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Corporate Stress In The UK

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Corporate Stress In The UK

Nick Andrews
27 Mar 2023
Having lately reacquired the “sick man of Europe” sobriquet, the UK’s economic performance has now picked up and Britain is likely to duck a recession. But banking stress will limit the credit reaching the real economy, compounding growing distress in the corporate sector.
Deregulation And Decoupling For IPOs

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Deregulation And Decoupling For IPOs

Thomas Gatley
27 Mar 2023
China’s securities regulators are simultaneously tightening regulation of offshore listings, and significantly deregulating onshore listings. Thomas argues that the new rules will add momentum to the trend towards US-China financial decoupling by ensuring that the vast majority of Chinese firms list onshore in future.

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Wicksellian Bonds

Didier Darcet
24 Mar 2023
Not much in the financial world is free, but one exception is the cost-free benefit that comes from diversifying a portfolio by combining different assets like stocks and government bonds. The decision whether, or not, to invest in bonds depends on their expected real return.

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The Inversion Signal Gets Inverted

Charles Gave
24 Mar 2023
Consider the US yield curve expressed as the arithmetical difference between the return of a 10-year government bond and a three-month T-bill. Each time this differential has swung into negative territory, a US recession has unfolded in fairly short order—until now.
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Chart of the Week

Week 11, 2023
Thailand is among the countries most eagerly awaiting a rebound in Chinese tourism. Before the pandemic halted outbound travel, Chinese visitors made up 25-30% of tourist arrivals in the Land of Smiles. Though they aren't considered the biggest spenders, a return of Chinese tourists is all but certain to provide a fillip to the Thai economy, which depends on tourism for as much as 10% of GDP. More tourist spending will also help support the Thai baht, which in recent years has been weighed down by concerns over the widening current account deficit and negative real interest rates.
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Ukraine Fallout

China Risks Sliding Into A Proxy War
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The Ultimate Head Fake
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Behind Russia’s Oil Production Cut
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Investing For A New Cold War
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Russia, Do Your Worst
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Who Is Copying Who? Part II
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Webinar: China’s New Agenda

Wei He, Thomas Gatley
24 Mar 2023
Hoping to turn the page on a traumatic 2022, China’s government has unveiled a new agenda to be carried out by fresh faces in 2023. In this webinar our China team discusses the outlook for the economy, the political risks and the drivers for markets.

India chartbook

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India Macro Update: Normalization In Sight

Udith Sikand, Tom Miller
13 Dec 2022
Indian economic growth data is all over the place. Despite some positive signs, especially the upturn in the investment cycle, rising external volatility and domestic policy tightening mean growth could slow a little more, contend Udith and Tom. Here, they unpick the factors influencing India’s macro picture and markets.

China chartbook

Gavekal Dragonomics

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Macro Update: Reversal, Reopening, Recovery

Dragonomics Team
27 Jan 2023
China’s remarkable reversal of Covid policies in late 2022 has set the stage for an equally unusual economic recovery in 2023. It’s early days yet, but consumer activity is quickly normalizing, and this consumption-led rebound will gather strength in coming months. Our latest quarterly chartbook examines the prospects and market implications of this recovery.

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Securing The Western Frontier

Tom Miller
China looks like a winner from the US withdrawal from Afghanistan, now free to tighten its grip on Central Asia. In this DeepChina report, Tom explains the complex reality of the latest round of the "great game." China is getting closer to Russia, skeptical of Afghanistan and Pakistan, and consolidating its economic hold on Turkmenistan.

Latest video

Gavekal Dragonomics

Video: The State Of China's Recovery

Christopher Beddor
17 Mar 2023
China’s hotly anticipated economic indicators for January and February, released this week, revealed for the first time the state of the economic recovery after the reopening from Covid containment. Christopher unpacks what the data show and the likely trajectory for growth this year.

Oil & commodities

Peace Breaks Out
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Clash Of Empires Update: Identifying Winners And Losers
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The Ultimate Head Fake
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Behind Russia’s Oil Production Cut
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Anchored Much?
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Of Gold And Oil
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China tech

China Risks Sliding Into A Proxy War
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Video: The Asian Trade Cycle Lives
The Semiconductor Stranglehold Tightens
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Eight Questions For China’s Tech Sector In 2023
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A Respite In The Strategic Rivalry
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The Enforcement Challenge For US Chip Controls
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Covid-19

The Reopening Recovery Is On Track
Economic indicators for January and February provided the first clear picture of how the economy is faring after the reopening from Covid containment. The Dragonomics team argues that on the whole, the data point to a decent recovery driven by the property sector and household consumption, and is likely to continue in the months ahead.
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Video: Shifting Global Fund Flows
After years of US dollar strength, 2023 opens with the prospect that Chinese holders of US dollars now begin to deploy the funds they accumulated over Covid. Meanwhile, the Bank of Japan may shift policy and spark repatriation flows. Louis examines the implications.
Macro Update: Reversal, Reopening, Recovery
China’s remarkable reversal of Covid policies in late 2022 has set the stage for an equally unusual economic recovery in 2023. It’s early days yet, but consumer activity is quickly normalizing, and this consumption-led rebound will gather strength in coming months. Our latest quarterly chartbook examines the prospects and market implications of this recovery.
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Webinar: China’s Covid Surge And The Reopening Rally
China continues to reel from a massive wave of Covid infections, but cases may have already peaked in most places. In this webinar our China team discussed the pace of reopening and its market implications. Ernan Cui provided the latest updates on the Covid situation, and Thomas Gatley assessed how far the reopening rally has to run.
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From the archives: oldies but goodies

Deficit Deniers Of The World Unite
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Deficit Deniers Of The World Unite

Anatole Kaletsky
In our politically correct age the pressure to bow down before certain popularly accepted and apparently proven “truths” can be overwhelming. In the aftermath of the US elections, two such nostrums are unnecessarily vexing investors—the urgency of deficit reduction and fear of higher taxes. I believe that both of these obsessions will soon be forgotten.
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Are We Entering into Revolutionary Times?
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Are We Entering into Revolutionary Times?

Louis-Vincent Gave
The role of a society’s elite is to rise to the challenges of the times, and find solutions fitting to those times, even if this involves a radical break with the past. But the modus operandi for most leaders is to try and maintain the status quo. But if the problems are large enough, this does not work, and the same challenges reappear until either a solution is found, the elite is replaced by a new elite, or the country, system or civilization disappears.
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The High Cost Of Free Money
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The High Cost Of Free Money

Charles Gave
Perhaps the most famous economic law is the one that there is no such thing as a free lunch. By keeping US short rates at abnormally low levels beyond the financial crisis and as growth bounces back beyond the dreams of the wildest optimists, the Fed increasingly seems to be trying to ‘feed the US economy for nothing’. This is worrying, for extended periods of cheap money typically come back with a hefty price tag.
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