down over the past 12 months. Usually, Chinese companies listed in Hong Kong struggle when the US dollar is strong, onshore equities struggle, real estate is moving lower or the political situation is unsettled. But today, none of the usual culprits can be blamed for the disappointing performance of Hong Kong equities. Louis examines what could be to blame.
Gavekal Research
Demand And Supply Of Money
Louis-Vincent Gave
16 Jun 2026
From post-Iran war reconstruction in the Persian Gulf to the buildout of massive AI data centers, demand for capital is exploding while its supply grows ever scarcer. Unsurprisingly, the price of capital is rising. In this paper, Louis explores who stands to benefit from this new reality.
Gavekal Dragonomics
The Outlook After The Oil Shock
Wei He, Dragonomics Team
16 Jun 2026
China’s economic growth continued to suffer from high oil prices in May, but did not worsen much further from April—in large part because artificial-intelligence-related exports are surging. Wei and the Dragonomics team argue that the US-Iran peace agreement means growth now appears almost certain to accelerate after Q2, though consumption is still a real concern.
Gavekal Dragonomics
Dueling Inflation Dynamics
Andrew Batson
A Warning To Hong Kong’s Gray Market
Xiaoxi Zhang, Wei He
The Regulatory Ceasefire Is Over
Christopher Beddor, Tilly Zhang
The Euthanasia Of The Financier
Christopher Beddor
Oil Reserves Are Missing In Action
Thomas Gatley
Gavekal Research
The War Has Ended And Capital Will Rotate Out Of US Assets
Anatole Kaletsky
Takeaways From The Iran Peace Deal
Louis-Vincent Gave
Geoeconomic Monitor: Changing With The Times
Tom Holland, Tom Miller
Post-IPO Liquidity Stress Syndrome
Will Denyer
Video: A Game Of Two Halves For USMCA
Tom Miller
Gavekal Technologies
The China Shock Comes For Asia
Tom Hancock
Assessing The MATCH Act
Laila Khawaja, AJ Cortese
China’s Nuclear Spring
Damien Ma, AJ Cortese
China Refines Outbound Investment Rules
Laila Khawaja
China’s Export-Control Calculus
Tom Hancock, Laila Khawaja
Gavekal-IS
A Baby Shower For Information As An Asset Class
Didier Darcet
The Thermodynamics Of The Nasdaq
Didier Darcet
The 21st Century Does Not Lack Ideas
Didier Darcet
Hard And Soft Sciences On Growth
Didier Darcet
Economic Regime Shift
Didier Darcet
Gavekal Research
The Energy Shock And The India Growth Story
Tom Miller, Udith Sikand
3 Jun 2026
As energy import costs soar, macro stress is mounting in India. A widening current-account deficit, weakening capital inflows and a falling rupee are putting pressure on the economy just as rising inflation limits policymakers' room to respond. Tom and Udith assess whether this cyclical shock could evolve into a more structural challenge for India's growth story.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US housing starts fell -15.4% MoM to 1.18mn in May, versus -8.5% in Apr
Below expected -2%; building permits fell -0.7% MoM to 1.41mn in May, vs 4.4% in Apr
Affordability issues and high inventories weighing on homebuilding activity
Germany ZEW investor expectations index rose to 10.5 in Jun, versus -10.2 in May
Above expected -5.5; EZ investor expectations index rose to 9.5 in Jun, vs -9.1 in May
Prospect of end to Iran conflict and lower energy prices boosting investor sentiment
Japan hiked benchmark rate by 25bp to 1%
As expected
BoJ continues to remain behind the curve on addressing inflation risks
Australia left benchmark rate unchanged at 4.35%
As expected
Hawkish hold unlikely to last if inflation begins to soften amid pullback in energy prices
Test Your Knowledge
The G7 meeting wraps up today in the border town of Evian-les-Bains in France. But why are Swiss authorities miffed at French arrangements?
- They are stuck with the bill for managing protests at the closest airport, which is in Switzerland
- Diplomats protested that the “Swiss cheese fountain” actually flowed with French cheese
- They are indignant that the G7 summit date was moved at the last minute to accommodate US President Donald Trump’s birthday
Chart of the Week
US net equity issuance was positive in 1Q, for the first time since 2001. Robust dividend growth is keeping the net shareholder payout positive for now. But with mega-IPOs, secondary issues, and shares unlocking months after the IPO, this could all weigh on equity multiples.
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 Wind In Latin America’s Sails
Louis-Vincent Gave, Alexandre Larrain
5 Jun 2026
Away from the uncertainties surrounding the Middle East, and the excitement surrounding all things artificial intelligence, Latin American debt and equity markets continue the bull market that started a couple of years ago. Obviously, rising commodity prices help. But the real driver remains falling bond yields and steady currencies, themselves the product of conservative fiscal and monetary policies and rightward shifts in recent electoral results. Louis and Alexandre discuss the political outlook and how that will shape opportunities for the region.
