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. HEM: May-26 Views & Challenges
- April’s ceasefire helped unwind some of March’s moves. Economist views decay towards more hawkish pricing.
- The supply shock keeps growing, raising pressure to hike, but a forceful cycle would be more like 2003 than 2022.
- Dovishly biased assumptions at the BoE skew risks and surprises higher, sustaining persistent excess inflation.
2. RBA Hikes Not Decisively Above Neutral
- The RBA’s 25bp hike to 4.35% was broadly expected; upside inflation risks and energy shocks keep a tightening bias in place for 2026.
- New forecasts show inflation above target to mid‑2027 and a higher terminal rate path near 4.7%, raising the bar for any early easing.
- Future moves hinge on energy prices, inflation expectations and demand: data must undershoot forecasts for the RBA to pause, let alone cut.
3. Uneven Fallout of Middle East Conflict on Emerging Markets, but Asia More Vulnerable to Stagflation
- The impact of the US/Israel-Iran conflict has been uneven across emerging markets (EMs), largely determined by the reliance on Middle East-sourced energy.
- The endgame for corporate sectors in EMs will depend on their exposure to Middle East energy supply constraints and higher energy costs, as well as the pricing power of companies.
- Corporations in Malaysia and Thailand face the largest potential corporate credit stress stemming from a prolonged Middle East conflict, while Chilean and Mexican companies lead the way in Latin America.
4. Banxico Cuts to 6.50% as Cycle Ends
- Banxico cut by 25bp to 6.50%, in line with consensus expectations, and signalled the end of the easing cycle with a high‑for‑longer stance.
- Above‑target inflation, upside risks and only gradual convergence to 3% limit scope for further cuts despite weaker growth.
- Future moves hinge on durable disinflation, persistence of slack and Fed policy; markets should focus on the duration of the pause, not new easing.
5. Norges Bank’s Hawkish May Move
- Norges Bank’s earlier‑than‑expected 25bp hike to 4.25% demonstrates a strong anti‑inflation bias and reinforces its restrictive policy stance.
- Future moves hinge on CPI‑ATE, wage growth, NOK and commodity prices; current guidance still allows for another hike later in 2026.
- Downside growth risks argue for caution, but policy will stay tight until durable disinflation reduces concern about de‑anchored expectations.
6. Supply Chain Cold War
- The announcement at the end of April that the UAE (and others) need to access US dollar swap lines has potentially huge implications for the illiquid parts of US$ asset markets.
- If they try and redeem, price discovery could be brutal, but even if they don’t, where is the cornerstone funding going to come from to keep the show on the road?
- The only answer is governments, i.e. taxpayers.
7. Asian Equities: Nascent Revival in FII Flows in April, but a Long Way to Go
- We argued that Asia was oversold in March. In April FIIs bought back a little, US$1.58bn, predominantly in Taiwan (US$7.83bn). They bought US$493m in Korea and sold US$6.47bn in India.
- Our study of last 20 years FII investment shows that the present episode is the largest quantum of FII selling in Asia in a short period.
- The large Asian markets, Korea, Taiwan and India, are all near their troughs in terms of 6-monthly cumulative FII selling as percentage of market cap. India could get sold more.
8. Asian Equities: The Earnings Juggernaut Is Rolling on and Getting Broad-Based
- Asian earnings estimates are being revised up stupendously. Over past 6 months, 2026 consensus EPS is up 16%. 63 market-sectors out of 159 saw upgrades, vs 30 few months ago.
- While the main drivers are Korean and Taiwanese tech, the spill-over from tech into consumption sentiment and investment propensity are visible. Korean retail, financials, Taiwanese financials have had significant upgrades.
- The pedestrian upgrade to China’s EPS and the downgrade to Hong Kong’s are surprising. Our preferences remain on Korean tech, industrials, defense, financials, Taiwanese tech, Chinese basic materials, HK financials.
9. HEW: Trump’s Salsa Turns Policy Tighter
- Trump is leading a salsa dance for security in the Middle East as the conflict steps back and forth, with central bankers forced to dance along to the accumulating shock.
- The Norges Bank surprised with an early hike, while the RBA delivered another hike, and Banxico brought its cutting cycle to an end. Payrolls beat again, offset by the details.
- Next week’s releases include US inflation, Euro area GDP and employment, plus what is set to be another spurious Q1 surge in UK GDP amid residual seasonality.
