Macro

• In Depth: ByteDance Riles Smartphone Ecosystem With AI Pitch
• Hong Kong Plans New Virtual Asset Licenses
• PBOC Vows to Optimize Policy Timing While Keeping Loose Stance
• Beijing Boosts Foreign Investment Playbook With High-Tech and Services Push

• Crude oil futures were off modestly after a week-long rally Wednesday while geopolitical events continued to help markets pull away from the mid-December lows.
• Front-month Feb26 ICE Brent  futures were trading at  $62.27/b (1848 GMT) versus Tuesday’s settle of $62.38/b, while Feb26 NYMEX WTI  was at  $58.39/b against a previous close of $58.38/b.
• The blockade on Venezuela and seizure of two tankers have sharply reduced flows from the South American country, while rising tensions between Washington and Caracas have added to regional uncertainty.

• In Depth: Memory Shortage Creates Space for China’s Lesser-Known Chipmakers
• Exclusive: Citic Bank President in Line for Top Role at China’s No. 5 Lender
• Exclusive: China’s Zheshang Bank Nominates Former Regulator as President

Highlights

• Cautious buying likely to keep price range bound in Q1 2026

• Deepening AFR 10 discounts vs INE could encourage more volume flow into China 

• NR inventory decline is largely technical, while TSR inventory continues to build

• Concerns about trade tensions, geopolitics and high debt persist. But DMs’ fiscal expansion, continued Fed rate cuts, ongoing AI boom and healthy balance sheets should keep Asia resilient in 2026.
• With record low inflation, Asian rates and COE should stay low. We expect USD moderation, boosting Asian flows. Key themes: Defense expenditure, select base metal super-cycle, continued focus on dividends.
• 2026 targets: MXASJ 985, SHCOMP 4400, Hang Seng 29000, KOSPI 5000, TWSE 30000, Sensex 91000, Strait Times 4730. Overweight HK/China, Korea and India – the latter on stock picking considerations.

• Global air freight rates edged a little lower last week according to the latest data from TAC Index, the leading price reporting agency on air freight markets.
• The global Baltic Air Freight Index (BAI00) calculated by TAC was off -3.3% in the week to December 22, leaving it at -0.6% year-on-year – still very close to where it was at this stage of 2024 when there had been a pronounced peak season high, reflecting continuing strength of demand as well as constraints on air freight capacity in the market.
• Rates out of China were lower again week-on-week both to Europe and the US, while BAI Spot rates out of Hong Kong were also falling back day by day over the week as the height of the peak season surge subsided.

• The analysis of Iron Ore Fines 62% Fe CFR Futures (TIOc1) is performed across four key technical viewpoints.
• According to Graph 1 (August 12th, 2025, to November 11th, 2025) the market entered a consolidation phase from August 12th until August 29th, 2025.
• Thereafter, the price from around $102 rose above $106 on September 9th , before gradually retreating and closing the period at $103.56 on November 11th, 2025. 

• Crude oil futures were edging higher Tuesday as geopolitical events continued to vie with supply glut fears to set the tone during the shortened holiday week.
• Front-month Feb26 ICE Brent  futures were trading at  $62.38/b (1900 GMT) versus Monday’s settle of $62.07/b, while Feb26 NYMEX WTI  was at  $58.35/b against a previous close of $58.01/b.
• Benchmarks consolidated four days of gains, having traded at around 10-day highs on Monday, as the clampdown on Venezuelan crude threatens 100s of thousands of barrels, with tanker owners scared away from the region.

• Precious metals have posted high-double-digit YTD gains but extreme RSI readings across the precious metals complex resemble prior late-cycle exhaustion phases.
• Prior silver (2011) and platinum (2008) peaks saw weekly RSI above ~88–91, conditions that historically preceded blow-off tops and sharply negative forward returns.
• With long-only demand exhausted, mean reversion in Gold–Platinum and Gold–Silver ratios offers cleaner late-cycle exposure than outright metals.

• The arrival of the second Trump administration has triggered a wave of commentary justifying lower exposure to US financial markets. Dislike of US trade policy is the main driving force.
• The case for greater exposure to Europe is undermined by significant economic stagnation and deindustrialisation in Germany, thereby raising questions about the future economic and financial stability in the region.
• Gold is the big winner in 2025 due to portfolio diversification, driven by geopolitical tensions and US dollar weakness. The consensus global economic outlook for 2026 suggests  range-bound gold prices.

