Most recent
Gavekal Research
The Way Ahead For US Hyperscalers
Tan Kai Xian
28 Aug 2026
The big US tech companies, including Amazon, Meta and Alphabet, have long commanded investors’ attention. Now in an attempt to secure AI dominance, they are investing capital at breakneck pace in the necessary AI chips, data centers and supporting infrastructure. The relative trajectories of their capex and free cash flow will shape their businesses and determine the performance of their share prices. There are four main scenarios to consider.
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.
Gavekal Dragonomics
Will An Aging China Save Less?
Ernan Cui, Yu Wu
28 Aug 2026
China’s household savings rate has stayed stubbornly high over the past decade, despite rapid demographic changes. An aging population was expected to lower China’s household savings rate, especially as a less-thrifty younger generation became a larger share of the total. Ernan and Yu examine why neither of those factors is lowering the savings rate in practice.
Gavekal Research
Video: Trump’s Economic Coercion Escalates
Tom Miller
27 Aug 2026
The Trump administration seems to be entering a new phase of economic coercion, as tariffs, secondary sanctions and tighter trade enforcement increasingly work together. In this video interview, Tom considers the latest tariff moves against Canada and Brazil, the legal status of the broader US tariff regime and the looming crackdown on illegal transshipments through countries integrated into Chinese supply chains. He assesses whether these measures are setting the stage for a renewed escalation of the US-China trade war.
Gavekal Dragonomics
The Renminbi After Bessent’s Interventions
Wei He
The Great Bank Consolidation Begins
Xiaoxi Zhang
The Service Sector Is Back In Favor
Andrew Batson
Growth Slips Again
Wei He, Dragonomics Team
Can Deregulation Drive Services Spending?
Ernan Cui
Gavekal Research
The Good, The Bad And The Ugly For Eurozone Bonds
Cedric Gemehl
Are US Long Bonds A Buy? (Part I)
Will Denyer
Scott Bessent And The Four Quadrants
Louis-Vincent Gave
Falling OATs And A Divided France
Louis-Vincent Gave
Four Charts To Watch
Charles Gave
Gavekal Technologies
Alibaba’s AI Conundrum
Laila Khawaja
China Wind Power’s Global Challenge
AJ Cortese
The Next Stage Of The LLM Race
Laila Khawaja
The Tech Truce Starts To Fray
Arthur Kroeber, Laila Khawaja, AJ Cortese, Tom Hancock
China’s Export Engine Meets Europe’s Carbon Rules
AJ Cortese
Gavekal-IS
The Macroeconomics Of AI: Part II
Didier Darcet
The Macroeconomics Of AI In Simple Terms
Didier Darcet
Currency Momentum Trading
Didier Darcet
The End Of The Risk-Free Asset
Didier Darcet
The Great Confusion Over Economic Quadrants
Didier Darcet
Gavekal Research
Who Is Copying Who? Part IV
Louis-Vincent Gave
27 Jul 2026
The growing push to restrict Chinese AI models could mark a major escalation in US-China tensions—and a watershed for the US economy. Louis argues that a ban would protect US tech giants at the expense of start-ups, consumers and productivity, while accelerating the fragmentation of the global technology system. Over time, the result could be weaker US equities, a softer dollar and higher bond yields, raising the question of whether such a policy would truly serve the public good or merely entrench corporate power.
Checking The Boxes
Our short take on the latest news
Fact
Surprise
Takeaway
US goods trade deficit widened to US$118bn in Jul, from US$101bn in Jun
Deficit wider than expected US$99bn
Despite tariff war, the US trade deficit continues to widen
Eurozone M3 money supply grew 3.4% YoY in Jul, versus 3.3% in Jun
Growth less than expected 3.5%; loans to NFCs up 4.4% YoY; loans to households up 3.1%
Credit strengthening despite tighter conditions, suggesting limited drag from higher rates
Germany's GfK consumer confidence index rose to -26.6 in Sep, from -29.4 in Aug
Higher than expected -29.5
Confidence trending higher as saving intentions ease and income expectations improve
Japan's unemployment rate fell to 2.4% in Jul, from 2.5% in Jun
Lower than 2.5% expected
Falling unemployment and rising inflation strengthen case for BoJ rate hikes
Test Your Knowledge
Of the 50 US states in the US, how many imported more from Canada than from any other country in 2025?
- Seven
- 15
- 23
- 32
Chart of the Week
China’s policymakers are now talking up the need for services, due to a combination of the squeeze on manufacturing sector profits and the boom in artificial intelligence. This is not the first time that policymakers have focused on boosting services, but unlike in the past, China’s services share of GDP is no longer materially lagging other middle-income countries.
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: Regime Change Can Cause Market Madness
Anatole Kaletsky, Tom Holland
3 Jul 2026
Markets continue to behave as if the world has not fundamentally changed, even as inflation, interest rates, geopolitics and global capital flows enter a new regime. Anatole argues that investors are systematically mispricing four major shifts: the long-term outlook for inflation and bond yields, the global growth cycle, the rotation from AI-led growth to cyclical value and the end of US exceptionalism.
The Iran War And Fallout
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.