10. Riksbank Holds, Risks Skew Up
- The Riksbank holds at 1.75% as expected, in a data‑dependent pause with a mild hawkish bias given rising energy‑driven inflation risks.
- Weaker‑than‑forecast growth and sub‑target core inflation argue against near‑term hikes, but limit any case for easing.
- Future moves hinge on war‑related energy shocks, global policy rates and the krona’s role in imported inflation.
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. EM Fixed Income: Will EM markets keep trading Iran conflict de-escalation?
- Discussion on implications of potential ceasefire on different parts of EM asset class
- Relief rally seen in EM currencies, credit, and local rates following announcement of two-week ceasefire
- Potential for negotiated off ramp and lower risk of recession for global economy if ceasefire holds
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2. UK Burns Bridges to FDI
- The UK’s defence of its Gulf allies was weak (i.e. only 4 Typhoons in Qatar) and failed in Cyprus, where EU states did more and quicker, devaluing UK security guarantees.
- Without reliable ballistic missile defences or a functioning nuclear deterrent, the UK relies more on the US, yet Starmer punishes allies and energy bill payers to snub Trump.
- FDI from the Gulf (e.g. Qatar £40bn+) should partially unwind, just as the UK’s security promises did, feeding a structural underperformance of UK assets, including Sterling.
3. UK Q1 Residual Seasonality Returns
- Resurgent GDP in February, after an upwardly revised January, doubles tracking estimates of Q1 growth to 0.6% q-o-q. But this is merely a return of residual seasonality.
- We still expect growth to be heavily frontloaded into Q1 with stagnation through H2, but the initial real income squeeze is likely to stall Q2 more than usual.
- The biased BoE responds asymmetrically. It will likely discount Q1 as spurious rather than hike, yet still see subsequent weakness as a cause for caution, keeping it on hold.
4. HEW: Rallying into the Void
- No news was good enough news for risk assets to keep rallying, but even a benign end to the US-Iran war will not negate the inflation shock lifting policy rates.
- EA inflation recovered some of its downside surprise in its final March print, but the UK’s international stature can’t recover. It failed to defend its investing allies.
- Next week is packed with news for the UK, where the rise in its inflation data is our highlight, with its labour market and global flash PMIs other notable releases.
5. FOOD FOR THOUGHT: Commodity War Scars and Coming Inflation
- Agricultural commodity prices have been tame so far, but rising fertilizer, energy, and transportation costs portend coming inflation. Farming margins are getting squeezed as costs rise and grain prices stagnate.
- Closure of the Strait of Hormuz has led to a surge in fertilizer prices, heating oil, and diesel, all of which will eventually bleed into food price inflation.
- Europe and Asia have maintained ample grain inventories, which have kept prices low since the war began; these are only temporary buffers.
6. EA: HICP and Politicians Energised
- EA inflation was revised up by 3bps, rounding to 2.6% and partly reversing the downside flash surprise. Surging auto fuel drives inflation, with broader pressures still to transmit.
- Politicians are attempting to moderate the shock, with a current focus on auto fuel, usually with tax cuts. Some energy utility measures are taken, but more will follow.
- Underlying pressures were more benign than the headline surge, depriving the ECB of evidence to support a rate hike yet. We still expect that to come in June instead.
7. BUY/SELL/HOLD: Hong Kong Market Update (4/14/26)
- The Hong Kong market joined other Asian markets during the post-war sell-off. The HSI easily held its long-term support levels, and the overall market breadth remains above 60.
- The materials sector has lost momentum as the energy sector emerged as the standout winner in the first quarter of 2026. Value and dividend yield factors continue to outperform.
- Xinjiang Goldwind Science & Technology (2208 HK) has been upgraded by JP Morgan, along with a target price rise from DBS. The company is experiencing a surge in international orders.
8. 257: Beyond The Magnificent Seven: Discovering Equity Opportunities in The S&P 493
- Historic concentration in the S&P 500 due to the dominance of tech and AI adjacent companies
- Top 10 stocks currently make up 40% of the index, the most concentrated period in history
- Opportunity to look beyond the “Magnificent Seven” and consider underexposed, innovative companies in the index
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
9. Asia Economics: Damage from Iran Crisis Now Baked In
- The failure of the first round of US-Iran negotiations reflects the substantial difficulties that lie in the way of bridging the structural gap between the two sides.
