Videos

The sharp rise this year in European energy prices has been widely attributed to Russia, which has declined to increase near-term supplies of natural gas to Europe in line with the region’s demand growth. Nick examines the incentives guiding Moscow’s decisions and explores the potential impact of Russia’s choices on Western Europe’s inflation and growth outlook.

The US recorded continued strong retail sales growth in October. But more forward-looking surveys are showing a deep deterioration in consumer sentiment as gasoline prices have risen to seven-year highs, acting as an effective tax on households’ discretionary spending power. In this video interview, KX weighs these conflicting forces to assess the outlook for US consumer demand in 2022.

In the US expectations are growing that labor shortages will drive accelerating pay rises, exacerbating inflationary pressures. In the eurozone, as Nick explains, the situation is different. Although anecdotes abound about employers struggling to staff up, these are a temporary wrinkle caused by rapid reopening in narrow sectors.

India posted a blazing 20% year-on-year growth figure in the calendar year’s second quarter. The country seems to have ducked a third Covid wave and equity investors remain ebullient. In this video interview, Udith explores a number of gathering problems for the Indian economy but concedes that the good times could easily keep on rolling.

Hong Kong is sticking to its zero-Covid policies, complete with a travel ban on outsiders and Draconian quarantine rules for returning residents, even as Singapore tentatively reopens to international arrivals. In this video interview, Vincent explains what is driving Hong Kong’s uncompromising stance on Covid. He assesses whether it will damage the city’s standing as a regional financial center, and whether doubts over the status of China Evergrande’s offshore bonds will undermine the credibility of Hong Kong’s markets.

After the resignation of two regional Federal Reserve branch presidents over potential conflicts of interest, the knives are out in Washington for Jay Powell. In this video interview, Will assesses what personnel changes at the Fed may mean for the trajectory of US monetary policy and for the Fed’s role as US banking supervisor.

As if a tight labor market, rising inflation and widespread fuel shortages weren’t enough to contend with, the United Kingdom is also seeing a sharp deterioration in its relations with the European Union, and France especially. Nick examines what worsening cross-Channel relations could mean for the economies of the UK and EU.

A material difference has opened up in both the actions and signaling of global central banks, as they exit from pandemic-era monetary policy settings. On the hawkish side is the likes of the Federal Reserve and on the dovish side the European Central Bank and a raft of Asian policymakers. The question is who could be on the verge of making a policy mistake.

Asian economies are often lumped into the collective bucket of following “zero-Covid” elimination strategies. That has certainly been the case in most of the region’s big economies. However, there is increasingly an impetus by the better-vaccinated countries to fully reopen. Vincent surveys the landscape and draws some conclusions regarding preferred currency plays.

As investors have flipped between euphoria and dejection over the future of crypto-currencies and related digital assets, prices have had a crazy ride. In this video Will outlines a framework for thinking about valuations. Even if digital art sold as NFTs sticks around, the basic economics of their use case means they probably won't be great stores of value.

European markets were ebullient earlier this week on news that an effective Covid-19 vaccine may be approved for use early next year. In the meantime, regional lockdowns aimed at curbing the escalating pandemic threatens Europe's economic recovery. This all but guarantees loose monetary and fiscal policy for the foreseeable future. In yesterday's webinar Nick and Cedric discussed how this shakes out for investors.

Having gone into lockdown first, China was also the first economy to emerge, and has since enjoyed a rapid rebound in industrial production and exports, reflected in financial markets. But now that the economy is back to “normal”, policymakers have returned to a conservative stance which focuses on financial stability.

Charles Gave, Louis-Vincent Gave, Didier Darcet and Cedric Gemehl delved into the results of the US election, and discussed the latest impact of Covid-19 on the global economy and markets. Additionally, they presented Gavekal’s latest research on portfolio construction.

With the US election outcome likely subject to a period of litigation and some uncertainty, yesterday Gavekal partners and US analysts convened to discuss the possible scenarios lying ahead and what they're likely to mean for asset markets.

The world is focused on the US election, with concerns over a disputed result. Our US team of analysts are less worried about process than the substantive impact of big changes in domestic economic policy settings. Will, Yanmei and KX assessed the likely fallout from November 3 and assess the latest US economic data with a focus on threats to the US recovery should the pandemic worsen and near-term fiscal responses remain uncertain.

China’s financial technology industry has been chaotic for two decades, with Ant Group launching pioneering new products while regulators and competitors play catch-up. With Ant Group ready for its IPO, the push-and-pull between the firm and regulators is grabbing institutional investors’ attention. Matthew Forney and Laila Khawaja of Gavekal Fathom China addressed this tension and also the broader impact of regulation on the country's fintech industry.

Emerging markets have had very different pandemic experiences and the effects are showing up in economic data and market performance. Northeast Asian economies offer strong growth opportunities while southeast Asia is muddling through in a way that favors bond investors. The good news in Asia is that struggling economies such as India and Indonesia are pursuing reform initiatives. The picture is less rosy in Latin America, while Turkey offers the potential for a macro shock to emerge.

The advance of the private sector and the retreat of the state sector has been central to China’s long transformation from an isolated socialist nation to a globally connected economy. Yet the notions of China’s private sector being either in the ascendency, or facing a squeeze in the statist Xi Jinping era are not born out by the facts. Andrew Batson discussed the findings in his recent major piece of research on this topic.

Yanmei Xie discussed the US team’s assessment of risks surrounding the US election, Anatole Kaletsky explained the reasons for his return to bullishness and Louis Gave talked about global asset allocation and how to find “anti-fragile” assets.

Yesterday Cedric Gemehl, Nick Andrews and Anatole Kaletsky joined Tom Holland to discuss what's going on in Europe. Topics ranged from how the economy is fairing in the second wave of the outbreak, what that means for asset prices, and also where Brexit fits into all this.