ISSUE 147 | March 20, 2026 | 4:18 PM EDT IRAN CONFLICT: HOW LONG, AND HOW BAD? The unprecedented US and Israeli coordinated attack on Iran has resulted in the largest energy supply disruption in history. With seemingly no end to the conflict in sight, its potential duration, impact on global energy supplies, and economic and market implications are Top of Mind. Chatham House's Sanam Vakil and long- time US Middle East advisor Dennis Ross agree that an end to the conflict doesn't look imminent owing to (the ...

Summary of Key Points from the Conference Call on China Battery Metals Industry Overview - The focus of the call was on the nickel market, particularly in relation to battery metals and the impact of supply chain dynamics on pricing and availability. Key Insights on Nickel Market - **Volatility in Nickel Prices**: Nickel prices are expected to be volatile in 2026 due to uncertainties surrounding Indonesia's nickel mining quota (RKAB) policy. The RKAB quota for 2026 is projected to be between 260 million to 270 million wet metric tons (wmt), which is approximately a 30% reduction from 379 million wmt in 2025 [2][3]. - **Demand and Supply Gap**: The total gross demand for Indonesian nickel ore is forecasted at 327 million wmt in 2026, indicating a potential shortage of 57 million to 67 million wmt. This gap may be mitigated by 25 million wmt of imported ore from the Philippines and excess inventory in industrial parks [2][3]. - **Government Policy Impact**: The Indonesian government has a history of increasing RKAB quotas in the second half of the year, with a potential 30% increase in July 2026 based on current quotas. If no additional quotas are added, the nickel market may face a tight balance or deficit, leading to elevated prices [2][3]. Supply Chain Risks - **Sulphur Shortage**: There is a potential shortage of sulphur in Indonesia, primarily due to conflicts in the Middle East, which supplies 76% of Indonesia's sulphur imports. Sulphur is crucial for the high-pressure acid leaching (HPAL) process used to produce mixed hydroxide precipitate (MHP) nickel products, accounting for 35% of MHP production costs. A shortage could put 16% of the total nickel supply at risk if inventory runs out by late April or early May 2026 [3]. Battery Demand Insights - **Resilient Battery Demand**: The demand for lithium-ion batteries remains strong, with scheduled production for energy storage systems (ESS) batteries increasing by 19.7% month-over-month in March and expected to rise further after May. Electric vehicle (EV) battery production is also projected to increase by 27.3% month-over-month in March, indicating a recovery in EV demand [4]. - **Low Inventory Levels**: The entire battery supply chain is experiencing low inventory levels, with lithium chemical inventory at 2-3 weeks, LFP cathode inventory at 3-14 days, and NCM cathode inventory at 7 days. This tight inventory situation supports the lithium price, which is expected to remain above RMB 150,000 per ton lithium carbonate equivalent (LCE) [4]. Conclusion - The nickel market is facing significant challenges due to policy changes in Indonesia and potential supply chain disruptions, particularly related to sulphur availability. However, the demand for battery metals, especially for lithium-ion batteries, remains robust, which may help stabilize prices in the face of these challenges. This summary encapsulates the critical insights from the conference call, highlighting the dynamics of the nickel market and the implications for the battery metals industry.

ASIA ECONOMICS ANALYST 13 March 2026 | 12:24PM HKT Economics Research Updating forecasts for the energy supply shock Andrew Tilton +852-2978-1802 | andrew.tilton@gs.com Goldman Sachs (Asia) L.L.C. Andrew Boak, CFA +61(2)9321-8576 | andrew.boak@gs.com Goldman Sachs Australia Pty Ltd Akira Otani +81(3)4587-9960 | akira.otani@gs.com Goldman Sachs Japan Co., Ltd. Hui Shan +852-2978-6634 | hui.shan@gs.com Goldman Sachs (Asia) L.L.C. Goohoon Kwon, CFA +852-2978-0048 | goohoon.kwon@gs.com Goldman Sachs (Asia) L.L. ...