Geoeconomic Monitor: Dominance And Decline
One upshot of the wars in the Persian Gulf and Ukraine is that the US oil and gas industry is booming. The drawback is that US consumers are paying twice Trump's target price for gasoline. With the midterms approaching, there is a risk the US administration might decide export controls are the only way to square the circle, writes Tom Holland. Meanwhile, Cedric Gemehl looks at how Germany is warming to the idea of protectionist measures to insulate its industries from Chinese competition.
The Energy Risk Remains (Part II)
The energy risk from the conflicts in the Middle East and Ukraine continue to escalate, and away from the limelight, listed pureplay oil refiners (outside of China and its price and export controls) have been having a monster year of their own, with recent gains starting to go parabolic. The obvious risk is that as crack spreads rise, so does the pressure on politicians to do something about the rising price of gasoline and diesel. So how can investors guard their portfolios against such risks?
The Energy Risk Remains (Part I)
Energy stocks, as a GICS sector, have delivered the best total return performance of any US sector over the past five years. Yet, tech stocks now account for almost 40% of the S&P 500’s market capitalization, while energy stocks—with their 3% weight—are close to record lows. So why are energy stocks so unloved, especially in the midst of an oil shock?
US economy & markets
The Way Ahead For US Hyperscalers
The big US tech companies, including Amazon, Meta and Alphabet, have long commanded investors’ attention. Now in an attempt to secure AI dominance, they are investing capital at breakneck pace in the necessary AI chips, data centers and supporting infrastructure. The relative trajectories of their capex and free cash flow will shape their businesses and determine the performance of their share prices. There are four main scenarios to consider.
Are US Long Bonds A Buy? (Part I)
In the first part of his series on US long bonds, Will asks whether the Treasury’s new twist operation could improve the outlook. By buying back long-term debt and potentially shifting issuance toward shorter maturities, the Treasury is creating a more supportive backdrop for long bonds, even as the Federal Reserve moves gradually in the opposite direction. Fed independence remains critical: the Treasury can help suppress long yields, but any perception of “fiscal dominance” that pushes up inflation expectations could quickly undo the gains.
Five Risks To Equity-Led US Growth
The US economy and equity market have become increasingly intertwined, with rising stock prices supporting consumption and capital spending, strengthening economic growth and, in turn, equities. This virtuous cycle has healthy momentum, but when everything is going well, prudent investors search for potential pitfalls. Kai Xian identifies five potential factors that could pose a risk to the equity-led boom.
How Sustainable Is The AI Capex Boom?
The AI capex boom is supporting economic growth, equity markets, and bond yields around the world. If the boom rolls over, it will not only weigh on the profits of companies directly exposed to AI capex spending, such as Nvidia. It would weigh on corporate profits throughout the economy. This means investors need constantly to be on the lookout for threats to the AI boom and signs that capex is rolling over.
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: Trump’s Economic Coercion Escalates
Tom Miller
27 Aug 2026
The Trump administration seems to be entering a new phase of economic coercion, as tariffs, secondary sanctions and tighter trade enforcement increasingly work together. In this video interview, Tom considers the latest tariff moves against Canada and Brazil, the legal status of the broader US tariff regime and the looming crackdown on illegal transshipments through countries integrated into Chinese supply chains. He assesses whether these measures are setting the stage for a renewed escalation of the US-China trade war.
Strategy Chartbook
Gavekal Research
Quarterly Strategy Review: 2Q26
Louis-Vincent Gave
3 Jul 2026
The second quarter was dominated by an extraordinary surge in risk appetite as semiconductor stocks powered one of the largest increases in global equity market capitalization on record, yet beneath the exuberance, markets underwent significant macro shifts. Louis reviews the quarter's defining developments.
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
The Good, The Bad And The Ugly For Eurozone Bonds
Energy prices have picked up since late June, once again pushing inflation expectations higher and leading markets to price in more ECB rate hikes. But broadly, energy prices remain below their March highs. In contrast, eurozone sovereign bond yields are now well above their March high. This suggests that there are other forces beyond energy prices driving up eurozone yields. These forces can be divided into three categories: the good, the bad and the ugly.
Europe’s Public Investment Boom Changes Shape
The end of the EU’s post-Covid investment program at the end of this month will bring a significant shift in Europe’s public investment cycle, but not necessarily the investment cliff that might have been feared. As Brussels-funded civilian spending winds down, investment will rotate toward defense and geographically from Southern and Eastern Europe toward Germany and Northern Europe. August examines how these shifts will reshape Europe’s growth impulse in 2027 and change the beneficiaries of public spending.
The (Better) Case For European Banks
After more than a decade in the wilderness, European bank stocks have now had four good years, outperforming their US counterparts since 2022 in US dollar terms. The question is whether this outperformance can continue. The short answer is yes. European bank stocks are no longer priced at distressed levels, but with the earnings outlooks for European and US banks both solid, there is still room for European valuations to improve compared with the US.
Europe’s Broad Earnings Recovery
Investors who question the sustainability of the AI earnings boom, but who nevertheless want to retain some exposure to the growth of artificial intelligence, may want to look again at European equities. Today, Europe offers a powerful earnings-recovery story, with a significant AI element. But best of all, the continent’s earnings growth is diversified across a broad range of sectors, and therefore stands a good chance of surviving even if the AI boom turns to bust.
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
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
The State Of World Oil Stocks
