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Pushback by Powell and peers trimmed some excessively dovish pricing, but the BoE converged down on poor data.
The BoE should also resist pressure as underlying issues are unbroken by relatively marginal recent payback.
We now see markets overpricing easing most in the UK. More weakness is needed to signal a threatening trend.

3. BoE: Hawkish Surprise Set For November

Markets have erroneously repriced a BoE rate cut as potentially imminent and repeated. Policymakers are tending to surprise hawkishly in the UK and elsewhere recently.
Downside news on excess inflation is mild, while the activity data have, if anything, exceeded BoE forecasts. Pay growth signals remain strong, not disappointing the BoE.
Six MPC members have favoured slower easing, inconsistent with a November cut. Fiscal consolidation is unlikely to frontload a shock large enough for the MPC to accommodate.

4. BoE: Bailey Leans Over December Fence

Another 5:4 vote split broke the BoE’s run of quarterly rate cuts. Governor Bailey is revealed to be the pivotal member, with the others worried about inflation persistence.
Bailey endorsed market pricing and a forward-looking Taylor Rule path that includes a cut this quarter. His verbal comments imply a presumption in favour of cutting then.
Upside news over the next two monthly release cycles would be needed to block that December cut. Resistance to cutting should only grow stronger as time passes.

5. Rebound To Resilience

The diverging services PMI and ISM resolved bullishly in October, with activity broadly back to 2024 averages. The ISM headline still looks lower because it is a composite.
Price balances remain extremely elevated while employment’s weakness has become less acute, skewing the trade-off more hawkishly for any policymaker’s preferences.
The broader global deterioration in PMIs and unemployment last month also recovered in the latest round of releases. These data are not screaming for any more easing.

6. HONG KONG ALPHA PORTFOLIO: (October 2025)

The Hong Kong Alpha portfolio’s performance was -2.01% in October versus returns of -0.81 for the benchmark and -3.53 to -8.62 for Hong Kong indexes.
The Hong Kong Alpha portfolio has captured most of the market gains and minimized drawdowns since inception. The portfolio’s outperformance is more than 40% since inception in October 2024.
At month-end, we reduced materials and healthcare exposure. We had already reduced the tech exposure earlier in the month. We established positions in the utility, textile, and battery sectors.

7. Making Sense of the Gold Price Retreat

We offer a plausible scenario that explains the recent surge and correction in gold.
The market misinterpreted the “Liberation Day” USD decline as a “Sell America” trade instead of a “Hedge America” trade and panicked out of USD and rushed into gold.
We expect a bottom in gold in Q4 or Q1 as the new Fed Chair pivots monetary policy in a more expansionary manner.

8. HEW: Caution Echoes Outside the BoE

The BoE resisted cavalier calls for a rate cut this week, but it is much less cautious than we expected. A December rate cut is now likely, absent significant upside surprises.
All other central bank announcements this week fit the trend, with cautious holds in Australia, Sweden, Norway, Malaysia and Brazil, and a more careful cut in Mexico.
Next week’s UK labour market (and GDP) data are one of the few things that could clear the evidential hurdle to block a cut, although we doubt good news will extend that far.

9. The Art of the Trade War: HE SAID, XI SAID….. WHAT WAS AGREED?

The meeting in Busan between Presidents Trump and Xi reduced the tension between the two countries, but the detente may only be temporary and confusion on details persist.
Tariffs were immediately reduced and potential future increases delayed by a year. President Trump offered to reduce the fentanyl tariff further to 0% after the meeting.
The most critical issues of export restrictions on chips and Rare Earth Elements were dialed back with recent threatened restrictions delayed by a year.

10. Prepare for the Year-End Rally!

A review of our Trend Asset Allocation Model reveals a broadly based momentum-driven global bull.
The S&P 500 is also entering a period of positive year-end seasonality.
In light of the bullish support provided by the intermediate trend, investors should be positioning for a rally into year-end.

Nov 02

Weekly Top Ten Macro and Cross Asset Strategy – Nov 2, 2025

By pvtIQ Content | Macro and Cross Asset Strategy

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. Is Japan Back?

