We review our Top 10 Surprises for 2026 originally published in December 2025.

Recorded 25 September 2026.

Speakers:

• Tian Yang (CIO at Variant Perception & VPX ETF Fund Manager)

• Hugh Vuillier (Head of Client Relations).

Timestamps:

[02:40] Trump’s capex boom arrives a year late, broadens beyond AI
[06:20] US growth surprises to the upside despite a muted labour market
[9:15] Housing disinflation breaks sticky inflation narratives
[10:20] US 10y yields go nowhere, trading in a tight range around 4%
[21:41] Value equities outperform growth
[24:00] G10 FX divergence: Apac (AUD & NZD) over Europe (EUR & GBP)
[29:55] EM equities outperform DM, led by Brazil
[31:11] Oil trades below $50 and above $75 at some point in the year
[34:47] China tech stocks outperform US tech stocks
[~37:19] Capital cycle: US regional banks & energy services outperform
[41:00] Q&A

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This is a preview from our November Macro Snapshort (Published Nov 2).
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The policy and liquidity components are now rolling over too.

This is a typical late-cycle dynamic: growth and inflation are set to decelerate, policy is turning restrictive, and liquidity is running out of room to expand.

This year’s drop from “very bullish” to neutral has five precedents:

• 2000,

• 2007,

• 2010,

• 2015, and

• 2018.

They are not all the same.

In the 2010s, inflation was consistently low, so central banks pivoted quickly and reflated markets before the downturns built momentum. In 2000 and 2007, by the time policymakers eased, it was too late. Today, headline CPI is 3.7% and the Fed is still hiking.

Cyclically, we recommend investors de-risk towards a more balanced allocation: reduce equities, add fixed income or cash.

Neutral is not yet “risk-off”, but the macro headwinds are building.

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Guns, butter or sound money. You can have two. Not all three.

That's the Sovereign Impossible Trinity, the theme of our latest thematic report.

For years, governments have borrowed to avoid choosing. The Iran war and the AI build-out are now forcing the choice. History says one leg always gives way. During the Korea War, the Fed held the line. During the Vietnam War, sound money broke.

CIO Tian Yang will lead the conversation, sharing VP’s current outlook, our perspective on how we got here, and answering your questions.

We’re hosting an after-hours office hours in NYC Nov 11.

Join us for a drink and discussion of our latest report, The Sovereign Impossible Trinity.

CIO Tian Yang will lead the conversation, sharing VP’s current outlook, our perspective on how we got here, and answering your questions.

Please RSVP to reserve your spot.

https://luma.com/k04rwaui

Hawks vs Buyable Dips

EM/DM Leading Indicator Watch

(Oct 26)

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Global Growth and inflation impulses deteriorate further, both firmly negative

UK Growth resilience forces a rethink. Switch long SFIZ7 into SFIZ6Z7 flattener

Aus: More growth downside risks while inflation risks are known => continue to receive 2y2y

Brazil: Lula’s shock win adds risk premium, history says buy the dip

India: Equity investor capitulation, but food inflation keeps us on the sidelines for now

Asset Allocation Engine

(Nov 2 2026)

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This is a preview from our last October EM/DM Leading Indicator Watch (Published Oct 26).
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In our previous thematic report, When election risks matter for investors, we showed that the high risk premia associated with contentious LatAm elections tend to unwind over the following year after the results, no matter who wins.

Lula’s first win in 2002 is the template: the real collapsed, then rallied strongly through 2003. This is because the feared policy shifts usually prove milder than priced.

Inflation remains moderate, leaving the real policy rate very high at almost 9%.

M1 growth shows no sign of an inflation surge, and past Selic cuts point to falling NPLs.

Of course, the risks are fiscal and institutional.

Expect plenty of headline risks in the coming days and weeks as Flávio Bolsonaro is contesting the result.

We would look to scale into this sell-off to accumulate long-term positions. Brazil still has one of the highest real yields in the world, offering a margin of safety that is not readily available in other asset markets.

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This is a preview from our last October G3 Leading Indicator Watch (Published Oct 6).
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Our US growth leading indicator is still trending sideways at just under 2% annualized.

