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
Central banks in the United States, the Philippines, and India delivered rate cuts amid rising inflation pressures and mixed currency responses.
China’s exports rebounded, Japan’s household spending weakened, and Taiwan recorded exceptional AI driven trade growth.
Diverging economic trajectories highlighted inflation risks, export volatility, and the influence of technology related demand on regional performance.
10. Un-Tethered from reality?
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.
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.
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.
Receive this weekly newsletter keeping 45k+ investors in the loop
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
United States shows deepening slowdown with weak ISM manufacturing, falling employment, and declining private payrolls, signaling rising recession risk.
India and China exhibit relatively constructive economic prospects, contrasting with softness in advanced economies.
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.
Receive this weekly newsletter keeping 45k+ investors in the loop
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.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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.
Receive this weekly newsletter keeping 45k+ investors in the loop
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
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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.
Receive this weekly newsletter keeping 45k+ investors in the loop
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
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
- 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).
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.