- Even if further talks eventually produce a settlement, energy prices will not revert to pre-crisis levels given the damage to oil production. Risk premiums will also remain elevated as well.
- Asian economies face a double hit: domestic demand destruction through higher energy costs triggering public and private austerity, compounded by a looming trade slowdown.
10. Asian Equities: Higher Earnings Estimates, Lower Stock Prices – Nine Notable Sectors
- The resilience of Asian earnings is surprising. Consensus 2026 EPS estimate of Asia-ex-Japan (Factset Market Index) is up 3% over the past month and 10% over the past 3 months.
- 29 market-sectors have had robust upgrades over 1-month, 3-month and 6-month timeframes. Energy and basic materials and the prominent AI beneficiaries, Korean and Taiwanese tech, figure prominently among earnings gainers.
- Among the earnings winners, nine sectors have declined significantly since the beginning of the war. The HK/Chinese, Korean and Indonesian basic materials and Korean financials and Thai communications stand out.
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. HEM: Apr-26 Views & Challenges
- War with Iran has upended market pricing. An end should provide relief, but downside risks darken benign hopes.
- Damaged energy infrastructure would warrant hikes to partly reverse past easing, like in 2003, not 2022.
- The BoE suffers a dovish bias in its assumptions that lead it to over-inflate, which remains likely for any outlook.
2. EA: Soft Goods Ease Hawkish Pressure
- EA inflation jumped to 2.52% in March, far above earlier expectations, but below the latest views. Soft goods prices caused the downside news here and in the 2.26% core.
- Services inflation is sticky at 3.23%, 22bp less than a year ago. Further energy price rises are set to drive the headline rate above 3% over the next two months.
- Downside news to the ECB’s forecast eases hawkish pressure in the short term, raising the likelihood of no change in April. We still expect it to hike rates in June.
3. Asian Equities: Getting into Oversold Territory, After Heaviest Ever Monthly FII Selling in March
- In March till date, FIIs have sold an enormous US$58.6bn of Asian equities – the highest ever monthly sale – US$26bn in Taiwan, US$20.25bn in Korea and US$12.3bn in India.
- On 6-monthly cumulative buying/selling as proportion of market cap, Asia is near its “most-sold” level. The ongoing Middle-East conflict could drive more selling, but Asia is rapidly entering oversold territory.
- Korea is oversold, Taiwan is nearly there and India is not quite in oversold territory. ASEAN markets are far from oversold, implying that they could see lot more FII selling.
4. Asia’s Growth Risks Are Compounding
- The Middle East war is tightening energy supplies, worsening terms of trade, and narrowing the policy space to cushion the blow simultaneously.
- In the short-term, the downside risks are highest for the Philippines, Vietnam, India and Thailand.
- A prolonged supply interruption extending beyond four to five months will likely amplify recessions risks for Singapore, Thailand, S Korea, Japan and Taiwan.
5. South Korea’s National Assembly Ready to Finally Approve the Cornerstone System for IPOs
- On 2 April, South Korea’s National Assembly Political Affairs Committee held a Bill Review Subcommittee meeting and passed the amendment to the Capital Markets Act for the cornerstone system introduction.
- The main purpose of the cornerstone system is encourage institutional investors to pledge to hold the shares for at least six months after listing.
- The Korean National Assembly is likely to finally pass the allowance of the cornerstone system for IPOs in Korea.
6. Donald-In-Wonderland: SEPARATING NOISE FROM SIGNAL
- Sorting out the noise from true market signals is challenging in the current environment, with conflicting media accounts on the war in Iran.
- Peace negotiations and daily oil price fluctuations are noise, while Hormuz crossings, treasury yields, long-term oil prices, and stock market technical indicators are investment signals.
- Global markets remain hopeful of a quick resolution to the war and return to normal oil and gas shipments from the Gulf; however, investment signals are diverging from that view.
7. Asian Alpha Hedge Portfolio (March, 2026)
- The Asian Alpha Hedge Portfolio performance in 1Q26 was +17.83% versus its benchmark performance of +1.79% for an outperformance of 16.04%.
- Over the last year, AAHP’s Sharpe ratio is 4.39 with a mean excess annualized return of 69%. The portfolio has a gross and net exposure of 132% and +30%, respectively.
- The war has changed outlooks for economies and markets in the region. Accordingly, we reduced risk in the portfolio and adjusted our long/short exposures to reflect this new reality.