海外宏观 2026 年 3 月 16 日 宏 观 报 告 海外宏观周报 原油、美元双"破百" 证券分析师 截至 3 月 14 日当周：美伊冲突持续，原油、美元破百，避险交易延续。股 票：除中国创业板指、沪深 300 和香港恒生科技上涨外，其余全球主要股指 均基本持平或收跌。债市：美债收益率持续回升，延续能源再通胀的交易。 商品：当周原油价格持续上行，布伦特原油突破 103 美元/桶，而铝价抬升 有所收敛。汇率：美元指数升破 100，市场避险需求叠加美国产油国地位持 续推动美元上涨；其他非美货币集体下跌。 风险提示：美伊冲突超预期升级，美国通胀上行超预期，全球金融市场波动超预 期等。 宏 观 周 报 证 券 研 究 报 告 张璐 投资咨询资格编号 S1060522100001 ZHANGLU150@pingan.com.cn 杨见一 投资咨询资格编号 S1060526020001 YANGJIANYI730@pingan.com.cn 平安观点： 海外经济政策 1) 特朗普暗示战争"即将结束"，但美军袭击并未停止。3 月 13 日美军袭击 原油枢纽哈尔克岛，但未摧毁岛上石油基础设施。尽管特朗普 3 月 9 日向 ...

10 March 2026 | 2:57PM HKT Economics Research China: Trade growth accelerated sharply in January-February Bottom line: China's trade growth accelerated sharply in January-February (exports: +21.8% yoy, imports: +19.8% yoy) and came in well above consensus expectations. Chinese nominal exports to major trading partners rose sequentially in January-February. By product, export value rose broadly in sequential terms, with tech-related exports rising the most. Chinese imports from major trading partners (except ...

Summary of Key Points from Citi Research Conference Call Industry Overview - **Global Economics**: The report discusses the impact of geopolitical tensions in the Middle East on global growth and inflation, particularly due to rising oil prices resulting from the US/Israel-Iran conflict [9][10][23][27]. Core Insights - **Global Growth and Inflation**: The conflict has led to a rise in oil prices, which could increase inflation and negatively impact global growth. The expectation is that sustained high oil prices may lower global growth by a tenth or two from current forecasts [9][10]. - **Oil Price Impact**: A 10% increase in oil prices is estimated to raise overall inflation by approximately 0.2 percentage points. The euro area, along with countries like Thailand, Korea, and Mexico, is particularly sensitive to these changes due to their high energy weight in consumer price indices [9][12]. - **US Economic Outlook**: The rise in oil prices complicates the Federal Reserve's monetary policy, as it could lead to higher headline inflation, which the Fed typically overlooks in favor of core inflation metrics [12][10]. - **Capex Trends**: There is a notable increase in capital expenditures (capex) driven by AI infrastructure, which is expected to continue growing. This trend may lead to a positive macroeconomic environment for US equities [32][28]. Geopolitical and Commodity Insights - **US/Israel-Iran Conflict**: The conflict has significantly disrupted oil flows through the Strait of Hormuz, with estimates suggesting a reduction of 70-90% in oil and product flows. This disruption could lead to a spike in oil prices, potentially reaching $120 per barrel if conditions worsen [27][25]. - **Commodities Market**: The report highlights the volatility in energy prices, with Brent oil prices forecasted to range between $80-90 in the short term, depending on the conflict's progression [27][24]. Additional Considerations - **High Yield Credit Strategy**: The report notes a widening of bond spreads in the private BDC sector, indicating a potential liquidity stress due to elevated redemption requests driven by risk aversion [33][37]. - **FX Strategy**: A recommendation to short NOKSEK is made, as the Norwegian Krone's performance is closely tied to oil prices, which may underperform in a de-escalation scenario [20][22]. Conclusion - The current geopolitical climate, particularly the US/Israel-Iran conflict, poses significant risks to global economic stability and inflation rates. The capital expenditure trends in AI infrastructure present a potential upside for US equities, while the commodities market remains highly volatile due to these geopolitical tensions.

