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Gavekal Research
China Tour Feedback
Louis-Vincent Gave
9 Oct 2026
After Gavekal Technologies’ first corporate access tour of China, Louis answers participants’ questions about involutionary competition, prospects for the US reshoring drive, and the performance outlook for China’s financial markets.
Gavekal Research
Are Yields Rising Too Fast For Banks?
Tan Kai Xian
9 Oct 2026
US bank stocks have lagged the broader equity market since the start of September, with the S&P 500 bank index down -7.5% against a 1% gain for the S&P 500. Curiously, this has happened during an inflationary boom, which should favor banks. While higher yields typically benefit lenders by allowing them to charge more on loans and earn higher returns on their securities holdings, a rapid rise in yields can break things and hurt the sector. KX argues there are reasons to think these concerns will prove short-lived.
Gavekal Dragonomics
The Other Energy Shock
Wei He
9 Oct 2026
China’s government has argued that abundant domestic coal supplies have allowed it to escape the damage from oil shortages seen in other countries. But Wei argues that China has also been experiencing a coal-supply shock that is entirely domestic in origin—a shock that underscores how officials are willing to tolerate somewhat higher energy prices and slower growth as they prioritize other policy aims.
Gavekal Research
Webinar: Bond Market Blues
Anatole Kaletsky, Will Denyer, Cedric Gemehl
9 Oct 2026
Holders of developed world bonds experienced a world of pain in the third quarter of 2026, with long-dated US treasuries making a loss of -7.6% and equivalent French bonds down almost -15% in US dollar terms. In this webinar, founding partner Anatole Kaletsky, US chief economist Will Denyer and European economist Cedric Gemehl examine the forces driving the brutal sell-off in major debt markets and ask whether the time is approaching for investors to buy bonds once again.
Gavekal Dragonomics
A Two-Track Property Stabilization
Xiaoxi Zhang
An Unbalanced Earnings Cycle
Thomas Gatley
Subsidizing Mortgages
Wei He, Dragonomics Team
Infrastructure Is Becoming Ineffective
Wei He
Industrial Policy Delivers A Fiscal Payoff
Tilly Zhang
Gavekal Research
The Chip War Comes To Southeast Asia
Tom Miller
Three Tests For French Spreads
Cedric Gemehl
Video: Into The Midterms
Will Denyer
India’s Hawkish Turn
Udith Sikand, Tom Miller
The Bolsonaro Swing
Louis-Vincent Gave
Gavekal Technologies
Capitalizing On China’s Data Advantage In AI
Laila Khawaja
Great Tech In Search Of Profits
AJ Cortese, Laila Khawaja
GavekalTech On The Ground: 2026 China Tech Trip Takeaways
Laila Khawaja
Chinese EV Makers’ European Offensive
AJ Cortese
Webinar: The State Of China Tech
Arthur Kroeber, Laila Khawaja, AJ Cortese
Gavekal-IS
Why Aren’t Stocks Plunging?
Didier Darcet
Amathia
Didier Darcet
When Asia Revalues…
Didier Darcet
Where Does The Money Go?
Didier Darcet
The Macroeconomics Of AI In Practice
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
Germany trade surplus narrowed to €19.5bn in Aug, from €21.6bn in Jul
Wider than expected €19bn; exports (6.2% YoY) rose faster than imports (5.5% YoY)
Trade surplus to narrow amid competitiveness issues and stronger domestic demand
Japan real household spending fell -3.1% YoY in Aug, versus -3.6% in Jul
Above expected -3.6%
Despite rising wages, inflation eating into purchasing power; BoJ to hike cautiously
Taiwan trade surplus widened to US$23.6bn in Sep, versus US$22.3bn in Aug
Wider than expected US$19bn; exports (60.9% YoY) rose faster than imports (51.7% YoY)
Strong AI-related demand continues to underpin robust export growth outlook
Mexico CPI rose 3.5% YoY in Sep, versus 3.3% in Aug
As expected; core CPI rose 3.8% YoY in Sep, versus 3.9% in Aug
Easing core inflation is positive, but cautious Banxico likely to remain on hold for now
Test Your Knowledge
Why did registrations for Slovenian web domain names which end in “.si” increase 2,100% in September from the month before?
- Rumor has it Nvidia’s next chip will be named something to do with silicon, for which the suffix is the chemical symbol, and they will be looking to buy relevant web domains
- Donald Trump has proclaimed that artificial intelligence should be called “super intelligence” instead
- In a bid to become a digital hub, Slovenia is giving away all national web domains for free
Chart of the Week
China’s infrastructure investment fell -5.4% YoY in the year through August, a decline that has been reflected in the order books of major state-owned infrastructure builders. The drop is driven by several factors, not least underwhelming returns on infrastructure projects and heightened central-government scrutiny of investment. Such factors are unlikely to change soon, and infrastructure spending could even become a persistent drag on growth.