8. OIL: When a Short-Term Spike Becomes Long-Term Reality
- So far, global markets remain optimistic that the damage from the war in Iran will be repaired relatively soon; however, that will change as the war enters its second month.
- Asian countries are highly dependent on oil and gas shipments from the Middle East, with airlines, petrochemical companies, and gas distribution companies all negatively affected.
- Iran now controls when the flow of energy from the Middle East starts and thereby when the war stops. Gulf countries will not allow Iran to be the Straits gatekeeper.
9. HONG KONG ALPHA PORTFOLIO: (March 2026)
- The Hong Kong Alpha portfolio’s March performance was -11.25%, compared with -7.75% for the benchmark index. The Hang Seng Index lost 6.92% for the month.
- Performance was hurt by its exposure to the oil equipment and fertilizer sectors, which normally benefit from higher energy prices. China imposed price and export restrictions in the energy sector.
- At the end of March, we positioned the portfolio to better cope with the difficulties in China’s economy and in the global market due to persistently high energy prices.
10. Some Final Words on the Market Outlook
- Our base-case intermediate outlook for equities is bullish, based on our base-case scenario of an orderly wind-up of the war.
- Focus on a barbell portfolio of U.S. large-cap growth and non-U.S. value for equity portfolios, and make a greater allocation to commodities in the normal bond part of the portfolio.
- The key risk is that the Gulf conflict spirals out of control and raises the risk of a global recession.
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. HEW: BoE Goes Its Own Way
- The BoE refused to behave like its peers this week, with a significant dovish shift in the vote despite a lack of news, even as others settle on holding steady or even hiking.
- Those doves overshadowed the ECB’s calm stability after inflation matched forecasts by dipping to 1.7% in January. Disappointing US labour market news drove rates down.
- Next week’s slightly delayed payrolls (and CPI) releases will help reveal the relevance of this week’s noisy signals. We also await UK GDP data turning in residual seasonality.
2. BoE: Presumptive Doves Fly
- The MPC held rates in a shockingly finely balanced 5:4 vote again. Assumptions in the analytical boxes were uniformly dovish and widely cited as driving the dovish flight.
- We see target-consistent wage growth lower, only partly because of productivity. Fiscal policy will not match tight plans, and elevated expectations can’t be assumed away.
- Only one of the two members open to cutting soon is needed to deliver it. We no longer see enough time for dovish assumptions to be disproved, making a late April cut likely.
3. Fed: Rate Cuts Rolling Away
- Pricing for Fed rate cuts in 2026 has been trimmed by ongoing economic resilience and a fairly uncontroversial appointment of Kevin Warsh as the Fed’s next Chair.
- Mean pricing still covers two cuts, close to the BoE, despite both being on hold and some other central banks turning hawkish. Delaying cuts until mid-year isn’t enough.
- We see excess demand and inflation surviving, preventing policy easing. Trump’s Chair can sell this stability. Temporal decay of the dovish skew would also roll rate cuts away.
4. HONG KONG ALPHA PORTFOLIO: (January 2026)
- Hong Kong Alpha portfolio gained 16.26% in January resulting in a 6.2% outperformance to its benchmark. The portfolio has outperformed HK indexes by 48% to 63% since inception on 10/1/24.
- Hong Kong Alpha has generated 50% of its return from alpha and has a Sharpe ratio of 1.79 since inception. The portfolio’s annualized mean excess return is 28%.
- At the end of January, we reduced positions in the materials, communications, and conglomerate sectors and added positions in the food, energy, and manufacturing sectors.
5. HEM: Feb-26 Views & Challenges
- Policymakers have broadly signalled caution against cutting too far, feeding pricing for prolonged pauses.
- Resilient output, expanding credit, and the UK’s unbroken excess inflation problem should prevent further cuts.
- Risks from rising unemployment eased with stabilisation after a bad round of releases during December.
6. Korea ETF Market Monthly: #1 (January 2026)
- We introduce a new monthly publication called Korea ETF Market Monthly.There are 1,068 different ETFs to choose from in Korea.
- The top 100 ETFs in Korea totaled 69% of the total ETF market size amount as of 30 January 2026.
- Korean ETF market surged in the past two years. ETFs in Korea had total market cap of 346.5 trillion won (end of January 2026), up 179% in two years.
