Back in November, HSBC’s head of Asia equity strategy, Herald van der Linde, held a sanguine view on where Asia’s economies were headed in 2026. In a report titled, The year ahead in 2026, van der Linde and his HSBC colleagues, Prerna Garg, Adam Qi and Varun Pai were overweight on mainland China, Hong Kong, India and Indonesia, neutral on Malaysia and the Philippines, and underweight on Japan, Korea, Singapore, Taiwan, Thailand and Vietnam.
We are just a quarter into 2026 and the economic landscape is wildly different from where it was at the start of the year. Earlier, analysts and market watchers were relieved that President Donald Trump’s “Liberation Day” tariffs did not prove to be as calamitous as expected. Further rate cuts were pencilled in and a resurgent Asia felt like near certainty.
No one had war, an energy crisis, or inflation on their bingo card, and yet all of those have already happened. It would be an understatement to say that the joint US-Israel military strike on Iran has upended the global economy as we know it. Now, instead of rate cuts, investors and economists are weighing between zero cuts or even rate hikes.
