Summary of the 2026 Asia Macro Strategy Outlook Industry Overview - **Focus**: Asia Ex-Japan (AXJ) currencies and rates outlook for 2026 - **Key Themes**: Trade recovery, monetary policy changes, and economic rebalancing in China Key Points Currency Outlook 1. **Improved Trade Outlook**: Non-tech exports are expected to recover, benefiting AXJ currencies, particularly SGD, THB, MYR, and KRW, which have significant non-tech export shares in GDP [13][14][31] 2. **Projected Currency Appreciation**: AXJ currencies are anticipated to appreciate by approximately 3% in 1H26, driven by USD weakness and export recovery [9][31] 3. **Performance Variance**: KRW, MYR, and SGD are expected to outperform, while PHP is projected to underperform due to weaker domestic fundamentals [7][31] 4. **China's Limited Impact**: The economic rebalancing in China is expected to have a limited positive effect on AXJ currencies, with a stable exchange rate policy from the PBOC [19][20][64] Rate Outlook 1. **End of Easing Cycles**: Most AXJ central banks are nearing the end of their easing cycles, with the potential for rate hikes in 2026, particularly in Indonesia and the Philippines [46][49][130] 2. **Rising Yields**: AXJ yields are expected to rise in 2026 as growth improves and disinflationary pressures abate, particularly in 2H26 [38][53] 3. **Divergence from US Rates**: The influence of US rates on AXJ local rates has decreased, allowing for local yields to rise independently [40][49] Economic Factors 1. **Disinflationary Pressures**: Disinflationary pressures are expected to ease, supporting higher yields, with India and the Philippines seeing the most significant increases in inflation [53][55] 2. **Fiscal Policy Stability**: Most AXJ economies are expected to maintain stable budget balances, with some countries like China and Singapore potentially adopting more expansionary fiscal policies [55][56] Trade Ideas 1. **Short TWD/KRW**: A trade idea suggesting shorting TWD against KRW, targeting a rate of 45.40 with a stop at 47.70 [35][63] 2. **Receive 5-year CNY NDIRS**: This trade idea is based on the muted growth and inflation outlook for China [58][63] 3. **Receive 5-year THB NDTHOR**: Targeting a yield of 1.12% with a stop at 1.42% due to softer inflation and GDP [59][63] Additional Insights 1. **Korea's Growth Potential**: Korea is expected to see significant foreign equity inflows and benefits from both non-tech and tech exports [89][90] 2. **Malaysia's Strong Fundamentals**: Despite rich valuations, Malaysia's economic fundamentals remain robust, with a strong export recovery expected [127][130] 3. **Thailand's Uncertainty**: The upcoming elections and the central bank's efforts to manage currency valuation could moderate THB's appreciation potential [120][121] Conclusion - The AXJ region is poised for a modest recovery in both currency appreciation and yield increases in 2026, driven by improved trade dynamics and the conclusion of easing cycles across central banks. However, individual country performances will vary based on domestic economic conditions and external factors such as USD movements and geopolitical developments.

Group 1 - Major banks on Wall Street are preparing for another strong year in emerging markets, driven by a weak dollar and a surge in investments in artificial intelligence [1] - Emerging market bonds denominated in local currencies are expected to yield a 7% return, the best since 2020, with currency indices rising over 6% [1] - Morgan Stanley predicts that returns on local currency emerging market bonds will reach about 8% by mid-2026, while dollar-denominated emerging market bonds are expected to see "high single-digit" growth in the next 12 months [1] Group 2 - Other banks, including Bank of America and Goldman Sachs, also forecast a weakening dollar, with Bank of America predicting over 10% returns on local emerging market bonds next year, particularly recommending the Turkish lira and Brazilian real [2] - JPMorgan highlights significant corporate capital expenditure plans in artificial intelligence, predicting that by 2028, U.S. capital spending related to AI will reach $628 billion, impacting emerging markets through technology exports and rising metal prices [2] - JPMorgan expects $40 billion to $50 billion in inflows into emerging bond funds next year, driven by improved market sentiment and structural low holdings of emerging market assets [2]

