Most recent
Gavekal-IS
Economic Regime Shift
Didier Darcet
14 May 2026
The conflict in the Middle East is set to have far-reaching implications for tactical portfolio management. Not because markets have suffered meaningful direct losses, but because a major turning point in the global cycle is now forcing investors to reposition themselves, says Didier.
Gavekal Research
Warsh, Inflation And US Bonds
Will Denyer
14 May 2026
On Wednesday the US Senate confirmed Kevin Warsh to succeed Jerome Powell as chair of the Federal Reserve this Friday. Warsh will get no honeymoon period. After high US inflation prints, in intraday trading Wednesday, 10-year US treasury yields touched 4.5% for the first time since June 2025. And at almost 2.5%, the breakeven inflation rate on 10-year treasuries is close to its high for the last three years. Will breakeven inflation rates break higher from here? If so, how will the Fed and its new leader respond? What will this mean for US bond yields?
Gavekal Research
Video: Modi Calls For Sacrifice
Udith Sikand
13 May 2026
In a bid to curb precious metals purchases and defend the currency, India has more than doubled import tariffs on gold and silver. The move follows calls from Prime Minister Narendra Modi for Indians to tighten their belts as the country reels from a soaring energy import bill following the closure of the Strait of Hormuz. Udith explains how mounting stresses in the currency market could ripple through Indian politics and asset markets.
Gavekal Research
Stable Financial Systems Versus Unstable Financial Systems
Charles Gave
13 May 2026
Charles argues that before committing the first dollar to any asset, investors should ask a simple but critical question: are they investing in a stable system or an unstable one? Strangely, he finds this question is rarely framed clearly at the outset of most investment processes. In this piece, he explains why overlooking it can prove to be a dangerous shortcoming.
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
An Orderly Stagflation—So Far
Cedric Gemehl, August Gudmundsson
A Regime Change In Motion
Louis-Vincent Gave, Leonid Mironov
What To Expect From The Trump-Xi Summit
Arthur Kroeber
Starmer’s Ruin Is Bullish For UK Assets
Anatole Kaletsky
Grappling With The Semiconductor Bull Market
Louis-Vincent Gave
Gavekal Technologies
Corporate America’s Beijing Shopping List
Laila Khawaja
Triumphant Technology, Murderous Market
Tom Hancock, Ernan Cui, AJ Cortese, Leonid Mironov
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
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 PPI rose 6% YoY in Apr, versus 4.3% in Mar
Above expected 4.8%; PPI ex-food & energy rose 5.2% YoY in Apr, versus 4% in Mar
The breadth of this PPI increase will make the Fed more likely to hike rates
Eurozone industrial production rose 0.2% MoM in Mar, the same pace as in Feb
Weaker than expected 0.3%; YoY, production fell -2.1% in Mar, versus -0.8% in Feb
Stockpiling is cushioning the stagflationary impact on activity of energy price shock
French unemployment rate rose to 8.1% in 1Q26, versus 7.9% in 4Q25
Jobless rate higher than 7.8% expected
Energy shock weakening job market; uptick exaggerated by technical factors
Japan Eco Watchers survey current conditions index fell to 40.8 in Apr, from 42.2 in Mar
Below expected 41.5; outlook index rose to 39.4 in Apr, from 38.7
Energy shock has driven sentiment gauge to 4y low; BoJ will be less eager to hike rates
Test Your Knowledge
Global military spending rose by 2.9% in real terms from 2024-25. What would the figure be if US spending was excluded?
- A decline of 1%
- An increase of 5%
- An increase of 9%
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
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.
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?
US economy & markets
Warsh, Inflation And US Bonds
On Wednesday the US Senate confirmed Kevin Warsh to succeed Jerome Powell as chair of the Federal Reserve this Friday. Warsh will get no honeymoon period. After high US inflation prints, in intraday trading Wednesday, 10-year US treasury yields touched 4.5% for the first time since June 2025. And at almost 2.5%, the breakeven inflation rate on 10-year treasuries is close to its high for the last three years. Will breakeven inflation rates break higher from here? If so, how will the Fed and its new leader respond? What will this mean for US bond yields?
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.
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: Modi Calls For Sacrifice
Udith Sikand
13 May 2026
In a bid to curb precious metals purchases and defend the currency, India has more than doubled import tariffs on gold and silver. The move follows calls from Prime Minister Narendra Modi for Indians to tighten their belts as the country reels from a soaring energy import bill following the closure of the Strait of Hormuz. Udith explains how mounting stresses in the currency market could ripple through Indian politics and asset markets.
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
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.
Starmer’s Ruin Is Bullish For UK Assets
Conventional opinion in Britain has it that a defenestration of Keir Starmer will spur a lurch to the left and the embrace of tax and spend policies that hurt the outlook for UK assets. Anatole disagrees with this stance and says that Britain may now offer an interesting contrarian opportunity for equity, currency and possibly even bond investors.
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.
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