• Gold has staged a convincing relative breakout. In the last cycle, the turn was accompanied by similar turns in value/growth, size and U.S./international leadership. This time, leadership rotation hasn’t happened.
• We attribute this to the “debasement trade” will carry on and hard assets will continue to dominate in the next multi-year market cycle.
• This time is different. Investors shouldn’t depend on a rotation from growth to value, large cap to small cap, and U.S. to non-U.S. equities in the near future.

• Crude oil futures opened the week higher amid concerns over Venezuelan supplies after the US seized a second tanker on Saturday and was said to be in pursuit of a third.
• Front-month Feb26 ICE Brent  futures were trading at  $62.11/b (2020 GMT) versus Friday’s settle of $60.47/b, while Feb26 NYMEX WTI  was at  $58.03/b against a previous close of $56.52/b.
• Benchmarks extended the firmer tone seen at the back end of last week after a Panamanian-flagged VLCC, named as Centuries, was intercepted by the US Coast Guard, having earlier this month seized the Skipper.

• In Depth: China Unveils More Nuanced Economic Plan for 2026
• At the conclusion of the Central Economic Work Conference in December, China’s ruling Communist Party unveiled a blueprint for 2026 that signals deep-seated structural problems, from industrial overcapacity to persistent deflationary pressures.
• By adding “promoting quality and efficiency” to its long-standing mantra of “seeking progress while maintaining stability,” Beijing is reinforcing a move away from its old playbook of debt-fueled investment to a more nuanced approach as it prepares to kick off its 15th Five-Year Plan.

• CBE likely to keep rates on hold this week.                                                                 
• Israel finally signed the gas deal with Egypt.
• Pound stable, high demand for local treasury bills.

Highlights

• October posts a sharp 20% YoY fall in export volume

• China dominates yet declines; secondary markets turn volatile

• Vietnam exports 1.47 million tons of rubber in first 10 months

• The October contraction underscored how demand-side hesitation intensified in the latter part of the year. Buyers delayed purchases amid uncertain downstream tyre demand, fluctuating currency conditions, and cautious inventory strategies.

• MVGDX concentrates in North America and silver duration, shrinking Asia to ~3% based on liquidity and replication discipline.
• AMMN breaches gold-purity retention thresholds, signalling likely removal in 2026 and passive outflows.
• BRMS remains the only credible Indonesian gold-pure substitute; Zijin inclusion unlikely before Q3-2027 due to float constraints.

• The U.S. market will experience increased turbulence in 2026 as the Federal Reserve continues to ease monetary policy and inflationary pressures intensify.  Speculative market sectors are already under pressure.
• There is a disconnect between the Administration’s claims about lowering prices and consumers’ concerns about affordability.  The disconnect is driven by inaccurate BLS inflation numbers that are greatly understated.
• The FOMC shows a historic split in the course of Fed actions through 2026, which will continue to unsettle markets regardless of who the next Fed Chairman is.

• A review of recent events and data impacting our investment themes and outlook
• Japan and US Central Banks continue to add fuel to the monetary fire
• China consumption weakness is likely to spur a tangible response in the New Year

• China’s low consumption ratio is driven by structural constraints—stagnant labour income, early and rapid household leverage, heavy debt burdens, declining workforce and persistent precautionary saving
• Such constraints on household consumption mean recent policy announcements to expand overall domestic demand will take longer than expected to deliver a durable consumption-driven Chinese economy
• China’s ten-year bond yield appears to recognise this reality, pricing in persistently weak nominal growth and subdued domestic demand rather than a consumption-driven reacceleration. It is now lower than Japan

• Inflation data broadly disappointed expectations over the past week. The labour market news was more mixed, but higher UK and US unemployment rates raise eyebrows.
• Policymakers behaved themselves, with no surprises and wide dispersion, including a BOJ hike, while the BoE delivered the finely balanced hawkish cut we expected.
• The release calendar adopts a holiday stance for the next few weeks, with only UK and US Q3 GDP data out before Christmas. This publication will be back on 9 January.

• Iron ore’s resilience looks fragile, supported by short-term supply disruptions, while weakening steel demand and looming Simandou volumes erode fundamentals.
• Managed money participants trimmed their net long exposure, signalling profit-taking aligned with price action rather than a broader shift in market conviction.
• The DCE-SGX spread lost momentum after rejecting the upper Bollinger band, breaking below key MAs and opening room for consolidation or further downside.

