Vi e w p o i n t | 06 Jan 2026 23:20:40 ET │ 13 pages China Economics Could Renminbi Revaluation Lead to Economic Rebalancing? CITI'S TAKE RMB appreciation expectations are accumulating as China's trade surplus surges to a historic >US$1trn. The question goes further to whether a stronger currency will help rebalance the Chinese economy. Perhaps yes for external rebalancing, but certainly not for internal rebalancing, in our view. The latter still calls for more direct stimulus and structural measures to em ...

January 5, 2026 04:33 PM GMT Cross-Asset Spotlight | Global Resilient into Year-End Signals, Flows, & Key Data: A weekly summary of key cross-asset monitors, data, moves, and models tracking sentiment, fund flows, and positioning. Last week, FTSE 100 reached all-time highs, gold closed the year with its strongest annual gain in four decades, USDCNY dipped to a two-year low. Key highlights from last week: Exhibit 1: Morgan Stanley forecasts | As of Jan Q4 2026 Forecast | | Q4 2026 Return Forecast | | Volatil ...

Global Economy & Policy Insight Weekly 10 December 2025 Takahide Kiuchi is executive economist at Nomura Research Institute. This is his personal view. Takahide Kiuchi t-kiuchi@nri.co.jp To receive this publication, please contact your local Nomura representative. Estimating the economic hit from possible China restrictions on rare earth exports to Japan Summary: The Chinese government has responded to Prime Minister Sanae Takaichi's recent remarks about Taiwan by asking Chinese citizens to refrain from tra ...

8 December 2025 China Economic Comment Exports bounced - a mild positive surprise Exports returned to y/y growth again Exports grew by 5.9% y/y in November, a mild positive surprise compared to the 4.0% growth expected by Bloomberg consensus and a significant improvement versus the 1.1% contraction recorded in October. On a seasonally adjusted basis, we estimate the export level expanded by 2.2% over the month. Export momentum (%3m/3m) also ticked up slightly, after moderating for six months. In real terms, ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on global markets, particularly US equities, UK gilts, and commodities like silver and gold. It provides insights into market sentiment, fund flows, and positioning across various asset classes. Core Insights and Arguments - **US Equities Performance**: The S&P 500 increased by 3.7% last week, recovering losses from November. The bullish outlook for US equities is maintained, with strategists viewing recent corrections as opportunities to reinforce recovery strategies [7][71]. - **UK Gilts Rally**: Following the Budget announcement, UK gilts experienced a bull-flattening move, indicating a positive outlook for nominal longs and linkers due to increased fiscal headroom and a supportive fiscal stance [7][18]. - **GBP Movement**: The GBP saw a rally post-Budget as investors adjusted their hedges. However, strategists are cautious about the currency's future due to anticipated rate cuts that may negatively impact its value [7][10]. - **Silver Price Surge**: Silver prices rose by 13.1%, reaching an all-time high, outperforming broader commodity indices [7][71]. - **Market Sentiment**: The Market Sentiment Indicator (MSI) reflects a mix of negative and positive sentiment, with current readings indicating a cautious outlook among investors [58][64]. Additional Important Insights - **Equity Sector Performance**: Materials and communication services led global equity sector gains, with increases of 5.2% and 4.7%, respectively [71]. - **Credit Market Dynamics**: Credit spreads tightened, particularly in US high yield (HY) bonds, which saw a 32 basis point tightening [71]. - **Currency Trends**: The DXY index fell by 0.7%, with both developed and emerging market currencies gaining against the dollar [71]. - **Forecasts for 2026**: Morgan Stanley's forecasts for various asset classes indicate a range of expected returns and volatility, with equities and commodities showing significant potential for growth [3][17]. Conclusion - The report highlights a recovery in US equities, a bullish outlook for UK gilts, and significant movements in commodity prices, particularly silver. Market sentiment remains cautious, with strategists advising careful positioning in light of potential rate cuts and economic uncertainties.