Most recent
Gavekal Research
Geoeconomic Monitor: Dialogue And Discord
Tom Miller, Cedric Gemehl, Tom Holland
29 May 2026
Markets continue to gyrate around the daily war headlines. We will not get excited until we see traffic flowing through the Strait of Hormuz and an end to the oil shock. Farther east, Tom Miller finds signs that US president Donald Trump is no longer committed to moving fast and breaking things. The next hotspot for a trade war with China could be Europe, warns Cedric Gemehl. And Russia’s economy may be faltering but is not on its last legs, says Tom Holland.
Gavekal Research
Shifting Conclusions From The Crises Of The Past 30 Years
Louis-Vincent Gave
29 May 2026
Successive economic crises over the past 30 years saw markets draw the same conclusion: excess savings should be relentlessly recycled into US treasuries. That changed after Russia's invasion of Ukraine and western countries' seizure of Russian assets, which led to a preference for gold. Louis asks what lesson markets will learn from today's crisis in the Strait of Hormuz.
Gavekal Dragonomics
Dialing Back Expectations For Appreciation
Wei He
29 May 2026
After a brief pause during the opening phase of the Iran war, the renminbi has resumed its appreciation and is now the strongest against the US dollar it has been since 2023. But financial institutions have pared back their expectations for further appreciation in response to central-bank signals. Wei argues that the base case should indeed be that renminbi appreciation starts to cool off from here.
Gavekal Research
Video: Will Warsh Spook The Bond Market?
Will Denyer
28 May 2026
Global bond investors have plenty of concerns to keep them awake at night, including the likely actions of a new Federal Reserve chair. While most attention has focused on Kevin Warsh's inflation-fighting credentials, Will outlines a series of potential changes to the Fed's core operations that could have far-reaching implications.
Gavekal Dragonomics
Consumer Defaults Are Climbing
Xiaoxi Zhang
The Invisible Barriers To Migration
Ernan Cui
The Reversal For Migrant Workers
Ernan Cui
An Uneasy US-China Understanding
Arthur Kroeber
The Oil Shock Arrives
Wei He, Dragonomics Team
Gavekal Research
China’s Youth Unemployment Issue
Louis-Vincent Gave
Beyond The Sorry Case Of European Equities
Cedric Gemehl, August Gudmundsson
Warsh’s Balance Sheet
Will Denyer
Mrs. Watanabe And Her Investment Committee
Charles Gave
South Korea’s Shipbuilding Hedge
Tan Kai Xian
Gavekal Technologies
Introducing Huawei’s ‘Tau (τ) Scaling Law’
Laila Khawaja
The Battery Design Battle
AJ Cortese
The AI Boom’s Critical Minerals Problems
Laila Khawaja
Webinar: US-China Tech Competition After The Beijing Summit
Arthur Kroeber, Laila Khawaja, AJ Cortese
Constructive Stability, Or Uneasy Stalemate?
Arthur Kroeber, AJ Cortese, Tom Hancock
Gavekal-IS
The 21st Century Does Not Lack Ideas
Didier Darcet
Hard And Soft Sciences On Growth
Didier Darcet
Economic Regime Shift
Didier Darcet
Chinese Impressions
Didier Darcet
Understanding Asset Price Trajectories (Part II)
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 durable goods orders rose 7.9% MoM in Apr, versus 1.3% in Mar
Above expected 4%; core capital goods orders fell -1.1% MoM in Apr, versus 3.9% in Mar
Decline in core goods orders, if sustained, would signal weakening capex outlook
US personal income in nominal terms at 0% MoM in Apr, versus 0.5% in Mar
Below expected 0.4%; spending in nominal terms rose 0.5% MoM in Apr vs 1% in Mar
Steady jobs market and wealth effects propping up spending despite price pressures
Eurozone economic sentiment indicator rose to 93.5 in May, versus 93.2 in Apr
Above expected 93
Subcomponents indicate stagflationary conditions setting in for EZ economy
Japan retail sales in nominal terms rose 2.1% YoY in Apr, versus 1.4% in Mar
Above expected 1.3%
Fiscal interventions distorting signals in growth and inflation data, complicating BoJ outlook
Test Your Knowledge
Following the grounding of Spirit Airlines, their nearly new A320neo aircraft are being dismantled. Why?
