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Gavekal Research
Video: Geopolitics Tests EU Unity
Cedric Gemehl
26 Mar 2026
Over the last week, voters have cautiously backed centrist politicians in a series of European elections. The process of political fragmentation has hardly reversed in Europe, but many voters are seeking practical answers to difficult questions at a time when Europe feels besieged in both strategic and economic terms. In this interview, Cedric discusses what this more realistic mood means for European Union integration.
Gavekal-IS
What To Do? Stay Put
Didier Darcet
26 Mar 2026
Sound portfolio management does not rely on prediction, because the world is fundamentally uncertain, says Didier. Worse still, forecasts follow a brutal law: the more precise they become, the more likely they are to be wrong. He applies this insight to the dilemma faced by portfolio managers at the current moment because of confused signaling associated with the Iran war.
Gavekal Research
The Policy Trap
Udith Sikand, Research Team
26 Mar 2026
For governments around the world, the policy response to the Iran war energy shock is relatively clear: if necessary chuck out fiscal rules in an attempt to protect the economy from higher energy prices. For central bankers, the choice is tougher: tighten monetary policy early to counter inflationary pressure, or hold back from raising rates and run the risk of playing catch-up further down the road. Either way, the balance of risk points to interest rate increases.
Gavekal Research
Webinar: Second-Order Effects
Tom Holland, Tan Kai Xian, Cedric Gemehl, Udith Sikand
26 Mar 2026
The economic fallout from the war in Iran is broadening as disrupted energy markets drive oil and gas prices higher and leave policymakers with difficult dilemmas if they are to avoid a 1970s stagflationary cycle from unfolding. Our panel considers the latest developments on the ground in the Persian Gulf and assesses what this means for the US, Europe and emerging economies.
Gavekal Dragonomics
The Stagflation Reaction Function
Andrew Batson
The Property Bottom Is Not Yet Here
Xiaoxi Zhang
China’s Continuing Competitiveness
Andrew Batson
Waiting For The Iran Impact
Wei He, Dragonomics Team
Out Of Deflation, Into Cost-Push Inflation
Thomas Gatley, Wei He
Gavekal Research
Oil Crisis? What Oil Crisis?
Tom Holland
The Reserve Asset Of Choice
Charles Gave, Louis-Vincent Gave
Policy Responses To The Sell-Off
Louis-Vincent Gave
Shattered Assumptions And The Energy Quandary
Louis-Vincent Gave
That 1970s Vibe
Tom Holland
Gavekal Technologies
China’s AI Compute Shortage
Laila Khawaja
The Electric Vehicle Consolidation Challenge
Ernan Cui, Tom Hancock, Laila Khawaja
Another Round Of Analog Chip Price Hikes
Laila Khawaja
China Targets Full-Chain Chip Breakthrough
Laila Khawaja
Will AI Supercharge The China Shock?
Laila Khawaja, Tom Hancock
Gavekal-IS
Rare Cases Of Risk Asymmetry
Didier Darcet
The Global Portfolio Regatta
Didier Darcet
Money Creation, Interest Rates And Wealth Creation
Didier Darcet
Time To Take Profits On Metals?
Didier Darcet
The Big Long 2.0
Didier Darcet
Gavekal Research
On Price Controls And Export Restrictions
Louis-Vincent Gave
9 Mar 2026
In the eyes of the voting public and of US allies, Donald Trump would very much carry the blame for the surging oil price. And with eight months to go before the midterm elections, this would leave the White House in a political predicament. If oil prices stay above US$100/bbl, the pressure on Trump to “do something” about rising prices will become intense, with the troubling prospect of price controls and export restrictions on the horizon.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US current account deficit narrowed to US$191bn in 4Q25, from US$239bn in 3Q
Narrower than expected US$209bn
Narrowest deficit since 2021 driven by primary swing to surplus and tariff distortions
German IFO business climate index fell to 86.4 in Mar, from 88.4 in Feb
Above expected 86.3; expectations index fell to 86 in Mar, from 90.2 in Feb
Prolonged energy shock likely to continue weighing on business sentiment
UK CPI rose 3% YoY in Feb, the same pace as in Jan
As expected; core CPI rose 3.2% YoY in Feb, versus 3.1% in Jan
Rate cuts on hold as energy spike ignites inflation worries; expect hawkish tilt from BoE
Sweden's economic tendency index rose to 99.9 in Mar, from 99.7 in Feb
NA; mfg confidence index rose to 100.7 in Mar, from 97.7 in Feb
Private sector sentiment remains upbeat as fiscal stimulus begins to kick in
Test Your Knowledge
The Bank of England is planning a new series of banknotes. Along with the king, what is their design likely to feature?
