GeoMacro | Tactical Risks & Opportunities
Near-term geopolitical analysis, focused on the 0-3 month horizon. Publication frequency shaped by urgent global events.
Our top five "Black Swan" risks this year are familiar but all too realistic in the current climate. Investors should stay overweight US equities and EM-ex-China until some hurdles are cleared.
Our clients know that we have been very generous when it comes to analyzing President Trump’s policy choices and negotiating style. In our view, ascribing preferences to the man is a poor analytical framework. President Trump goes into every situation trying to maximize his gains, only adjusting his expectations and preferences as constraints become clear. As such, focus on constraints, not stated preferences. Where does Greenland fit in this paradigm?
Investors should bet against the US seizing Greenland by force and collapsing NATO. But stay tactically defensive anyway.
On Monday – January 19 – BCA Research will hold its View Meeting (open to all clients to view online or as a recording!). This is the gathering of all Chief Strategists to talk about the economy, views, and markets. A veritable Macro Entmoot! Every weekend before a View Meeting, I try to step back and think big picture. In particular, I like to think what will be the defining geomacro issue of the year. And how will it impact the markets.
Japan's new government will continue, but politics and foreign policy have become more competitive.
The year 2026 has started off well, with not even the threat to central bank independence denting the market's enthusiasm. Perhaps our tactical caution is misplaced.
Congress will ultimately limit Trump from acting on his worst impulses, but his efforts to bypass those limits will cause market volatility.
The risk to Iran's regime survival raises the probability of a massive global oil supply shock back to around 40%, where we put it last year.