That is well below GDPNow, which reflects a bifurcated economy.

AI-linked activity is lifting headline growth, while our leading indicator is picking up the drag from rising input costs and yields.

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As we previously noted, the first Fed hike is usually a reaction to economic resilience and rarely leads to recession within 12–18 months.

Instead, it signals a late-cycle environment, with narrowing economic strength and narrowing market breadth.

The latest ISM surveys corroborate this.

New orders remain healthy in both services and manufacturing, but they lag the rise in prices.

That implies slowing real volumes, though not yet a recession.

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Hiking Into Weaker Growth

G3 Leading Indicator Watch
(Oct 6)

Central banks are hiking into weakening growth. Inflation impulse is already negative.

US Growth: Steady outlook. Fed hike signals transition to late-cycle environment

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US Inflation breadth is surprisingly muted, while Iran and El Niño remain tail risks.

China Growth LEI weakens further on domestic demand drag, getting closer to policy pivot.

Slowing Eurozone growth outlook, lagged effect of previous yield rises feeding through

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This is a preview from our last October Macro Snapshot (Published Oct 1).
Find out more here.

Equity breadth is starting to weaken after the Fed’s first hike.

The equal-weighted Value Line Arithmetic index is drawing down from its August high, while the Nasdaq 100 is rallying.

The cumulative advance-decline line has also dropped back to its spring lows, even as the S&P 500 holds near the highs.

That means more stocks are falling than rising, even if the index is up.

In our 2025 report, Lessons for today from the 1929, Nifty Fifty and Dotcom bubbles, we laid out that narrowing leadership alongside monetary tightening is the classic combination seen ahead of generational equity tops.

Today is the first time in this cycle we are seeing both.

We flag again our “Juniper Networks” analog.

In the dot-com era, Cisco peaked in March 2000, but Juniper Networks went on to make its high in October 2000 as the late-stage IPOs soaked up liquidity from previous leaders.

CoreWeave is around half its 2025 high and SpaceX is about 25% below its post-IPO peak.

With Anthropic and OpenAI delaying their IPO dates, there are increasing signs that the public equity market is running out of marginal buyers.

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Lower Margin of Safety - October Macro Snapshot
(Oct 1)

Cyclical Asset Allocation: Macro Risk Indicator rolling over, still “Risk On”, but lower margin of safety.

AI Bubble Watch: Equity breadth weakening, watching the Cisco / Sycamore / Juniper analogs.

History of Fed Hikes: Base case for an equity wobble and flatter curves, no immediate recession.

Inflation: Oil and Iran driving narrative, but inflation breadth is muted.

Fixed Income: Tactical signs of capitulation, need Iran progress to buy the dip.

Thoughts on the US Dollar
(Sep 28)

We introduce a new simplified US dollar regime indicator and our upgraded FX edge models.

Takeaway: USD between crosscurrents, mildly bearish outlook anchored on politics

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Housing headwinds to restrain hawkish pricing -
Sep. EM/DM Leading Indicator Watch

(24 Sep)

Our global diffusion indices show a marginally softer growth outlook and a fading inflation impulse.

We like receiving AUD 2y2y as the lagged effects of previous RBA hikes start to hit the housing market.

We stay long SONIA Dec-27 futures (SFIZ7) as the UK housing market struggles against a hawkish BoE

Sweden is still the positive outlier and we like short CHF vs long SEK.

Within EM, idiosyncratic risks dominate. We are waiting on Brazil’s October elections and India’s deficient monsoon rainfall.

South Africa’s outlook is now stagflation-lite.

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This week's charts and research highlights from Variant Perception.