Summary of Key Points from the Conference Call Industry Overview - The report discusses the impact of geopolitical tensions in the Middle East on global markets, particularly focusing on oil prices and equity markets. Key Highlights 1. **Oil Prices**: Brent crude oil prices crossed $90 per barrel for the first time since April 2024, prompting commodities strategists to raise near-term oil forecasts. Different market scenarios were outlined based on potential disruptions in the Strait of Hormuz [8][13][22]. 2. **KOSPI Performance**: The KOSPI index experienced significant volatility, falling the most since the Global Financial Crisis before rallying by 9.6% on Thursday. Equity strategists maintain a base case target of 6,500 for the KOSPI, expecting recovery unless severe disruptions occur [8][15][22]. 3. **US Treasury Yields**: The 2-year US Treasuries recorded their worst weekly performance since April 2025 due to inflationary fears. Strategists noted that investors are more concerned about upside risks to inflation than downside risks to growth, which could lead to lower UST yields [8][22]. 4. **DXY Performance**: The DXY index had its best week since August 2025, with strategists remaining neutral on the USD for the time being [8][17][22]. Market Sentiment and Positioning - The report includes a Market Sentiment Indicator (MSI) that aggregates survey positioning, volatility, and momentum data to quantify market stress and sentiment. The current sentiment score indicates a mix of negative and positive sentiment across different asset classes [61][62]. ETF Flows - The report tracks daily fund flows across approximately 5,000 ETFs globally, covering around $7 trillion in assets. This data helps analyze cross-asset sentiment and positioning [25][26]. Forecasts and Returns - Morgan Stanley provided forecasts for various asset classes for Q4 2026, including: - S&P 500: Base case return forecast of 5,600 with a bear case of 6,740 and a bull case of 7,800 [10]. - MSCI Emerging Markets: Base case return forecast of 1,500 with a bear case of 1,100 and a bull case of 1,700 [10]. - Brent: Expected returns show a significant potential for recovery, with a bull case of $120 per barrel [10]. Additional Insights - The report highlights the performance of various sectors, noting that materials led losses in global equity sectors while energy showed gains. The US investment-grade bonds tightened by 2 basis points, while high-yield bonds widened by 5 basis points [79]. - The report emphasizes the importance of monitoring geopolitical developments and their potential impact on market dynamics, particularly in the context of oil prices and equity markets [8][22]. This summary encapsulates the critical insights and forecasts from the conference call, providing a comprehensive overview of the current market landscape and future expectations.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Chinese economy, particularly the implications of RMB (Renminbi) appreciation on capital inflows and domestic demand. Core Insights and Arguments 1. **RMB Appreciation and Capital Inflows** - There is a growing belief that steady RMB appreciation could attract capital inflows to support domestic property prices, combat deflation, and stimulate domestic demand. However, the effectiveness of this strategy is questioned due to the current economic environment characterized by weak domestic demand and a significant property market crash since mid-2021 [1][4][5]. 2. **Historical Context of RMB Appreciation** - Prior to 2014, RMB appreciation led to substantial capital inflows, driven by expectations of rising home prices and higher interest rates compared to global counterparts. The RMB appreciated by 34.2% against the USD from July 2005 to January 2014 [19][20]. 3. **Current Economic Challenges** - The environment has drastically changed since 2014, with entrenched expectations of falling home prices, illiquid property markets, and geopolitical tensions. The report argues that even a guided 5% annual appreciation of RMB/USD is impractical given the current economic conditions [4][5][40]. 4. **Impact of Property Market Collapse** - The property market has seen home prices decline by over 35% since their peak in 2021, leading to a significant drop in new home sales. This decline contrasts sharply with rising home prices in developed economies during the same period [32][44]. 5. **Interest Rate Dynamics** - China's interest rates remain low (around 1.8% for 10-year CGBs), while US rates are significantly higher (around 4.1%). This negative interest rate differential discourages capital inflows into China [43][34]. 6. **Direct Investment Trends** - Foreign direct investment (FDI) in China has plummeted from a peak of USD 344 billion in 2021 to USD 76 billion in 2025, while outward direct investment (ODI) has surged, indicating a shift in investment strategies due to geopolitical tensions and limited domestic opportunities [54][55]. Additional Important Insights 1. **Fast Capital Flows (FCF) Definition** - FCF refers to large, sudden surges of foreign funds into or out of an economy, often influenced by investor sentiment and interest rate differentials. The report aims to measure FCF trends over the past two decades [7][8]. 2. **RMB Internationalization Efforts** - Despite depreciation pressures, China is promoting RMB internationalization through initiatives like the Cross-Border Interbank Payment System (CIPS) and expanding bilateral currency swap agreements [35][36]. 3. **Market Sentiment on Home Prices** - Public confidence in home prices is eroding, with only 8.5% of respondents expecting higher prices in the next quarter, the lowest since 2009. This reflects a broader sentiment of caution among investors [48][50]. 4. **Geopolitical Factors** - The ongoing US-China trade war and rising geopolitical tensions have further complicated the investment landscape, leading to reduced exposure to China by foreign investors [31][34]. 5. **Long-term Economic Outlook** - The report suggests that without addressing the underlying issues in the property market and boosting domestic consumption, expectations for RMB appreciation to attract significant capital inflows are overly optimistic [5][40].