7. What Does Silver’s Volatility Mean for Markets?
- Silver has gone parabolic, and even the silver/gold ratio has surged. We can find no satisfactory fundamental reasons beyond rising excessive bullish precious sentiment.
- It’s impossible to try to time the blow-off top in precious metals but a reversal may have begun last Friday.
- Even though gold and silver prices are highly extended, the secular trend of a hard asset leadership cycle is intact, and any weakness is a pullback in an uptrend.
8. CHARTING COURSE: Gold, BITCOIN, and the Dollar (January 2026)
- Gold’s long-term upward price trend is still intact. The underlying fundamentals have not changed as the metal’s price corrects and consolidates in its secular bull market.
- Bitcoin is breaking down and investors seem to be losing interest as the cryptocurrency has not acted as a hedge to dollar weakness nor as a safe-haven.
- The U.S. wants a weaker dollar, but not too fast! The dollar’s long-term trend indicates further weakness in 2026 with a DXY target at 5% below its current level.
9. Hanwha Asset Mgmt Launching the PLUS Korea Manufacturing Core Alliance Index ETF (KMCA) On NYSE
- Hanwha Asset Management has launched the process of listing the PLUS Korea Manufacturing Core Alliance (KMCA) Index ETF on the NYSE in 1H 2026.
- KMCA ETF will includes companies in six core sectors: 1) AI semiconductors, 2) batteries, 3) shipbuilding, 4), defense, 5) power grids and nuclear energy, and 6) robots and humanoids.
- This is likely to attract additional foreign capital into Korean stocks in the coming months.
10. Union Budget 2026- What We like and What We Don’t
- The Union Budget 2026-27 is a steady budget with silent fireworks. In our view, the Budget lays a good foundation for growth, while keeping the fiscal consolidation in check.
- Key positives are change in reforms to attract foreign capital in the country, especially given the recent outflows. Tax reforms on IT/Services and emphasis on manufacturing is also a positive.
- What we do not like is increase in transaction costs for HFTs and Arbitrageurs, thereby reducing market efficiency. Limits in MAT set off is another disadvantage to the corporates.
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. Monetary Policy Tide Is Turning Up
- Markets are already pricing the return of rate hikes in 2026 for Canada, Australia and New Zealand, while policymakers elsewhere are starting to warn of the possibility.
- Transitional support to structural adjustments needs unwinding, as Canada signals most prominently. Broader activity resilience and inflation reveal the risk of overstimulation.
- The BoE already committed a policy mistake by easing too early, and is split by those recognising the persistent danger. Market pricing remains too dovish for 2026.
2. 2026 Politics: Nine Guesses & A Certainty
- In what promises to be another year fraught with uncertainty, politics and markets will again be dominated by the United States in general and Donald Trump in particular.
- Widely differing views of equity market prospects demonstrate this, i.e. the ‘bubble is about to burst’ doomsayers versus the bullish seeming consensus on Wall Street.
- However, the biggest challenge facing investors is focusing on what really matters amid the continuing ‘noise’ emanating from the Trump Administration in particular.
3. China Re-rooting Rather Than Dumping
- China’s rising export growth to Europe in November demonstrates base effects around a steady trend that predates US tariff increases. It isn’t about dumping.
- Avoidance measures remain rife, with transhipping through Vietnam not dented by the provisions in their US trade deal. Effective tariff rates aren’t rising belatedly.
- Profit-maximising companies still seem to be working around US measures, keeping the impact on inflation and growth smaller than many other economists feared.
4. HEW: Packing Festive Presents
- Another hawkish repricing occurred, despite little support from the Fed, although the six members favouring higher rates reveal hawkish discomfort beyond current voters.
- Trade with China is still avoiding the trade war well enough to prevent a massive shock, and UK GDP data kept following its residual seasonality rather than fundamental stories.
- It’s all happening next week as central banks and statistical authorities ram releases in before Christmas. Bailey’s bias to pivot should deliver a BoE cut while the ECB holds.
5. The Art of the Trade War: MUTUALLY ASSURED DISRUPTION
- The U.S. Administration has retreated from the heated rhetoric and trade initiatives at the beginning of its trade war. U.S. officials’ conciliatory approach to China starkly contrasts to earlier policies.
- Going into next year’s midterm elections, the Trump Administration will seek to maintain stable markets and downplay its global trade war, benefiting China.