REVISITING OUR TOP 10 SURPRISES FOR 2026 - WEBINAR

with Tian Yang

Fund Manager of VPX ETF

&

CIO of Variant Perception

—

Sep 24, 2026 03:00 PM (BST)

Register here

Top 10 Surprises for 2026

(Dec 2025)

1. Trump’s capex boom arrives a year late, broadens beyond AI

2. US growth surprises to the upside despite muted labor market

3. Housing disinflation breaks sticky inflation narratives

4. US 10y yields go nowhere, trades in a tight range around 4%

5. Value equities outperform growth

6. G10 FX divergence: Apac (AUD & NZD) over Europe (EUR & GBP).

7. EM equities outperform DM, led by Brazil

8. Oil trades below 50 and above 75 at some point during the year

9. China tech stocks outperform US tech stocks

10. Capital Cycle: US regional banks & energy services outperform

Growth softer, tails wider - Sep. G3 Leading Indicator Watch

(Sep 10)

• Steady US growth outlook with balanced risks. Renewed services PMI strength is the upside surprise to watch. Consumer still weak as real incomes flatten and the savings rate turns up.

• US Core inflation trends remain muted, but Iran and El Niño keep the energy and food tails outside policymakers’ control.

• In a reversal of last month’s improvement, China growth LEI fell. Domestic demand are weak, but not yet near conditions before Oct 2024 policy pivot. We stay long EURCNH.

• Our Eurozone growth LEI gave back last month’s improvement. Energy costs and lagged yield rises bite. Sticky services inflation and abnormally low gas storage keep stagflationary tail risks alive into winter.

  ---

DM

• UK: Growth headwinds + fading inflation impulse => Stay long SONIA Futures (SFIZ7)

• Japan: Impossible trinity still not resolved, expect more JPY policy actions

• Australia: Housing headwinds + negative real wage growth => look to fade rise in 2y yields

• Sweden: Positive outlier as growth LEI remains very strong, retain bullish SEK bias

EM

• Brazil: Growth leading indicators remain resilient, waiting for October elections to pass

• S. Korea: Economy remains K-shaped, as semi boom has yet to trickle down

• India: RBI regime model remains hawkish, El Niño food inflation risks remain

• Indonesia: From extremely hated to less hated, take profits on equity

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This week’s charts and research highlights from Variant Perception.

Chart of the Week

The recent rise in US 10y yield has been driven by the real term premium, rather than inflation or rate expectations.

Politics Trumps Economics - Macro Snapshot

(Sep 2)

• Our Macro Risk Indicator remains “risk-on”. Growth, policy and liquidity overcome an inflation component that has now turned “risk-off”.

• US nominal growth is in line with IG yields. Watch for IG yields above projected nominal growth as a warning sign.

• The inflation scare is driven by energy and food, not underlying core trends. The Dallas Fed trimmed mean PCE is still trending down. Watch for 2s5s10s to turn positive as a warning sign that equities are vulnerable to a drawdown.

• Politics remains the dominant variable in fixed income and FX. Fed-Treasury coordination is capping the long end. USD weaponization fuels the bid for gold.

• Cyclical Asset Allocation: Macro Risk Indicator remains “risk-on”, overcoming inflation headwinds

• Inflation (1): Core inflation trends remain moderate, trimmed mean PCE still falling…

• Inflation (2): …but Iran conflict + El Niño tail risks keep markets on edge

• Fed-Treasury Coordination: Politics caps the long end, but stock-bond correlations to remain positive

• AI Bubble Watch: Equity breadth still good, watching Cisco/Sycamore/Juniper analogs

• Equity: Earnings momentum persists, expectations remain very optimistic

• Sector Allocation: OW: Semis, Energy, Financials, Comm. Serv. UW: Consumer, Software

• Fixed Income: Watch 2s5s10s for signs the Fed is offside, real term premium rise is normalization

• FX: Politics trumps economics as the trend towards USD weaponization continues

• Commodities: Cyclical macro regime moderately weaker, but structural gold bid is unchanged

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Politics trumps economics - Sep. Macro Snapshot

(3 Sep)

Speakers: Tian Yang (CEO & Head of Research) & Hugh Vuillier (Head of Client Relations)

This week's charts and research highlights from Variant Perception.

Chart of the Week

UK growth leading indicators recovered a little this month but still paint growth downside risks.

Benign globally, messy locally - Aug. EM/DM Leading Indicator Watch

(August 26)

• Our global diffusions still point to steady growth and a fading inflation impulse. The calm is visible only in aggregate, as each country varies.

• For DM, UK is the clearest negative growth outlier, so we stay long SONIA Dec-27 futures (SFIZ7).