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: Bond Market Blues
Anatole Kaletsky, Will Denyer, Cedric Gemehl
9 Oct 2026
Holders of developed world bonds experienced a world of pain in the third quarter of 2026, with long-dated US treasuries making a loss of -7.6% and equivalent French bonds down almost -15% in US dollar terms. In this webinar, founding partner Anatole Kaletsky, US chief economist Will Denyer and European economist Cedric Gemehl examine the forces driving the brutal sell-off in major debt markets and ask whether the time is approaching for investors to buy bonds once again.
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
Are Yields Rising Too Fast For Banks?
US bank stocks have lagged the broader equity market since the start of September, with the S&P 500 bank index down -7.5% against a 1% gain for the S&P 500. Curiously, this has happened during an inflationary boom, which should favor banks. While higher yields typically benefit lenders by allowing them to charge more on loans and earn higher returns on their securities holdings, a rapid rise in yields can break things and hurt the sector. KX argues there are reasons to think these concerns will prove short-lived.
Are US Long Bonds A Buy? (Part IV)
US bonds face an unappealing near-term backdrop of persistent inflation, Fed tightening and heavy public and private-sector issuance. Yet unlike in 2022, valuations now favor bonds over equities, while rising real yields are approaching levels that could start to constrain capital spending and growth. For Will, this argues against going overweight bonds, but makes a neutral position increasingly attractive as a hedge against a sudden change in the investment environment.
Another Blow For Bonds?
The 10-year US treasury yield broke through the 5% level to hit 5.11%, its highest since the outbreak of the credit crunch in July 2007. With inflation pressure persistent and the Federal Reserve on a tightening track, yields could rise further in the near term. In addition, there are growing signs that the US labor market may be set to tighten, pushing both wage growth and inflation higher.
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.
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: Into The Midterms
Will Denyer
7 Oct 2026
With less than four weeks to go before the US midterm elections, the Democratic Party is odds-on to win the House of Representatives and may take control of the Senate too. In this video interview, Gavekal chief US economist Will Denyer looks at what the expected electoral swing to the Democrats is likely to mean for the possibility of impeachment hearings, fiscal policy, tariffs, financial regulation and legislation on artificial intelligence.
Strategy Chartbook
Gavekal Research
Quarterly Strategy Review: 3Q26
Louis-Vincent Gave
5 Oct 2026
After the third quarter saw a brutal sell-off in major government bond markets, with yields breaking out to a generational high, Louis takes stock. In this Quarterly Strategy Review, he examines the forces driving the sell-off and asks the key questions facing investors everywhere.
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
Three Tests For French Spreads
After touching 150bp last Friday, October 2, the 10-year OAT-bund spread retraced to 127bp on Tuesday, before widening again to 139bp Thursday. Rather than beginning a meaningful tightening, the spread appears to be undergoing a repricing which is likely to see it settle somewhere between 125bp and 300bp. However, this is a remarkably broad range. So, what forces could push spreads towards either the floor or ceiling of this band over the coming months?
Reasons To Start Buying Bonds
After four and a half years of steadfast bearishness on bonds, Anatole argues that after the latest sell-off, the relentless rise in US yields may be coming to an end—at least for the next year or two. This is not because fundamentals have improved. Rather it is because the bond market no longer trades on fundamentals, but on short term expectations of Federal Reserve policy, and the Fed has a mandate to preserve US government solvency. In this report, he explains why it now makes sense to start buying bonds again.
How Wide Can French Spreads Get?
Over the last three weeks of September, the sovereign yield spread between 10-year French OATs and 10-year German bunds widened 40bp, hitting 127bp on Wednesday. That is a gap last seen in June 2012, just weeks before Mario Draghi’s “whatever it takes” speech. Inevitably, therefore, France’s current bond market stresses have evoked memories of the euro crisis, and left investors wondering: just how wide could French spreads get this time around?
Burnham Starts Transforming Britain
Burnham’s speech to the Labour Party conference announced a cutback in pension spending that was unthinkable under Starmer. More importantly, it showed an openness to
possible U-turns in fiscal policy, EU relations and electoral reform. While the initial market reaction to Burnham’s speech was indifference or skepticism, there are three reasons why this really could be a turning point in Britain’s financial fortunes.
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