- Taiwan will continue to present headline risks for markets as the influential neocons use the issue to stoke tensions toward a cold war against China.
6. Asian Equities: Valuation Leaderboard Reshuffle Driven by Market Reforms and Earnings Boost.
- Asia’s forward PE and P/BV peaked in late October and are moderating now. Korea, Taiwan, China rerated the most. But viewed against ROE, Korea looks cheaper than 6 months ago.
- Going by PE viewed against forward EPS growth and P/BV against forward ROE, the well-known conclusion – Korea cheap, India expensive – remains unaltered. Onshore China appears slightly overvalued now.
- Persistent initiatives to improve corporate governance are boosting Korea’s and Taiwan’s valuation. Upward revisions in earnings estimates are getting broad-based, indicating the commencement of improving earnings momentum.
7. US: Inflation Is Dead, Long Live Inflation!
- Without warning, the Fed announced it is restarting a substantial QE program under the pseudonym “Liquidity Management”. Starting immediately, it will purchase $40 billion in Treasuries per month.
- The Fed is using its concept of “ample reserves” to begin its monetary easing policy. Initiated following the 2008 GFC, the ample reserves monetary policy was formally adopted in 2019.
- This new QE program will increase already rising global inflation. Commodity prices are reflecting the anticipated higher inflation rates as the pace of declines in real rates is increasing.
8. A Healing Bull
- While the charts are signaling bull-bear indecision on the surface, technical signals favour a short-term bullish resolution for a rally into year-end and beyond.
- However, the Fed rate decision could be the source of market volatility next week.
- This is consistent with the seasonality pattern of a choppy first half of December, followed by a rally into year-end starting in mid-December.
9. Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments -12 Dec 2025
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Central banks in the United States, the Philippines, and India delivered rate cuts amid rising inflation pressures and mixed currency responses.
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China’s exports rebounded, Japan’s household spending weakened, and Taiwan recorded exceptional AI driven trade growth.
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Diverging economic trajectories highlighted inflation risks, export volatility, and the influence of technology related demand on regional performance.
10. Un-Tethered from reality?
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The ‘year-end’ book squaring ahead of Thanksgiving caused a mid-month wobble around the November options expiry, which in turn caused some panic among leveraged traders, albeit not of the April variety.
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The FOMO trades of unprofitable tech and everything Crypto related were hit particularly hard and while the $ briefly moved back above 100 on the trade weighted index, the pain trade at the broader market level appeared to have gone by end month.
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A Rip Van Winkle analysis of November would have concluded that nothing much happened, but a lot did.
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. HEM: Dec-25 Views & Challenges
- Volatile markets and policy guidance washed out, with pricing and forecasts little changed on the month.
- Bailey is biased to ease, but the BoE is awakening to its inflation problem. It should cut less than dovishly priced.
- Higher unemployment could move beyond a structural shift from policy to signal a less elevated neutral rate.
2. BoE Survey Says Stagflation Survives
- CFOs keep telling the BoE their prices will rise by 3.5% in 2026, with wage increases similarly substantial. There has been no significant break lower in over 18 months.
- Employment plans have also deteriorated, lending some support to the dovish case as well. But this side is an unreliable signal, while inflation has proved brutally accurate.
- Doves need the employment aspect to be true, but the transmission to prices not to be. This survey signals upside inflation risks that should discourage rate cuts in 2026.
3. HONG KONG ALPHA PORTFOLIO: (November 2025)
- The Hong Kong Alpha portfolio returned -2.89% in November versus +1.72% for its benchmark index. The HK Alpha portfolio has outperformed Hong Kong indexes by 33% to 45% since inception.
- The portfolio continues to generate 57% of its returns from alpha (idiosyncratic returns) while maintaining a Sharpe ratio of 2.19 YTD.
- We have sold positions in the materials and industrials sectors and added positions in telecom, gold, and insurance industries at the end of November.
4. HEW: Easing Before The Festive Storm
- The BoE FPC cut capital requirements in a surprise macroprudential easing that adds to the less-tight fiscal policy to lessen the need for BoE rate cuts, but one is coming.
- UK CFOs reveal no progress in breaking excessive inflation expectations for 18 months, EA inflation surprisingly rose, and the worst PMIs improved as resilience broadened.
- Another Fed cut is firmly priced, setting it up to be delivered, but members are likely to dissent against it and remain cautious in only forecasting one more cut in 2026.