The Iran War And Fallout
The War Has Ended And Capital Will Rotate Out Of US Assets
It is well known that the first casualty of war is truth. As such, investors could only assume that every market-moving statement from any of the main belligerents in the Iran-Israel-US war that started on February 28 was possibly a lie. In turn, this meant that every financial market in the world was possibly trading at “false prices,” making rational investment analysis very challenging. This situation has now completely changed.
Takeaways From The Iran Peace Deal
A number of “Iran peace deals” have been proclaimed over the past two months. However, this latest one does feel more genuine than its predecessors. Assuming that by next weekend, the Strait of Hormuz is once again open to maritime traffic, and that the Gulf states no longer have to worry about drone or missile strikes, what should be our takeaways?
Video: Oil After Hormuz
Predictions that the depletion of petroleum stocks around the world could push oil prices to US$150/bbl before the end of June if shipping does not resume through the Strait of Hormuz are exaggerated. However, even if there is a preliminary peace deal in the Gulf that allows oil exports to flow once again, countries will look to rebuild stocks and accumulate even bigger precautionary reserves. Even with plentiful supply, this will place a solid bid under oil prices over the medium term.
Oil Reserves Are Missing In Action
China’s stockpiling of oil looked prescient at the outbreak of the Iran war. But Thomas argues that the government does not appear to have dug into those reserves, even amid a sharp falloff in oil imports. The damage will end up being a short-term blip if the Strait of Hormuz reopens soon—but if the closure drags on, policymakers could get more aggressive in using reserves to cushion the dropoff in economic activity.
US economy & markets
Post-IPO Liquidity Stress Syndrome
SpaceX just raised a record US$75bn in its initial public offering on Thursday and may raise another US$11bn through the exercise of the greenshoe option. As investors make room in their portfolios for a deal that could ultimately total US$86bn, this is temporarily weighing on demand for other equities. Although the market should be able to digest an IPO of this size with little more than a temporary period of volatility, Will argues that some medium-term risks to US equities remain.
How Far Can Wealth Effects Go?
The state of the US job market and household wealth effects are the main drivers of US consumption. Since January 2024, the latter has done the heavy lifting, powered by the US equity rally. That said, there are three near-term risks to this trend, argues Kai Xian.
The Macro Outlook For US Earnings
It has been a stellar reporting season for US companies. Given that strong earnings growth has been the principal driver of stock market gains so far in 2026, it is natural to ask whether US corporate profit growth will prove sustainable. At a macro level, the answer depends on two main questions. Will the enthusiasm for artificial intelligence persist? And will the US government budget deficit continue to grow?
Mega-IPOs And Reputation Risk
Unless you have been living on Mars, you know that SpaceX, Anthropic and OpenAI are expected shortly to price the largest initial public offerings in history. In addition, Alphabet just announced a massive secondary share issue. Can the market digest all this new stock? And even if it can, what are the risks these mega-IPOs, together with concurrent changes to index inclusion rules, could blow a hole in some of the best brands in finance: the US equity market in general and the Nasdaq in particular?
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: A Game Of Two Halves For USMCA
Tom Miller
11 Jun 2026
As the US, Mexico and Canada jointly host the world’s biggest sporting event, the football world cup, the governments of the three countries will sit down to review the trilateral USMCA trade agreement that came into force in 2020. In this video interview, Tom Miller looks at the goals each team is aiming for in the review, assesses the likely outcomes of the review process and gauges their potential macro effects—good and bad—for the three economies.
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
The War Has Ended And Capital Will Rotate Out Of US Assets
It is well known that the first casualty of war is truth. As such, investors could only assume that every market-moving statement from any of the main belligerents in the Iran-Israel-US war that started on February 28 was possibly a lie. In turn, this meant that every financial market in the world was possibly trading at “false prices,” making rational investment analysis very challenging. This situation has now completely changed.
Switzerland’s 10 Million Question
From time to time, Switzerland’s political system produces votes on policy proposals that send shivers down the spines of its business and financial community. Another such episode will conclude this Sunday June 14 when Swiss voters go to the polls to adopt or reject a proposal to cap the country’s population at 10mn people. Cedric argues that if implemented, the cap could seriously threaten its macroeconomic success and harm its relationship with the EU.
An Insurance Rate Hike In Frankfurt
The European Central Bank will kick off a round of major developed market central bank meetings when it convenes on Thursday, ahead of the Bank of Japan, Federal Reserve and Bank of England, all of which meet next week. Investors will be looking for guidance on how policymakers intend to respond to a negative supply shock in energy markets which is
pushing inflation up and economic growth down.
A Tale Of Two Krone(a)s
The Norwegian krone has been Europe’s best-performing currency this year, but the real story is not just oil. While higher crude prices have helped, the more important driver has been Norway’s inflation and interest rate dynamics. These underlying forces are best illustrated by comparing Norway’s economic performance with that of neighboring Sweden, says August. Such an analysis points to a currency trend that may have run its course.
Currencies
Demand And Supply Of Money
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?
Oil & commodities
Video: Oil After Hormuz
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