Summary of Key Points from the Conference Call Industry Overview - The discussion centers around the impact of geopolitical tensions in the Middle East, particularly related to Iran, and the resulting fluctuations in oil prices on multi-asset portfolios [1][2][3]. Core Insights and Arguments 1. **Scenarios and Oil Price Impact**: - **De-escalation**: Oil prices expected to stabilize at $65-70 per barrel within 1-2 weeks, with risk assets outperforming but volatility remaining high due to potential geopolitical flare-ups [3][18]. - **Ongoing Constraints**: Anticipated oil prices around $90 per barrel, with 80% of tanker flow returning within 1-2 weeks, leading to a temporary inflation push of 30-40 basis points in most economies [3][19]. - **Effective Closure**: If shipping lanes are effectively closed for 4-5 weeks or longer, oil prices could surge to $120-130 per barrel, necessitating demand destruction to rebalance the market [3][28]. 2. **Market Reactions**: - A supply-driven energy shock could lead to persistent inflation concerns, reminiscent of the 2022-2023 period where bond-stock correlations broke down [7][32]. - The preference for US assets remains strong due to their defensive nature and better fundamentals, despite the challenges posed by inflation and growth concerns [7][12]. 3. **Asset Allocation Recommendations**: - In the **De-escalation scenario**: Overweight equities, equal weight government bonds, underweight corporate credit, and underweight cash [14][17]. - In the **Ongoing Constraints scenario**: Overweight equities, underweight government bonds, equal weight corporate credit, and overweight cash [16][17]. - In the **Effective Closure scenario**: Underweight equities, overweight government bonds, equal weight corporate credit, and overweight cash [25]. 4. **Correlation Dynamics**: - The report highlights the potential for equity-bond correlations to break again, particularly if markets continue to price in growth risks alongside higher inflation [26][32]. - Historical data indicates that during periods of geopolitical tension, correlations between asset classes can shift, impacting portfolio performance [26][48]. Additional Important Insights - The report emphasizes the uncertainty surrounding the outcomes of geopolitical events and their implications for market performance, suggesting a need for situational awareness in investment strategies [12][25]. - The analysis includes historical performance data around past geopolitical events, providing context for current market dynamics [48][52]. This summary encapsulates the critical insights and recommendations from the conference call, focusing on the implications of geopolitical tensions on oil prices and multi-asset portfolio strategies.

Summary of Key Points from the Conference Call Industry Overview - The discussion centers around the **AI industry** and its impact on the broader **technology sector** and **credit markets**. The debate on whether AI is merely hype or a transformative technology has shifted towards the latter as of 2026, supported by strong earnings reports from major hyperscalers [2][3]. Core Insights - **AI Investment Surge**: The 4Q earnings reports from large hyperscalers indicate a significant commitment to AI, with projected capital expenditures (capex) for hyperscalers reaching **$740 billion in 2026**, up from **$570 billion** at the beginning of the year. This reflects a growing demand for computing resources that exceeds supply [4][5]. - **Future Capex Dynamics**: Less than **20%** of the forecasted AI investment by **2028** has been spent, indicating substantial future spending. The upcoming phase of investment will increasingly rely on credit markets rather than equity funding due to the scale of required capex [5]. - **Record Bond Issuance**: Investment-grade (IG) bond issuance is expected to reach a record **$2.25 trillion in 2026**, driven by AI-related capex and increased M&A activity. This surge may widen IG spreads but does not signal an end-of-cycle dynamic [6]. Market Reactions - **Disruption Risks**: There is growing anxiety in the markets regarding the disruptive potential of AI, particularly in the software sector, which has already seen a **23% decline** in the S&P Software Index year-to-date, contrasting with a flat performance in the broader S&P 500 [10]. - **Credit Market Impact**: The software sector's struggles are affecting credit markets, especially US leveraged loans and business development companies (BDCs), with software loans down approximately **3.4%** year-to-date [10]. The concentration of rapid expansion in lower-rated, highly leveraged issuers complicates risk assessment in leveraged credit [10]. Future Outlook - **Sector Sentiment**: Weak sentiment in the software sector is expected to persist, with uncertainty about which companies may face existential risks as AI adoption progresses. While defaults remain low currently, a rise in defaults could lead to recoveries below historical averages due to the asset-light nature of many affected companies [11]. Additional Insights - The report emphasizes the importance of understanding the financial health and operational fundamentals of private companies in the software sector, as transparency is often limited [10]. This summary encapsulates the critical points discussed in the conference call, highlighting the transformative potential of AI, the implications for capital markets, and the ongoing challenges faced by the software sector.