By Trillions, Trillions

Japan, a country big in ETFs, is discussed in the Trillions podcast with guest Jeremy Schwartz from WisdomTree
DXJ, the WisdomTree Japan Hedged ETF, had a successful run in 2013 but later underperformed, potentially due to currency manipulation and changes in leadership
Despite past fluctuations, Japan never left and DXJ has outperformed the S&P 500 since 2012, highlighting the potential for growth and investment opportunities in Japan

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

2. Credit For Inflation

Credit and monetary holdings are booming in the UK, enabling consumers to spend their devalued pounds, supporting CPI inflation beyond the target.
Falling rates have neutered the refinancing shock, facilitating the affordability of loan demand. Rapid ongoing wage growth further reduces the debt burden.
The ECB also sees bullish monetary trends, but they only took it to a good place. The BoE is not in a good place, with policy accommodating above-target inflation pressures.

3. Ready for the Contrarian Gold Trade?

By Alastair Newton, Heteronomics

We have been bull bulls, but point and figure charts of gold and gold miners show that they are either very near or have outrun their measured price objectives.
Tactically, the contrarian trade would be to sell gold and buy bonds.
However, a cycle analysis leads us to conclude that the market is undergoing a shift to a hard asset price leadership cycle.

4. China/US: Sauce For The Goose…

Donald Trump and Xi Jinping’s 30 October summit will likely stave off, for now, any further escalation of trade tensions between China and the US.
However, thanks to its monopoly on strategic minerals and Xi Jinping’s willingness to play a long game — even beyond ‘mere’ trade — China holds the stronger hand.
Irrespective of whatever Mr Trump concedes this week to secure a ‘headline grabber’, Xi Jinping will therefore come back for more, not least on Taiwan.

5. HEW: Cautious Committees

Central bankers broadly delivered on expectations this week, while cautioning that changes will likely be less than markets assume. The BOJ and ECB were also cautious.
Flash EA inflation slowed, as expected, but services and core stoked hawkish pressure, while money and credit data in the EA and UK show accommodation of inflation.
Next week’s BoE decision is no longer priced as a forgone conclusion, but the case to cut is weak. Like its peers, the BoE should cautiously damp dovish expectations.

6. CHINA HOUSEHOLD CONSUMPTION: Unlocking Growth Potential in Five-Year Plan

China has announced that it will significantly boost the share of domestic consumption in its next five years, while maintaining tech and manufacturing as top priorities.
The nation’s banks will be instrumental in providing consumption financing to spur a virtual growth driver for the economy. Easing monetary policies will be in addition to the trade-in programs.
Consumer in service sectors like e-commerce, travel & tourism, healthcare, elderly care and AI will benefit from increasing consumption. Local brands stand to gain market share against foreign competitors.

7. EM Fixed Income: Reviewing the global & previewing the upcoming idiosyncratic

By At Any Rate, At Any Rate

EM markets trading with strong global beta, lack of US key data due to government shutdown affecting market direction
EM currencies look okay, EM rates may be less favorable, EM credit suffering from tight spreads
Key takeaways from IMF conference in Washington include focus on impact of AI-related investments on global growth and employment, overall mood on growth is flat with risks but no panic or euphoria

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8. Time to Sound the All-Clear?

The U.S. stock market’s technical conditions are turning more constructive.
Market internals such as breadth and risk appetite indicators have stopped deteriorating and they are starting to heal
Risks remain, and we would like to see the resolution of key event risks before sounding the all-clear signal.

9. The Art of the Trade War: U.S. ON THE HAMSTER WHEEL!

By Steven Holden, Copley Fund Research

The much hyped meeting between the presidents of the world’s two largest economies fell short of global expectations. Key issues were only delayed, not resolved.
China has been steadfast in the face of U.S. hardball tactics, resulting in the U.S. reversal of announced measures, like the expansion of the restricted entity list.
The effective tariff rate on Chinese exports to the U.S. will be approximately 30%, which is 20% higher than when President Trump took office.

10. Global Active Funds Struggle to Close the Gap in 2025

Active Global funds averaged +15.5% YTD, trailing the SPDR ACWI ETF’s +18.8%, with 73% underperforming the benchmark.
Value strategies led performance; Aggressive Growth funds lagged sharply, averaging just +10.15%.
Underweights in US Tech names like NVIDIA and Palantir, plus 2.4% cash holdings, drove relative losses.