• We would fade any rise in AUD 2y yields back towards the year’s highs above 4.75%. We are looking to re-establish long JPY after taking profit on our short CHF vs long JPY Aug 3.

• For EM, idiosyncratic risks override good growth LEIs. We take profit on our Indonesian equity long.

  ---

[Video Discussion]

Speakers: Tian Yang (CEO & Head of Research) & Hugh Vuillier (Head of Client Relations)

DM

• UK: Growth headwinds + fading inflation impulse => Stay long SONIA Futures (SFIZ7)

• Japan: Impossible trinity still not resolved, expect more JPY policy actions

• Australia: Housing headwinds + negative real wage growth => look to fade rise in 2y yields

• Sweden: Positive outlier as growth LEI remains very strong, retain bullish SEK bias

EM

• Brazil: Growth leading indicators remain resilient, waiting for October elections to pass

• S. Korea: Economy remains K-shaped, as semi boom has yet to trickle down

• India: RBI regime model remains hawkish, El Niño food inflation risks remain

• Indonesia: From extremely hated to less hated, take profits on equity

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This week’s charts and research highlights from Variant Perception.

Chart of the Week

Aug 1, our Eurozone growth leading indicator recovered.

The VP Bank Quality Score - A Specialized Approach

(August 19)

Standard factor models don’t work well with financial institutions.

Banks are a spread businesses built on levered balance sheets, so assessing quality needs to account for capital adequacy, liability management, and tail-risk avoidance.

With that, we are pleased to present our new Bank Quality Score - a quality framework specialized for global banks.

We score Bank Quality across three pillars

• Balance-sheet management

• Consistency

• Margin of safety

Our backtest show across North America, EAFE, and EM markets that the lowest-quality banks:

• Structurally underperform

• Show higher downside volatility

The framework outperforms during market crisis, when low-quality banks collapse. And it can underperform in the immediate aftermath of crisis, when market rallies can lead to a “dash-for-trash” frenzy.

Over the full cycle, however, high-quality banks tend to come out and compound steadily.

Crowding Score: Popular Stocks Are Bad, Actually

(21 August)

“Nobody goes there anymore. It’s too crowded.”

Yogi Berra was probably talking about a restaurant when he said that, but he could have been describing many of the stocks in the S&P 500. The price goes up, the story gets better, and investors pile in on the comforting idea that a crowd is a hedge.

If only it was so simple.

With two decades of data, we tested what actually happens when real news hits a crowded stock. What we found was that popular stocks gained less on good news and lost more on bad news, than their less-loved peers.

In other words, crowded stocks capture less of the upside even when the news is good.

Popular stocks, it turns out, are inherently fragile.

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This week’s charts and research highlights from Variant Perception.

Chart of the Week

Low customer inventories relative to manufacturer inventories indicate potential for future orders and inventory builds from customers

Benign, for now - Aug. G3 Leading Indicator Watch

(10 August)

• US growth outlook remains steady with manufacturing strength the key tailwind, while the main headwind is the inflation-induced hit to consumer disposable incomes. The labor market is neither recessionary nor inflationary, despite the noisy NFP data.

• Chinese domestic demand remains weak, with both new orders and new export orders dropping last month. We add a long EUR vs short CNH trade idea.

• Our Eurozone growth LEI recovered this month, while inflation risks remain. We now see upside risks for Eurozone nominal growth, while abnormally low levels of natural gas inventories create stagflationary tail risks for the winter

Chinese export surplus remains the most important factor driving global imbalances.

Section Summary

• Global: Growth steady, already past peak inflation impulse

• US Growth: Steady outlook, manufacturing recovery remains strong

• US Labor: Still not inflationary nor recessionary, ignore the NFP noise

• US Consumer: K-shaped consumer drawing down savings as real incomes decline

• US Inflation: Inflation fears overstated, as core inflation trends remain subdued

• China Economy: Domestic demand remains weak as focus remains on exports

• China FX: Long EUR vs short CNH on growth divergence & mean-reversion

• Eurozone Growth: Growth LEI recovers, fiscal impulse remains positive

• Eurozone Inflation: Upside inflation risks remain, low nat gas inventories a tail risk for winter

Benign, for now - Aug. G3 Leading Indicator Watch [Video Discussion]

(11 August)

Speakers:

• Tian Yang (CEO & Head of Research)

• Hugh Vuillier (Head of Client Relations)

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This week's charts and research highlights from Variant Perception.