5. Activity Thaws Into Winter
- The worst services PMIs thawed in November, broadening growth even as averages held steady. Activity in the US services ISM has trended up to exceed the PMI data now.
- A slight fading of stagflationary pressures in the latest US surveys probably balances out in the Fed’s policy trade-off. We still fear that it is easing excessively.
- Rising unemployment rates in the US and UK are concerns not experienced in most of the world. This theme feeds their recent divergence from the global surprise tendency.
6. Likely Increase In Mandatory Tender Offer from the Current 50% + 1 Share Requirement
- Korean government is likely to increase the mandatory tender offer from current 50% + 1 share requirement (minimum majority stake) to much higher levels (but below the maximum 100% requirement).
- There is an increasing probability that indeed the Korean government is likely to increase the minimum majority stake requirement to 60% to 75% of total shares in 1H26.
- If the minimum maximum stake rises to 60%-75% of outstanding shares, this would have a further beneficial impact on the minority shareholders.
7. Asian Equities: Southbound Zeal Dips; Some Established Themes Looking Tired, Others Rejuvenated.
- From the superlative September (US$24.2 bn net buy), onshore investors’ net Southbound buying dipped in October (US$11.9 bn) and November (US$15.7 bn). Xiaomi, Alibaba, PopMart and Meituan were bought most.
- The most sold stocks during October-November were SMIC, Hua Hong Semi, Innovent Biologics. Enthusiasm for semiconductor and biotech seems to be cooling off, though we believe biotech focus should revive.
- Investors’ sustained preference is for stocks catering to domestic consumption that are able to adopt AI to improve productivity and expand their cash-generating businesses. Internet platforms fall in this silo.
8. Late-Cycle Tension: Rising Volatility Signals a Critical Market Inflection into 2026
- US equities triggered key reversal signals as market breadth deteriorated, crowded AI leaders unwound, and indexes broke trend support, elevating near-term downside risk.
- Macro uncertainty, tighter liquidity, and shifting investor psychology are pressuring high-liquidity growth assets, while gold and quality balance-sheet exposures provide relative resilience.
- Multiple late-cycle timing models align into early 2026, raising the probability of episodic volatility and making disciplined positioning, selective risk-taking, and tactical hedging essential.
9. Asian Equities: Stupendous FII Selling in November; Long-Term Study Foreshadows Structural Recovery.
- In November, FIIs sold a stupendous US$22 bn Asian equities, the second highest in the past 6 years. Bulk of it was in Korea (US$9.7 bn) and Taiwan (US$12 bn).
- Concerns about sustainability of AI capex and doubts about Fed rate trajectory were the key drivers of FIIs’ worries. The latter also depressed the Asian currencies.
- Study of last 6 years cumulative buying/selling reveals massive selling in Taiwan/Korea. Flows in these markets should recover the most as FIIs play catch-up. India is a more difficult call.
10. Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 5 Dec 2025
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United States shows deepening slowdown with weak ISM manufacturing, falling employment, and declining private payrolls, signaling rising recession risk.
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India and China exhibit relatively constructive economic prospects, contrasting with softness in advanced economies.
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Asian indicators are mixed, with Indonesia struggling on trade and Hong Kong retail sales recovering gradually but remaining below pre-COVID levels.
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. Agentic Finance: Building AI Analysts for the Debasement Trade Era — with Vlad Stanev of Quantly
- CEO of Quantly discusses market updates, geopolitical landscape, and trends in safe havens
- Focus on innovation and tech, AI, and bitcoin in the digital market
- Analysis of one year trends in safe havens, bitcoin, gold, and the impact of tariffs on the market.
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2. HEM: Nov-25 Views & Challenges
- 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.
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?
- 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
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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?
- 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
- 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!
- 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.
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
- 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
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2. HEM: Oct-25 Views & Challenges
- 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?
- 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
- 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).
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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
- 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
- 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!
- China has implemented extensive restrictions on its export of Rare Earth Elements, which will affect critical parts of the AI supply chain including semiconductor equipment and chips, and data centers.
- The restrictions were in response to recent actions by the U.S. to broaden restrictions on semiconductor equipment exports to China and Secretary Bessent’s comments regarding Argentina’s future relationship with China.
- President Trump responded with a social media post threatening a 100% increase in tariffs on Chinese imports and export controls on critical software.
