Most recent
Gavekal Dragonomics
Macro Update: Running On Exports
Wei He, Dragonomics Team
3 Nov 2026
China’s GDP growth improved in Q3, and it is now almost certain that full-year growth will land within the targeted range. But that growth is highly uneven and heavily reliant on exports, while domestic consumption remains weak by almost any measure. Policymakers may well need to introduce more policy support in order to meet their growth goals next year. In our latest quarterly chartbook, Wei and the Dragonomics team examine the state of China’s economy and the outlook going into 2027.
Gavekal Research
A Silver Lining Or A Shovel?
Louis-Vincent Gave
3 Nov 2026
In recent meetings with North American clients, a persistent question has been: who are the mugs that will end up holding the bag on the now rapidly evolving French debt crisis? As things stand, for many investors France has now become “uninvestible”. But as with any investment thesis, it always makes sense to consider hoe it could be wrong. Or, in this case, how could France snatch survival from the jaws of the debt crisis it is facing?
Gavekal Dragonomics
Trying To Save The Slow Bull Market
Thomas Gatley, Xiaoxi Zhang
2 Nov 2026
On November 2, the People’s Bank of China said it would provide additional financing through a swap facility for institutional investors to purchase equities, in a bid to arrest the stock-market decline. But Thomas and Xiaoxi argue that despite the PBOC’s intervention, China’s stock-market volatility has once again waylaid attempts to foster a “slow bull” market by demonstrating to households that equities are a risky asset.
Gavekal Research
France, The US, And The Golden Rule
Charles Gave
2 Nov 2026
Charles argues that the Federal Reserve has lost control of global real interest rates as the breakdown of the petrodollar system means that surplus countries no longer need to recycle their savings into US assets, leaving market forces to determine borrowing costs. For debt-trapped economies such as France and the UK, the effect could be dramatic.
Gavekal Dragonomics
Anti-Corruption After The Plenum
Andrew Batson
How To Get Growth In 2027
Wei He
Switching The Policy Rate
Wei He
The Struggle To Commoditize AI
Tilly Zhang
Growth Target Secured
Wei He, Dragonomics Team
Gavekal Research
The Case For More Mega-Cap Outperformance
Tan Kai Xian
Geoeconomic Monitor: Election Season
Tom Miller, Tom Holland, Will Denyer
In UK Budget, No News Is Good News
Anatole Kaletsky
One Thing After Another
Louis-Vincent Gave
Video: TIPS, Nominals Or Both?
Will Denyer
Gavekal Technologies
How Wuxi AppTec Stayed Sanction-Proof
Tom Hancock
Who Is Consuming Chinese Tokens?
Laila Khawaja
Power Lessons From China
AJ Cortese
Beijing Draws New Boundaries For AI Exports
Laila Khawaja
The State Of Chinese AI
Arthur Kroeber, Laila Khawaja
Gavekal-IS
Complexity Versus Hierarchy
Didier Darcet
The Big Neutral
Didier Darcet
Why Aren’t Stocks Plunging?
Didier Darcet
Amathia
Didier Darcet
When Asia Revalues…
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
US ISM manufacturing index rose to 55.5 in Oct, versus 54.5 in Sep
Above expected 54.5
Indicative of continued mfg sector expansion with nascent signs of price pressures easing
Germany retail sales in real terms fell -2% MoM in Sep, versus 1.2% in Aug
Below expected 0.4%; YoY, retail sales fell -2.3% in Sep, versus -0.3% in Aug
Higher energy costs generating consumption squeeze among households
Italy S&P Global manufacturing PMI fell to 49.4 in Oct, versus 50.4 in Sep
Below expected 49.9
Falling output and orders point to industrial weakness unfolding ahead
South Korea CPI rose 2.8% YoY in Oct, versus 2.9% in Sep
As expected; core CPI rose 2.8% YoY in Oct, the same pace as in Sep
Spillover effects from AI boom likely to keep BoK on guard against upside risks to inflation
Test Your Knowledge
Nvidia is reportedly imposing a new rule on its cloud computing customers. What is it?
- No more than 49% of their business can come from Chinese companies
- Customers cannot use rivalling chips, even in their own data centers
- Only customers that pass a financial health check can “buy now, pay later”
Chart of the Week
US inflation accelerated in September, with the headline consumer price index rising 3.7% year-on-year, up from 3.4% in August. This was hardly surprising given elevated energy prices, which were bound to feed through to consumer prices. The question for investors and policymakers is whether price pressures will spread through the economy, pushing up long-term inflation expectations, as some Federal Reserve officials fear.