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the global financial markets, particularly US equities, UK gilts, and commodities like silver. Core Insights and Arguments - **US Equities Performance**: The S&P 500 index increased by 3.7% last week, recovering losses from November, indicating a bullish outlook from US equity strategists who view recent corrections as buying opportunities [8][10] - **UK Gilts Rally**: UK gilts experienced a bull-flattening move following the Budget announcement, which revealed increased fiscal headroom and a supportive fiscal stance. This led to a bullish outlook for nominal longs and linkers, with supply expected to remain low until April 2026 [8][19] - **GBP Movement**: The GBP saw a rally post-Budget as investors unwound hedges, although strategists anticipate limited positive catalysts for the currency due to expected rate cuts [8] - **Silver Surge**: Silver prices climbed by 13.1%, reaching an all-time high, outperforming broader commodity indices [8][72] Important but Overlooked Content - **Market Sentiment**: The Market Sentiment Indicator (MSI) aggregates various data points to quantify market stress and sentiment, indicating a shift towards risk-on sentiment [59] - **Cross-Asset Flows**: The report tracks daily fund flows across approximately 5,000 ETFs globally, covering around $7 trillion in assets, providing insights into cross-asset sentiment and positioning [22] - **Credit Spreads**: US high-yield credit spreads tightened by 32 basis points, reflecting improved market conditions [72] - **Currency Trends**: The DXY index lost 0.7%, with both developed and emerging market currencies gaining against the dollar, indicating a shift in currency dynamics [72] Forecasts and Projections - **Morgan Stanley's Forecasts**: The report includes forecasts for various asset classes, indicating expected returns and volatility for Q4 2026, with a focus on equities, fixed income, and commodities [3][18] - **Equity Sector Performance**: Materials and communication services led gains in global equity sectors, with materials up by 5.2% and communication services by 4.7% [72] This summary encapsulates the key points from the conference call, highlighting the performance of various asset classes, market sentiment, and future forecasts.

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.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **rare earth industry** and the geopolitical dynamics between **China** and the **United States** regarding rare earth exports and technology controls. Core Insights and Arguments 1. **China's Export Control Strategy**: Beijing's recent tightening of rare earth rules, effective December 1, aims to strengthen its export control power and respond to U.S. tech restrictions. This includes licensing for foreign goods with ≥0.1% Chinese content and case-by-case approval for inputs used in sub-14nm semiconductors [2][3][4] 2. **Geopolitical Leverage**: China's rare earth controls are designed to serve as leverage in the ongoing tech rivalry with the U.S., particularly ahead of APEC meetings. The timing of these controls is seen as a response to increased U.S. restrictions on China [4][18] 3. **Challenges in Enforcement**: The extraterritorial enforcement of China's rare earth controls is expected to be challenging due to limited global compliance infrastructure compared to the U.S. system, which has a mature compliance network and strong international support [9][11][12] 4. **China's Dominance in Supply Chain**: China holds a dominant position in the rare earth supply chain, with significant market shares in refining (88%) and magnet production (90%). This dominance is reinforced by a ban on exports of critical technologies related to rare earth processing [8][13] 5. **Risk of Overreach**: Aggressive enforcement of rare earth controls by China may accelerate global diversification efforts in rare earth supply chains, as countries like the U.S., EU, and Japan are already advancing joint procurement and strategic stockpiling initiatives [14][18] 6. **Long-term Competitive Confrontation**: The relationship between the U.S. and China is expected to remain characterized by competitive confrontation, with tactical escalations likely but a complete decoupling being improbable due to the economic interdependence [17][18] Additional Important Points 1. **Technological Self-sufficiency**: China's semiconductor self-sufficiency remains low at 24%, with projections to reach 30% by 2027. This indicates vulnerabilities in China's tech landscape that could be exploited by expanded U.S. controls [16] 2. **Calibrated Execution of Controls**: While China is unlikely to reverse its rare earth controls, the implementation will be calibrated to maintain supply continuity, allowing compliant cases to obtain approvals [19] 3. **International Responses**: Various countries are taking steps to diversify their rare earth supply chains, including the U.S. launching initiatives to secure critical materials outside of China and Japan collaborating with France on rare earth projects [23][24] This summary encapsulates the critical aspects of the conference call, highlighting the strategic maneuvers in the rare earth sector and the implications for U.S.