• A hike to 0.75% was delivered as expected, reflecting confidence in wage-led inflation momentum, though real rates remain deeply negative and uncertainty around trade policy and wage sustainability persists.
• Future tightening hinges critically on 2026 spring wage negotiations reaching 5%+ and underlying inflation remaining firm as food-price effects wane. Some dissenting board members questioned inflation’s near-term durability.
• Real interest rates at significantly negative levels permit gradual tightening toward the estimated 1-2.5% neutral range, with markets pricing 1.0% by mid-2026. Limited runway and external risks may constrain the pace of normalisation.

• BoJ signals that the next hike will not be the last, with Governor Ueda hinting that policy rates will continue to rise as long as the current economic outlook holds.
• Yen weakness and fiscal easing are emerging concerns for the BoJ, potentially keeping inflation elevated and increasing the risk of a faster tightening cycle.
• October 2026 remains our baseline for the next hike. Risks are skewed toward an earlier move though, as soon as July 2026. 

• Crude oil futures were edging higher Friday, but broader concerns over a looming surplus in the new year left prices softer on the week and languishing at just above post-pandemic lows.
• Front-month Feb26 ICE Brent  futures were trading at  $60.47/b (2007 GMT) versus Thursday’s settle of $59.82/b, while Feb26 NYMEX WTI  was at  $56.54/b against a previous close of $56/b.
• Markets found only limited support over the week from geopolitical events, with the IEA’s forecast of a near 4 million bpd glut in 2026 supressing prices.

• In Depth: How an Acclaimed Education Experiment in Beijing Ended Up on the Brink
• On the newly renovated campus of ETU Enlighten School, the laughter of a dozen students playing on a crisp early winter day belies a profound crisis.
• Inside, their teachers are waiting on months of unpaid salaries.

• Banxico cut by 25bp to 7%, broadly in line with expectations, but signalled a de facto pause with a more data‑dependent approach to future easing.
• Sticky core inflation and upward‑revised forecasts for early 2026 mean additional cuts are unlikely before mid‑2026, keeping real rates above neutral for now.
• A 4–1 split vote and fiscal/trade‑related upside risks to inflation argue for a prolonged hold in Q1 2026, limiting the scope and speed of the remaining easing cycle.

• Oil slips below 60$. New 2-year KD issuance in Kuwait.                                                          
• CPI lower in Dubai and Saudi Arabia.
• Demand for SAR funding to remain sustained in 2026.

• The MPC’s 5:4 vote split delivered another finely balanced rate cut, but the doves are divided, with only two likely to roll straight into supporting another cut in February.
• Most MPC members favour caution, or an explicitly slower path of rate cuts, which probably means they expect to wait until March or May before easing further.
• The disinflationary evidence may not arrive with pay settlement plans in the new year, or later, so we still see this as the last BoE rate cut. The global policy cycle is turning.

• Hong Kong’s market continues its consolidation in a Secular Bull Market.  Technology and healthcare sectors have weakened, while utilities, telecom, and energy sectors have strengthened.
• Mainland investors have slowed net buying through the Southbound Connect platform.  Dividend yield, value and low volatility are leading investment factors since October. Growth and momentum factors have lagged.
• Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK) is initiated as BUY at Shenwan Hongyuan.  VLCC rates to China are rising amid U.S. oil sanctions on Russia and Venezuela.

• Stronger wage and service price inflation have shrunk the Q1 target undershoot to only 0.1pp, removing the space that doves hoped might free the ECB to cut again.
• Spending over half the year on hold and in a “good place” creates an inertia that will be hard to break towards another cut. We still see the ECB’s easing cycle as over.
• Rolling the disinflationary trend back a year helps soften hawkish pressures, but losing this amid ongoing strength seems more likely to push the ECB into a hawkish direction.

• In Depth: How ‘Paper Wealth’ Masks Risks for Chinese Insurers
• When state-owned Dajia Insurance Group Co. Ltd. spent billions of yuan earlier this year buying into Industrial Bank the deal seemed unremarkable at first glance
• With the global manufacturing landscape undergoing seismic shifts, both China and India’s factory sectors are changing fast.

• Crude oil futures Thursday extended midweek gains as geopolitics and the potential threat to supplies helped markets claw back some of the recent losses.
• Front-month Feb26 ICE Brent  futures were trading at  $59.99/b (1903 GMT) versus Wednesday’s settle of $59.68/b, while Jan26 NYMEX WTI  was at $56.13/b against a previous close of $55.94/b.
• Benchmarks lifted off Tuesday’s multi-year settlement lows on after US President Donald Trump said that the US will impose a shipping blockade Venezuela, targeting sanctioned oil tankers.