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: Shudders In The Tech Complex
Louis-Vincent Gave, Anatole Kaletsky
24 Oct 2026
As investors contemplate a possible end to the AI investment boom, government bonds have caught a bid over the last week. Louis and Anatole discuss whether such a denouement is likely to occur and what this would mean for the macroeconomic outlook and the performance of core asset classes.
The Iran War And Fallout
One Thing After Another
From Brazil’s election shock and the Anthropic IPO to shifting Middle Eastern alliances and the prospect of peace in Ukraine, a hectic week of developments has thrown up fresh risks and opportunities for investors. Louis examines eight major events and their market implications, including the potential opening of Canada’s energy sector, China’s offshore tax crackdown and India’s efforts to attract foreign capital.
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.
US economy & markets
The Case For More Mega-Cap Outperformance
October was a tough month for the mega-cap tech stocks that have driven US market outperformance over the last 10 years. Since early October, Nvidia, Meta and Alphabet stocks have fallen as investors have grown nervous about how the AI capex boom is being financed and jittery about the returns big tech companies will earn on the trillions they have poured in so far. So, is the era of mega-cap outperformance coming to its end? There are solid reasons to think not.
Geoeconomic Monitor: Election Season
This week’s elections dealt crushing blows right-wing candidates in Brazil and Serbia. With next week’s US midterms looking ominous for the Republicans, voters appear to be turning against the populist right. Upcoming elections in Spain and France will show whether the tide has turned, says Tom Miller. If Israel and the US restart their bombing campaign in Iran, global oil prices will surge to new highs, writes Tom Holland. And there is little Congress can do to stop it, even if the Democrats take the Senate in the midterms, argues Will Denyer.
Lost Privilege
Increasingly over recent years, foreign investors have shifted to buying US assets for the superior returns they generate, rather than as reserves of value for safeguarding their wealth. This shift has several implications for the US's primary income balance, the current account deficit and US markets.
Higher Yields And Corporate Profits
Equity investors were served a morsel of optimism Wednesday, as Meta’s chairman Mark Zuckerberg claimed the company’s AI investments “are paying off". Yet after a sharp sell-off in the shares of indebted AI names, many investors remain jittery. They fear that with equity market performance powered heavily by the AI capex boom, higher yields will erode US corporate profits, triggering a broader sell-off.
China chartbook
Gavekal Dragonomics
Macro Update: Running On Exports
Wei He, Dragonomics Team
3 Nov 2026
China’s GDP growth improved in Q3, and it is now almost certain that full-year growth will land within the targeted range. But that growth is highly uneven and heavily reliant on exports, while domestic consumption remains weak by almost any measure. Policymakers may well need to introduce more policy support in order to meet their growth goals next year. In our latest quarterly chartbook, Wei and the Dragonomics team examine the state of China’s economy and the outlook going into 2027.
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: TIPS, Nominals Or Both?
Will Denyer
29 Oct 2026
With US treasury bonds having gotten more reasonably valued, Will says that both nominal bonds and TIPS deserve a place in balanced portfolios. In this video interview, he explains how the two instruments offer protection against different economic outcomes.
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
In UK Budget, No News Is Good News
When the British government presents a budget which turns out to be a total non-event, it should be seen as a cause for celebration and a bullish event for UK financial markets. This is what happened this week. Anatole argues that it is too early to say whether Burnham’s economic policies will make sense, but a properly strategic reassessment of economic policy, welfare reform, fiscal plans and European relations will happen.
The French Effect On ECB Policy
The market expects the European Central Bank’s bigwigs to leave their policy rate unchanged when they sit down in Frankfurt on Wednesday for their two-day meeting. On one front, inflation is above-target and accelerating. On the other, sovereign stresses are mounting, especially in France. This confronts policymakers with a question: with the French bond market under pressure, can they continue to raise interest rates to combat inflation?
Pricing Europe’s Winter Demand For Natural Gas
So far, the Iran war energy shock has affected European consumers almost entirely through the channel of higher oil-product prices. But as the European Union heads into winter with historically low levels of natural gas in storage, the necessity of paying up to secure imports of liquefied natural gas over the coming months is likely to push gas and electricity prices higher for Europe’s consumers. In this study, Cedric examines different scenarios for Europe’s winter gas demand to gauge how severe the shock could get.
What Would It Take For Another Euro Crisis?
The widening of French sovereign bond spreads has revived fears about another euro crisis, but today's eurozone is far better equipped to contain financial contagion than it was in 2012. The ECB's expanded financial backstops, greater European integration and the moderation of Euroskeptic parties all help explain why markets are treating France's difficulties as a national credit problem rather than a threat to the monetary union, says Cedric.
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