Group 1 - Wall Street maintains an optimistic outlook for emerging markets in 2026, driven by a weak dollar and investment in artificial intelligence, with expected returns of 7% for local currency bonds, the best performance since 2020 [4][5] - Morgan Stanley strategists suggest maintaining long positions in emerging market local currency bonds, predicting returns of around 8% by mid-2026, and high single-digit gains for emerging market dollar bonds over the next 12 months [5] Group 2 - Gold prices have declined from a near two-week high as traders assess the possibility of a U.S. rate cut in December, with spot gold at $4,157.29 per ounce, down 0.2% [7] - UK Bank of England policymaker Green indicated that measures to reduce household energy bills by £150 ($199) annually may help lower inflation expectations, although the policy's impact remains unclear [8][9] Group 3 - Dutch prosecutors have fined Morgan Stanley €101 million ($117.1 million) for dividend tax evasion, separate from tax liabilities to the Dutch tax authority due by the end of 2024 [11] Group 4 - Ukrainian President Zelensky announced that Ukrainian and U.S. delegations will meet this week to discuss peace and security arrangements following Geneva talks [13][14] Group 5 - OPEC+ is expected to maintain current oil production levels in an upcoming meeting and may agree on a mechanism to assess member countries' maximum production capacity [16]

Core Points - flatexDEGIRO AG has released a notification regarding changes in voting rights, indicating a decrease in their voting rights percentage [1][5] - Morgan Stanley has crossed the threshold of 3% voting rights in flatexDEGIRO AG, with a total of 3.11% voting rights reported [4][5] - The notification was triggered by a disposal of client securities over which Morgan Stanley & Co. LLC had a right of use [12] Company Details - The issuer, flatexDEGIRO AG, is located at Omniturm, Große Gallusstraße 16-18, Frankfurt / Main, Germany [2] - The Legal Entity Identifier (LEI) for flatexDEGIRO AG is 529900IRBZTADXJB6757 [2] Voting Rights Changes - As of November 21, 2025, Morgan Stanley's voting rights in flatexDEGIRO AG decreased from 3.02% to 2.95% attached to shares, and the total voting rights decreased from 3.18% to 3.11% [5][6] - The total number of voting rights in flatexDEGIRO AG is reported as 110,134,548 [5] Instruments and Voting Rights - Morgan Stanley holds 179,483 voting rights (0.16%) through securities lending agreements [8] - Additionally, a Retail Structured Product held by Morgan Stanley has a negligible voting right of 50 [9] Notification Obligations - The notification obligation is attributed to Morgan Stanley, which does not control or is controlled by any other entities holding interests in flatexDEGIRO AG [10]

Core Viewpoint - Morgan Stanley recommends maintaining long positions in emerging market local currency bonds, expecting a return of around 8% by mid-2026 due to a potential slowdown in the US economy and further interest rate cuts by the Federal Reserve [1]. Group 1: Emerging Market Bonds - The firm anticipates a "high single-digit" increase in emerging market dollar bonds over the next 12 months [1]. - James Lord, head of emerging market FX strategy at Morgan Stanley, stated that Fed rate cuts will exert downward pressure on the dollar, which will help lower US Treasury yields and create a favorable environment for emerging markets [1].

Core Insights - Morgan Stanley has set the price for fine gold at $4,500 per 1000 grams [1][2] Group 1 - Morgan Stanley's valuation of fine gold indicates a significant price point in the precious metals market [1][2]

Core Points - The Dutch Public Prosecutor has imposed a fine of 101 million euros ($117.10 million) on two Morgan Stanley entities for dividend tax evasion [1] - The penalty is distinct from the tax liability that Morgan Stanley settled with the Dutch Tax Administration at the end of 2024, which includes accrued interest [1] - Morgan Stanley utilized a special structure that allowed ineligible parties to improperly claim tax rebates, violating Dutch law [2] - The financial services company agreed to accept the fine just before the commencement of criminal proceedings [2] - Morgan Stanley expressed satisfaction in resolving this historical matter related to corporate tax returns filed over 12 years ago [3]

