CoreMacro

DeepSeek's AI breakthrough will likely enhance China’s productivity gains. But does it justify a re-valuation in Chinese tech stocks? Sustaining the Chinese tech rally will require corporate profits to overcome the pressures of China’s deflationary cycle. Meanwhile, DeepSeek’s innovations may fuel greater competition, intensifying price wars and putting further strain on Chinese tech companies’ profit margins.

Expectations of US import tariffs drove the latest upleg in the prices of precious and industrial metals. However, there are no significant economic or political incentives for the US to impose import tariffs on these metals. Therefore, investors should fade the recent spike in gold, silver, platinum and copper prices. We are initiating a short position on silver as a tactical trade.

Special Report

This is a follow-up report on Bessenomics – the policy mix that US Treasury Secretary Scott Bessent plans to pursue. The direction of US and global financial markets depends on the amount of fiscal tightening required to bring down US interest rates. Can the Trump administration cut fiscal spending just enough to bring down US bond yields but not cause a recession?

Special Report

Argentina is entering a regime shift from the traditional short boom-bust cycles of the past 50 years. Profound structural reforms will result in a productivity boom, leading to a more durable economic expansion while keeping with the disinflation trend. Authorities will likely lift capital and currency controls in the second quarter of this year. All in all, odds are that Argentinian assets have entered a multi-year bull market.

Last week, I visited clients in Europe. My recent report on Bessenomics – the name we gave to US Treasury Secretary Scott Bessent's policy mix – was often the focal point of the discussions. We will continue discussing Bessenomics, its progress, and its investment implications in forthcoming reports. In the meantime, we are sending my chart pack used during this trip as a Charts That Matter publication – a chart-based report. It covers the following areas: China, Bessenomics, US fixed income, global currencies, EM credit markets, the global ex-US business cycle, EM and US equities, and an EM local bond relative value matrix. In my opinion, the most important variable in global financial markets are US long-term Treasury yields. If they hold above their 200-day moving average, odds are that new highs lie ahead. My hunch is that 10-year yields will break above 5%. When and as this happens, global risk assets will sell off considerably.

Special Report

There is no better way to gauge the macro policies of the new US administration than being privy to President Donald Trump’s discussions with the new Treasury Secretary, Scott Bessent. While we do not have inside information, we have put the pieces of the puzzle together to help clients see the big picture. This report presents our take on a hypothetical conversation between President Trump and Scott Bessent that led to the latter’s appointment as Treasury secretary.

Can Singapore stocks continue the bull run into 2025? What does the city-state’s manufacturing and export outlook foretell? Is the Singapore dollar still competitive? See our analysis and investment recommendations in today’s report.

US bond yields will move higher, unleashing a storm in global financial markets. In the US, rising corporate bond yields will produce a selloff in share prices. In Mainstream EM, rising domestic and USD bond yields will weigh on share prices.

Any additional fiscal tightening and further rate hikes might serve as a band-aid, but not a cure, to Brazilian markets. The country’s risk assets and the currency will continue to face headwinds from an impending recession, a strengthening USD, weak commodity prices, and worsening public debt dynamics. Investors should fade out any relief rallies in Brazilian markets for now.