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.