Chart of the Week

The overall equity market has weathered the July AI equity crash, with the average US stock still trending higher.

Still risk-on - Aug. Macro Snapshot

(3 August)

• Our Macro Risk Indicator remains “risk-on” with G3 growth LEIs rebounding. US earnings estimate revisions are rising again, while low savings rates continue to sustain spending and profits.

• We believe the Situational Awareness stop-out marks a tradeable low in semis and AI. Semis remain capital scarce on our capital cycle models, while their crowding score has now reset to more neutral levels.

• The consensus reaction to the July Fed hold is that Warsh is going to be tested by markets in the coming months, pressuring him into a September hike. We lean against a hike this close to the mid-terms, as we expect core inflation to remain capped.

  ---

Still risk-on - Aug. Macro Snapshot [Video Discussion]

Speakers: Tian Yang (CEO & Head of Research) & Ben Brodeur (Analyst)

Section Summary

• Cyclical Asset Allocation: Macro Risk Indicator remains “risk-on” as growth stays resilient

• AI Bubble Watch: Buy the dip on semis, seeing some LPPL buy signals, market breadth resilient

• G3 Leading Indicators: Growth LEIs rebound, inflation impulse continues to fade

• Policy shifts: Main risk in 2H26 is lagged effect from policy tightening, but we are not there yet

• Inflation: US core inflation to remain capped, STIR markets already priced for inflation upside

• Equity: Earnings estimate revisions rising again, corroborates macro tailwinds

• Sector Allocation: OW: Semis, Energy, Financials, Materials; UW: Consumer, Healthcare

• Fixed Income: Surging real yields offer great value, watch 2s5s10s for signs Fed is offside

• FX: Politics trumps economics: take profit on short CHF vs long JPY

• Commodities: Neutral cyclical outlook, but upside risks for oil remain

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This week's charts and research highlights from Variant Perception.

Chart of the Week

UK LEIs continue to paint a clear picture of growth downside risks, while inflation fears look overstated.

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Into the Breach Once More - EM/DM Leading Indicator Watch [Video Discussion]

(July 24)

Speakers: Tian Yang (CEO & Head of Research) & Hugh Vuillier (Head of Client Relations)

• Our global diffusions continue to paint a picture of muted but stable growth, alongside an inflation impulse that has peaked. While uncertainty surrounds the renewed flare-up in Iran, basic incentives should prevent both sides from overplaying their hands.

• Within DM, we buy the dip in SONIA futures (SFIZ7), hold our short CHFJPY and step away from our bullish AUD bias. We are also waiting to sell the rally on EURSEK.

• Within EM, we close our Brazil risk-parity exposure and stick with Indonesian equities that are rebounding after the flood of LPPL crash exhaustion signals in June. USDKRW is testing its 200-day moving average and could be a tactical long.

This week's charts and research highlights from Variant Perception.

Chart of the Week

Since July 2, we have been observing the significant divergence between our Core and Headline US Inflation LEIs.

What We Got Right and What We Got Wrong (2Q26)
[Video Discussion]

Speakers: Tian Yang (CEO & Head of Research) & Hugh Vuillier (Head of Client Relations)

RIGHT

• “Sell America” reverses

• Long/OW US tech

• Short EURUSD

• Macro Risk Indicator stayed “Risk-On”

• US labor market not inflationary, not recessionary

WRONG

• Stayed moderately bullish gold through drawdown

• Long China Tech

• Mixed results fading hawkish inflation scare pricing

• Manually overriding Macro Risk Indicator in April

Not too hot, Not too cold - July G3 Leading Indicator Watch

[Video Discussion]

Speakers: Tian Yang (CEO & Head of Research) & Hugh Vuillier (Head of Client Relations)

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This week's charts and research highlights from Variant Perception.

Chart of the Week

Stocks with both very high and very low crowding scores show significantly higher forward downside volatility. Investors should aim to stay in the sweet spot for crowding to maximize portfolio resilience.