Core Points - Dutch prosecutors imposed a fine of €101 million (approximately $117 million) on Morgan Stanley for dividend tax evasion and submitting false tax returns [1] - The fine relates to "Cum-Cum transactions" involving Morgan Stanley's subsidiaries in London and Amsterdam, which allowed foreign stockholders to lend securities to local tax-exempt entities to avoid withholding tax on dividends [1] - Morgan Stanley allegedly designed transaction structures that enabled ineligible entities to unlawfully benefit from tax credits or refunds on dividend taxes [1] Company Summary - Morgan Stanley established a Dutch subsidiary between 2007 and 2012 to temporarily hold stocks during dividend distribution periods, earning a total of €830 million in dividend income [1] - The company claimed a total of €124 million in withholding tax credits on its corporate tax returns from 2009 to 2013 related to these transactions [1] - A spokesperson for Morgan Stanley expressed satisfaction with resolving this historical matter, which pertains to tax returns submitted in the Netherlands 12 years ago [2] Industry Context - European prosecutors are increasingly focusing on dividend stripping transactions, which have generated hundreds of millions of euros in dividend income for banks, with some countries deeming them illegal [2] - Criminal investigations have been initiated against several banks, including BNP Paribas, HSBC, and Société Générale, in France for similar practices [2] - The French tax authorities are seeking to recover at least €4.5 billion in tax losses and have expanded their investigations to include major Wall Street investment banks like Goldman Sachs and Bank of America [2]

Group 1 - Albert Anthony is a Croatian-American business author and analyst contributing to platforms like Seeking Alpha and Investing.com, with a focus on Real Estate Investment Trusts (REITs) [1] - He has over 1,000 followers on Seeking Alpha and has authored a book titled "Real Estate Investment Trusts (REITs): A Fundamental Analysis (2026 Edition)" [1] - Anthony has a background in business information systems and has worked at Charles Schwab, supporting enterprise applications and trading platforms [1] Group 2 - He manages his own boutique equities research firm, Albert Anthony & Company, remotely from Texas [1] - Anthony has participated in numerous business and innovation conferences in the EU market, particularly in Croatia [1] - He is currently pursuing certifications in Capital Markets & Securities Analyst (CMSA) and business intelligence/data analysis through the Corporate Finance Institute [1] Group 3 - The author is an active investor in REIT stocks and shares insights on his YouTube channel [1] - He does not write about non-publicly traded companies, small cap stocks, or startup CEOs [1] - Albert Anthony & Company is a sole proprietorship registered in Austin, Texas, and does not provide personalized financial advisory services [1]

Group 1 - Wall Street is increasingly optimistic about the stock market's potential for growth in 2026, with predictions suggesting the S&P 500 could reach 8000 points driven by the AI boom [2][3] - Deutsche Bank has set a target of 8000 points for the S&P 500 by the end of 2026, citing strong capital inflows, stock buybacks, and sustained earnings growth as key drivers [2] - The S&P 500 companies reported a 13.4% earnings growth in Q3, indicating robust performance that supports the bullish outlook for 2026 [2] Group 2 - Wells Fargo anticipates a double-digit increase in the stock market over the next 12 months, with a target of 7800 points for 2026, expecting a two-phase rebound driven by AI [3] - Morgan Stanley also predicts a strong year ahead, forecasting the S&P 500 to close at 7800 points in 2026, with the end of a rolling recession and continued policy support [2][3] - JPMorgan's baseline forecast for 2026 is 7500 points, but they believe that improved inflation prospects could push the index above 8000 points [3] Group 3 - The market is pricing in an 83% chance of a rate cut by the Federal Reserve in December, a significant increase from the previous week's 30% probability [4] - JPMorgan's chief equity strategist highlights that current high multiples reflect expectations for above-trend earnings growth and increased shareholder returns, despite concerns about an AI bubble [4] - HSBC shares a similar outlook, projecting a target of 7500 points for 2026, indicating a potential for double-digit growth akin to the late 1990s market boom [4]