-China relations.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Chinese Exports and Trade Dynamics - **Key Focus**: The current state and trends of Chinese exports, particularly to the US, and the implications of recent negotiations between the US and China Core Insights - **Export Stabilization**: Exports to the US have stabilized at a low rate, with a notable contraction of -17.4% year-on-year (YoY) in container departures for the US during the 15 days ending September 17, improving from -24.1% YoY a week prior [1][14] - **Negotiation Outcomes**: Recent negotiations in Spain have led to breakthroughs regarding TikTok, suggesting that risks of US-China tariff re-escalation may be easing, which could positively impact China's export outlook [1][1] - **Cargo Throughput Improvement**: Overall cargo throughput in China increased by 8.5% YoY in the week ending September 14, up from 7.2% YoY the previous week, indicating a steady expansion in exports [1][4] - **Container Export Volume**: The container export volume turned positive at 4.0% YoY in the week ending September 12, compared to a decline of -3.5% YoY the week before, signaling potential growth in exports for September [1][10] Additional Important Details - **US Import Bills**: The year-on-year decline in US import bills for seaborne imports from China has eased, indicating a potential recovery in demand [1][7] - **Future Outlook**: There is an expectation that concerns regarding China-US exports may shift towards the strength of US demand into the fourth quarter of 2025 [1][1] - **Low Base Effect**: The anticipated improvement in export growth is partly attributed to a low base from the previous year, suggesting that growth rates may appear more favorable in the short term [1][1] This summary encapsulates the key points discussed in the conference call regarding the current state of Chinese exports, the implications of US-China negotiations, and the overall outlook for the industry.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on China's trade performance in August, highlighting a moderation in trade growth compared to previous months [1][5][9]. Core Insights and Arguments 1. **Trade Growth Moderation**: - China's exports increased by 4.4% year-over-year (yoy) in August, down from 7.2% in July. Imports rose by only 1.3% yoy, compared to 4.1% in July [2][9]. - Sequentially, exports decreased by 1.0% seasonally adjusted (sa) non-annualized in August, while imports fell by 2.0% sa non-annualized [9]. 2. **Trade Surplus**: - The trade surplus for August was reported at US$102.3 billion, an increase from US$98.2 billion in July [3][9]. 3. **Regional Export Performance**: - Exports to the EU and ASEAN showed growth, while exports to the US, Latin America (LatAm), and Africa declined. Notably, exports to the US fell by 33.1% yoy in August [10][11]. 4. **Import Trends**: - Imports from the US decreased by 16.0% yoy in August, while imports from the EU fell by 1.8% yoy. Overall, imports from major trading partners declined sequentially [10][12]. 5. **Product Category Insights**: - Exports of tech-related products, such as chips and automobiles, saw significant growth, with chip exports rising by 32.8% yoy. However, exports of metals and textiles declined [11]. - Import values for automobiles dropped sharply by 50.5% yoy, while agricultural product imports increased [12]. Additional Important Information - The report indicates that fewer working days in August likely contributed to the overall moderation in trade growth across major trading partners [1]. - The detailed breakdown of trade by country and product is expected to be released on September 20 [9]. - The report emphasizes that the data only covers major trading partners and products, suggesting a limited scope for the analysis presented [9][14]. This summary encapsulates the key findings and insights from the conference call regarding China's trade performance in August, highlighting both the challenges and areas of growth within the trade landscape.