Highlights

• China’s share in total Thai exports shoot up to 40% in October

• US imports from Thailand nosedives amid manufacturing lull

• South Korea moves up and Japan moves down month-on-month

• Heavy rainfall in early October—linked to the residual impact of Typhoon Matmo—disrupted tapping activity and tightened raw-material availability in key producing regions of Thailand. Flooding, reported in parts of the country during the second week of the month, reinforced supply concerns

• South Korean export prices rose 7 percent year on year, signaling a strong recovery after summer weakness, while Chinese real retail sales grew around 3 percent despite nominal softness.

• Chinese monetary aggregates expanded, with M2 up 8 percent and M0 growth at 10.6 percent, indicating monetary and credit support despite consumer price deflation.

• Thailand cut interest rates slightly, Japanese yields surged beyond policy adjustments, and U.S. artificial intelligence investment faces structural limits, likely causing widespread disappointment in returns.

• UK inflation’s 31bps slowing to 3.15% went far further than expected, with significance raised by the substantial extent and the breadth of downside across divisions.
• However, the news was more concentrated at a component level, leaving the median impulse annualising to 2.3%. We still see underlying pressures driving persistent excess.
• The Governor sought confirmation of disinflation before cutting rates again, so this surprise should secure that move in December, without any commitment to do more.

• Another downward food price revision cut HICP inflation back to 2.1% in November, but the effect was only 1.6bp, and services inflation was marginally stronger than before.
• Service prices are not converging on levels consistent with the ECB’s target, and many underlying metrics are too high. The median is a notable exception, broadly below 2%.
• The ECB’s “good place” assessment should be unaffected by any of this, nor the base effects driving things slightly below the target in January. It should sound neutral.

• Whatever economic scenario unfolds in 2026, a long Gold/short Bitcoin investment should outperform. The position is up more than 50% since October.
• As one of the most leveraged and speculative parts of global asset markets, Bitcoin will struggle as the Fed ends its interest rate cuts by the end of 2026.
• Gold continues to benefit from the Fed’s pro-inflation policies, particularly with the restart of its $40 billion monthly QE program. Continued currency debasement also supports a contnuation of gold’s rise.

• The Treefera Yield Forecast System (TFFS) combines satellite-observed canopy conditions, weather histories and estimated yield sensitivities, and all these signals pointed in the direction of a record-level wheat crop from early in the season.
• High canopy vigour across major winter-wheat belts, low to moderate weather-driven stress scores, and favourable yield-response modelling collectively indicated that 2025 would deliver another above-trend national outcome.
• This integrated signal stack enabled Treefera to provide granular, county level yield and stress assessments well ahead of USDA updates, forming the analytical backbone of the report that follows.

• The outside view matters most: every major tech revolution in history ended up with overinvestment and a painful reset, making crashes the rule, not the exception.
• The inside view always feels unique all the time – but eye-watering spending, speculative capital, financial engineering, and the belief that “this time is different” were present in past frenzies, too.
• You don’t need to time the top: build a more resilient portfolio by trimming your profit, limiting position sizes, avoiding crowding, while using diversification, trend rules, or selective hedges.

• In Depth: China’s Developers Try to Modernize After Surge in Subpar Homes China’s housing market is undergoing a reckoning in quality.
• Two-thirds of new homes delivered in 2025 were rated “poor” quality, a sixfold surge in just three years.
• In response, Beijing is pushing a nationwide campaign for “good houses” — raising standards, enforcing mandatory specifications, and pressuring developers to rebuild trust after years of shortcuts.

• Crude oil futures rebounded from near five-year lows Wednesday after Venezuelan oil supplies were threatened by additional enforcement against sanctioned crude.
• Front-month Feb26 ICE Brent futures were trading at $60.24/b (2048 GMT) versus Tuesday’s settle of $58.92/b, while Jan26 NYMEX WTI was at $56.42/b against a previous close of $55.27/b.
• Crude bounced from the lowest settlements since 2021 after US President Donald Trump said he was ordering a “total and complete” blockade of all sanctioned oil tankers going into and out of Venezuela.

• Throughout the corn growing season multiple signals pointed towards the bumper crop yields.
• The satellite, weather and fundamental signals pointed in the direction of a huge season for corn from April onwards.
• The Treefera Yield Forecast System (TFFS) combines satellite-observed canopy conditions, weather histories and estimated yield sensitivities.

• EM allocations in Global funds have broken out of a multi-year range, reaching the highest level since 2019 as underweights narrow.
• The move is led by Taiwan, China & HK, and South Korea, with strong inflows and rising fund participation.
• Despite the shift, EM exposure remains shallow and concentrated, making higher allocations a clear point of differentiation.