- With fuel prices so high, there is less demand for them
- Their petroleum-based lubricants and hydraulic fluids can be repurposed
- Their engines are leased out to other operators due to shortages
Chart of the Week
In an effort to preserve foreign exchange reserves, India has raised import tariffs on gold and silver from 6% to 15%. This may only slightly dampen demand for gold in India, but a reversal of the current account deficit would require a heavy cutback of imports. If Indians stopped buying gold, it would give the Reserve Bank of India more breathing room, reduce inflationary pressure and help strengthen the rupee, but India may also face job losses, an industry slowdown, culture shock and reduced financial security for many families. A much more meaningful option would be a round of foreign capital raising.
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: US-China Tech Competition After The Beijing Summit
Arthur Kroeber, Laila Khawaja, AJ Cortese
20 May 2026
Donald Trump came to Beijing for his summit with Xi Jinping determined to secure a lot of business for American companies. Despite the positive vibes, the US and China are locked in an intense technology competition, with each side working to build up its own tech ecosystem while using export controls and investment restrictions to hold back the other's progress. In the first edition of a monthly webinar series by Gavekal Technologies, semiconductor/AI analyst Laila Khawaja and new energy analyst AJ Cortese join Arthur Kroeber to discuss the risks that lie ahead for tech companies trying to navigate the US-China rivalry.
The Iran War And Fallout
Rose-Tinted Markets
Markets in Asia largely shrugged off the news Tuesday morning that the US military had launched fresh attacks against targets in Southern Iran, preferring Monday’s narrative that Washington and Tehran are on the edge of sealing a preliminary peace deal that will reopen the Strait of Hormuz to international shipping. A deal might be in the offing, but trust is low, the obstacles are formidable and progress is slow.
The Oil Shock Arrives
The general expectation had been that China would weather the shock better than many other economies. The April data instead showed that it is hitting the economy harder than expected. Wei and the Dragonomics Team argue that the economy will continue to absorb
damage as long as oil prices remain high, but policymakers will remain hesitant to introduce meaningful stimulus unless the bad data persists into the coming months.
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.
US economy & markets
Warsh’s Balance Sheet
Investors have two key concerns about the outlook for US monetary policy under Kevin Warsh’s leadership of the Federal Reserve: will his Fed continue to target 2% inflation, and will the institution’s balance sheet be cleansed? Will tackled the first question in a separate paper. In this report, he focuses on potential changes to the Fed’s balance sheet and their implications for markets.
South Korea’s Shipbuilding Hedge
The AI boom which has powered South Korea’s spectacular equity rally is not the only theme in town. Another is the deepening geopolitical and economic alignment between Seoul and Washington as the US moves to strengthen its national security industrial base. As such, the US Navy may soon outsource part of its warship design and construction to South Korea. If this materializes, Kai Xian says that Korean shipbuilding companies could become major beneficiaries.
The Other US Capex Question
Everyone wants to know whether the AI capital expenditure boom will prove sustainable, and whether it will ever generate the hoped-for returns. But there is another question almost as important: what is happening to capex outside the AI sector, and why?
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?
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: Will Warsh Spook The Bond Market?
Will Denyer
28 May 2026
Global bond investors have plenty of concerns to keep them awake at night, including the likely actions of a new Federal Reserve chair. While most attention has focused on Kevin Warsh's inflation-fighting credentials, Will outlines a series of potential changes to the Fed's core operations that could have far-reaching implications.
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
Beyond The Sorry Case Of European Equities
Investors in European equities must fondly remember 2025 as a rare period when European equities outperformed global equities. That now feels like a long time ago. Cedric and August examine the two factors getting the blame for European underperformance this year and look for catch-up opportunities.
China Plugs Into Europe’s Auto Demand
European car sales are benefiting from a cyclical upswing in demand, and the recent rise in gasoline and diesel prices driven by the Iran war is skewing demand towards hybrid and electric vehicles. For now, demand favors hybrid-electric vehicles, in which established manufacturers have an edge in the European market. But the structural trend is towards battery-electric vehicles, where Chinese brands have the edge. August asks whether European brands can catch up and assesses the economic consequences.
Europe’s New Fiscal Faultlines
European sovereign bond yields have been rising lately. Most of these increases have been driven by market expectations of short-term interest rate increases. Most, but not all. For some, a small part of the rise is attributable to investor concerns over long-term fiscal sustainability. However, Europe’s fiscal faultlines have shifted; the group of countries most severely affected will not be the same as in the debt crisis of the early 2010s.
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.
Currencies
Dialing Back Expectations For Appreciation
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
Oil & commodities
Geoeconomic Monitor: After Beijing
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