- Classic dishes of British cuisine
- Wind turbines and solar panels
- Hedgehogs
Chart of the Week
Oil prices are shifting FX rates across Asia, driven by energy dependence. More oil-intensive countries, such as Thailand, South Korea, and India are facing greater pressure, while less oil-intensive countries, such as China and Indonesia, are faring better. This reflects a terms-of-trade shock; higher energy prices threaten importers. If prices stay elevated, FX dispersion will likely widen.
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: Second-Order Effects
Tom Holland, Tan Kai Xian, Cedric Gemehl, Udith Sikand
26 Mar 2026
The economic fallout from the war in Iran is broadening as disrupted energy markets drive oil and gas prices higher and leave policymakers with difficult dilemmas if they are to avoid a 1970s stagflationary cycle from unfolding. Our panel considers the latest developments on the ground in the Persian Gulf and assesses what this means for the US, Europe and emerging economies.
Tariff Troubles
After The SCOTUS Tariff Ruling
The shift in the tariff landscape following the US Supreme Court’s ruling on Friday that all tariffs imposed by Donald Trump under IEEPA—the 1977 International Emergency Economic Powers Act—are illegal is good news for equity investors. But it is not great news, writes Will Denyer.
The EM Triple Whammy On Full Display
It would be tempting to ascribe the simultaneous US dollar, bond, and equity market sell-off to the self-owned “crisis” around Greenland and to Trump’s threat to use tariffs against (former?) friends to force a change of sovereignty. Still, the current sell-off in bonds, and equities, may also be driven by other important factors, says Louis.
How Europe Will Respond To Trump’s Greenland Tariffs
On Saturday, US president Donald Trump threatened new tariffs on eight European countries over their opposition to his plans to annex Greenland. Since then, attention has shifted to how Europe might respond. Cedric argues that conciliation and deescalation remains Europe’s first response to Trump’s new tariff threat, but there is now a greater chance that the EU retaliates in earnest if that strategy fails.
Video: Supreme Court v. Trump’s Trade Policy
Initial questioning by US Supreme Court justices in a landmark trade policy case suggests that a majority believe the Trump administration unlawfully invoked emergency powers to impose broad tariffs on importers. In this interview, Will outlines the key issues at stake and considers Trump’s possible next steps if the government loses.
US economy & markets
Bearish Gold
Gold looks increasingly vulnerable to a major correction. The rally of the past two years, which has seen the price more than double, was been driven by several factors. Monetary easing by the central banks since mid-2024 supported prices, official and private investors sought diversification in the metal, and there were concerns over Federal Reserve independence. At least two of these drivers now appear to be weakening.
More Resilient Than You Think
“Economic activity is nothing but energy transformed,” as Charles often intones. When the Iran war began on February 28, oil and gas prices spiked and global equities sold off. But US companies are better positioned than most to absorb prolonged higher energy costs if Middle Eastern oil and gas supply remains disrupted, because they have become more adept at “transforming” energy.
War, Monetary Policy And Forex
The Iran war has introduced an inflationary shock into the global economy, complicating central banks’ plans to ease monetary policy. The key question for currency markets is how policymakers respond to the resulting energy-driven inflation. Which path they choose will depend largely on where inflation stood before the war began—and those differences could prove decisive for currency performance in the months ahead.