Thoughts on Quantifying Equity Crowding - July 8

• The basic mechanics of crowding are straightforward: when a stock is widely owned, universally recommended by sell-side analysts, and actively chased by short-term traders, its shareholder base becomes inherently fragile.

• Asymmetry: Crowded stocks suffer from asymmetric returns. They benefit less from good news (which is already priced in) and suffer disproportionately on bad news.

• Risk Management: Crowding is primarily a risk management mechanism rather than a pure alpha generator. Being contrarian for contrarian’s sake is unprofitable. Instead, tracking crowding allows investors to build portfolio resilience and mitigate catastrophic tail-risk around events.

• Portfolio Construction: It is best to avoid stocks at both extremes (very high and very low crowding). While extremely high crowding exposes you to big drawdowns, extremely low crowding often signals structural problems hidden from standard accounting disclosures.

  ---

  ---

[Video Discussion]

Not too hot, not too cold - July G3 LIW

Speakers: Tian Yang (CEO & Head of Research) & Hugh Vuillier (Head of Client Relations)

Not too hot, not too cold - G3 Leading Indicator Watch - July 10

• US growth looks set to remain at trend, while US inflation fears are overstated, as core inflation is capped by subdued housing, the K-shaped consumer and muted activity across small businesses.

• Chinese domestic demand remains weak as the economy remains geared towards exports and sovereign-aligned investment. Repatriation flows are providing a tailwind for the RMB, overcoming the negative carry vs the USD.

• Our eurozone growth LEI is still rolling over, but the pace of deterioration has moderated. The fallout from the Iran conflict has been relatively contained so far, with a notable rebound in the ZEW and Sentix expectation surveys.

US

• Growth: Outlook steady, despite some noise around GDPNow estimates

• Consumer: K-shaped consumer & negative real income growth cap inflation upside

• Labor: Still not inflationary, not recessionary

• Inflation: Subdued core inflation LEI vs surging headline CPI

China

• Economy: Muted growth as domestic demand remains weak

• FX: RMB breadth remains very strong, flow tailwinds still intact

Eurozone

• Growth: Marginal improvement in leading data, growth outlook stabilizing at lower levels

• Inflation: Upside risks to service inflation could force the ECB to maintain hawkish stance

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This week's charts and research highlights from Variant Perception.

Chart of the Week

The Iran-induced inflation impulse will likely be transitory.

Keep vigilant and carry on - Macro Snapshot

• Our Macro Risk Indicator remains “risk-on” with limited impact from Iran so far. The risk-on message is corroborated by a rise in insider buys across global equities.

• SpaceX IPO is reminiscent of the Juniper Networks IPO from 1999 that marked the start of the mania phase of the equity rally. Historically, major market tops are characterized by narrowing market breadth, restrictive monetary policy, and mounting liquidity headwinds. We have NOT reached this inflection point yet.

• The inflationary impulse from the conflict in Iran is expected to be transitory. While energy costs are mechanically pushing headline inflation higher, underlying core pressures across housing, labor, and small businesses remain well anchored.

  ---

[Video Discussion]

Speakers: Tian Yang (CEO & Head of Research) & Hugh Vuillier (Head of Client Relations)

• Cyclical Asset Allocation: Macro Risk Indicator remains “risk-on”, limited impact from Iran

• Equity Market Breadth: Keep an eye on equity breadth as early warning sign in 2H26

• Policy Shifts: Policy tailwinds turning to headwinds, one to watch in 2H26 rather than immediate risk

• Inflation: US core inflation LEI subdued on muted housing and small business activity

• Labor: US labor market still NOT inflationary and NOT recessionary

-

• Equity: Earnings expectations are elevated, seeing some late cycle amber warnings

• Sector Allocation: OW: Semis, Energy, Financials, Healthcare; UW: Consumer, Non-Semi Tech

• Fixed Income: US 10y yield moderately above fair value range of 4-4.25%

• FX: USD rally has room to run, but politics means Liberation Day levels are a ceiling

• Commodities: Neutral cyclical outlook, crack spreads remain large, gold down 25% from highs

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