Oct 12

Weekly Top Ten Macro and Cross Asset Strategy – Oct 12, 2025

By pvtIQ Content | Macro and Cross Asset Strategy

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. From Buyers to Builders: Assessing the U.S. Housing Market

By All The Credit, All The Credit

Market sentiment on rate cutting and its impact on the housing market in 2026 is largely optimistic
Home prices are up two and a half percent through June but have been declining month-over-month
Housing supply at a national level is back to pre-Covid levels, transitioning to a buyer’s market from a seller’s market with strong mortgage credit but affordability challenges due to higher rates

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

2. HEM: Oct-25 Views & Challenges

By Alastair Newton, Heteronomics

Hawkish inflation and policy rate pricing shifts toward our UK/EA view did not stop US rates frontloading more cuts.
We still see markets overpricing easing, with UK inflation expectations stuck above target, and neutral rates high.
A break in activity data, especially unemployment, and underlying price/wage inflation, would threaten our view.

3. US Shutdown: A Means To An End

The Democrats opted for a US government shutdown despite the Administration being well prepared for what it sees as an opportunity to promote its longer-term agenda.
While they hold out, the president’s ‘grim reaper’, OMB Director Russell Vought, will have a free hand to cut the size of government and pursue his unitary executive vision.
Some of his actions will undoubtedly be challenged in the courts, but the signs are that the Supreme Court will continue to side firmly with the Administration.

4. UK: Poor Productivity Paradigms

The OBR looks likely to trim its productivity trend assumption to 1%, which would still be a bullish break from the current stagnation. Trends rarely break outside recessions.
High taxes are squeezing the most productive and being transferred to the inactive. It should not be surprising that the UK’s political choices have stalled productivity.
We see no reason to think the UK will pull off an internationally exceptional jobs-light boom from here. Ongoing stagnation would extend the UK’s rule for fiscal slippage.

5. EM Fixed Income: Is better growth worse for EM?

By At Any Rate, At Any Rate

Recent data has shown better-than-expected growth globally, leading to a shift in the macro landscape.
The US economy has shown signs of weakness, particularly in the labor market, but overall growth forecasts have been revised upwards.
Emerging markets have maintained a positive bias, with inflows steadily coming in, but there are concerns about potential vulnerability in EM currencies and local rates markets if the US growth environment remains strong.

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6. US: Steady As She Shuts

By Nicholas Pezolano, Newmark Risk

The US government shutdown causes vital economic data to go dark, leaving the Fed facing market pressure to blindly cut rates as priced, creating risks of policy error.
Both parties see strategic value in prolonging the shutdown, risking disruption that lasts well beyond historical norms. But levels will rebound when it inevitably ends.
In the interim, private surveys signal weakness, and this picture is unlikely to improve significantly enough to block cuts in 2025, but that won’t drive more Fed cuts in 2026.

7. Beyond The Blue Chips: A Look At SGX’s iEdge Singapore Next 50

SGX iEdge has launched the SGX iEdge Singapore Next 50 indices to track the 50 largest and most liquid SGX Mainboard companies beyond the 30 companies featured in the Straits Times Index (STI).
The Next 50 index has the highest weighting in the Real Estate sector, comprising ~47% of the index by weight. Other meaningful sectors are Financials, Industrials, and Consumer.
By utilizing the new index in conjunction with the Straits Times Index (STI), investors and asset managers can more effectively construct tactical asset allocation strategies that aim to enhance portfolio performance.

8. Turning tides: a new dawn for capital flows

By The Emerging Market Equities Podcast, The Emerging Market Equities Podcast

Shift in capital flows and rise of domestic emerging market investors
Discussion with experts in UAE and Singapore on their experiences and perspectives
Impact of global events like financial crisis and COVID on emerging markets and expat communities

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9. Q4 Outlook for Our Investment Themes Part 2 – Asian Equities

By Rikki Malik

How have our major investment themes performed so far in 2025?
Review of the performance of the major markets and asset classes we focus on
We revisit our outlook for each of those asset classes for Q4 25

10. RARE EARTH ELEMENTS: China Plays Its AI Trump Card!