The Impacts Of War On US Consumption
A sustained war in the Middle East that drives energy prices sharply higher would normally be expected to weigh on US consumption. The key question is how large the effect may be. To answer that, Will and Kai Xian consider the channels through which this faraway conflict could affect the US consumer: energy prices, energy investment, interest rates and wealth effects.
China chartbook
Gavekal Dragonomics
Macro Update: Preparing For Normalization
Wei He, Dragonomics Team
4 Feb 2026
China’s policymakers are satisfied with economic performance in 2025, and appear confident that 2026 will be a more ordinary year that allows for a more normal policy stance. But domestic demand remains lackluster, and it’s unclear whether recent positive momentum in some areas can be sustained. In their latest quarterly chartbook, Wei and the Dragonomics team take stock of China’s economic performance and the outlook for the year ahead.
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: Geopolitics Tests EU Unity
Cedric Gemehl
26 Mar 2026
Over the last week, voters have cautiously backed centrist politicians in a series of European elections. The process of political fragmentation has hardly reversed in Europe, but many voters are seeking practical answers to difficult questions at a time when Europe feels besieged in both strategic and economic terms. In this interview, Cedric discusses what this more realistic mood means for European Union integration.
Strategy Chartbook
Gavekal Research
Global Strategy: Best And Worst Trades For 2026
Louis-Vincent Gave, Charles Gave, Anatole Kaletsky, Will Denyer, Tan Kai Xian, Cedric Gemehl, August Gudmundsson, Thomas Gatley, Udith Sikand, Tom Miller
8 Jan 2026
Past performance is no guide to future returns, and the trend is not always your friend. As such, Gavekal writers consider their most compelling 10 macro trades for 2026, on both the upside and the downside. If one theme runs through our developed-market views, it is the expectation for a sustained inflationary boom. That story is different in China, but Chinese firms look to be on the right side of an energy transition with room to run. The view on gold is nuanced, especially seen through the lens of Japanese investors facing extreme asset valuations.
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
Consuming Through An Energy Shock
As hydrocarbon prices surge amid tit-for-tat attacks against energy infrastructure in the Persian Gulf, European households look exposed. Last week, we argued that this energy crisis was less threatening than the one Europe faced after Russia invaded Ukraine. Even so, the impact will depend on the size and duration of the disruption as well as the response of labor markets, fiscal policy and household saving rates.
Europe’s Energy Shock: Not 2022 All Over Again
Europe remains a large net importer of energy, so higher global energy prices typically translate into higher inflation and weaker growth. The question for investors is whether
the latest shock will prove as severe as Europe’s 2022 energy crisis. Cedric argues that the Old Continent will probably take a softer punch this time around, and analyzes the impact on its assets.
Sweden As An Indicator Of Capital Flows
The debate over whether global investors are beginning to reduce exposure to US assets has intensified. After a decade of US equity outperformance, dollar strength and deep capital market dominance, signs of diversification are emerging. Sweden offers an unusually clear window into this change.
Poland’s Advantages
In recent years, Poland’s economy has grown far faster than those of neighbors Czechia, Hungary and Slovakia. This divergence within the “Visegrád Four” coincided with a sharp widening in Poland’s fiscal deficit from 1.7% of GDP in 2021 to around 6.8% in 2025. In this report, August explains why that fiscal largesse has not undermined the longer term Polish growth story, which continues to benefit from tailwinds as it plays catchup with economies to its west and protects against a menacing Russia to its east.
Currencies
Video: Hong Kong’s Renminbi Question
What To Do With US$1trn?
On The False Price Of The Yen
Behind The Dollar’s Decline
A New Reflationary Force?
Don’t Bet On A Forever Weak Yen
Oil & commodities
Video: Japan's Macro Dilemma
Winners And Losers Of The Iran War
The Iran War Uncertainties
Injurious Exposure
Dire Straits
Geoeconomic Monitor: The Iran Outcome
