Work-from-home fertility: higher fertility linked to flexible work
The CEPR analysis finds that work-from-home arrangements correlate with higher realised, planned and lifetime fertility across 38 countries and the US, with meaningful gains when both partners work from home at least one day per week.
Across 38 countries and the United States, data show that realised fertility, fertility plans and lifetime fertility rise with household work-from-home (WFH) arrangements. When both partners WFH at least one day per week, lifetime fertility climbs by about 14 percent compared with households with neither partner WFH. The study also identifies a 7.3 percent rise in one-year fertility when own-occupation WFH shares move by one standard deviation, underscoring a potential causal channel through which flexibility reduces the frictions of balancing family and work.
Three plausible mechanisms are proposed. A direct causal story suggests that easier reconciliation of child care with paid work increases desired family size. A selection story posits that families inclined to have more children sort intoW FH-friendly jobs; a combined selection-causal story argues that the availability of flexible work expands opportunities for parents, thereby lifting fertility. The analysis also shows that the effects vary with country context, depending on how widespread WFH is already and how occupations with high WFH potential are distributed across the income spectrum.
The implications are significant for policymakers in high-income economies confronting low fertility. If flexible working arrangements can meaningfully support family formation, governments may wish to consider policies that broaden access to hybrid and remote work, while recognising distributional patterns that concentrate WFH opportunities among higher-educated and higher-earning workers. The authors caution that fertility outcomes depend on a broader constellation of factors, including childcare costs, housing and economic uncertainty, and social norms.
Methodological notes emphasise careful interpretation. The analysis triangulates micro survey data with occupation-level WFH shares, both before and after the pandemic period, and controls for age, education, marital status, existing children and fixed effects. While the results are robust to a range of specifications, causality remains conditional on the quality of measurement and cross-country comparability.
The findings invite policymakers to rethink the margins of family policy beyond traditional tools. If a substantial chunk of fertility responses is tied to how work is organised, governments may need to complement conventional support with flexible-work design, taking care to mitigate potential inequalities in access to WFH opportunities.
Subsidising the supply chain: how Chinas industrial policy shapes export competitiveness
New research shows that direct subsidies raise export probability and value, while upstream subsidy exposure fuels downstream export volumes and higher product quality, creating multiplier effects through production networks.
Industrial subsidies in China have surged in recent years, and new evidence traces how subsidies passed through input suppliers can lift downstream export performance. The study finds that a one standard deviation increase in direct subsidies raises the probability of exporting by about 0.9 percent and export value by roughly 10 percent at the firm level. Indirect subsidies, transmitted through first-tier upstream suppliers, also lift downstream export participation and export volume, albeit with smaller magnitudes than direct subsidies.
Crucially, the analysis notes that subsidies do not merely enable price dumping. Using product-quality measures, it finds that both direct and upstream subsidies are associated with higher quality, and that prices do not systematically decline as a result of subsidy exposure. Quality-adjusted prices may even fall, reflecting improved competitiveness that is not simply price-based. The mechanisms point to two channels: subsidies boosting firm-level R&D and the use of higher-quality inputs, and upstream subsidies improving the availability and quality of domestic intermediate inputs.
The policy implications are nuanced. Value-chain considerations are essential for assessing the true reach of industrial policy; evaluating subsidies solely by recipient firms risks underestimating their systemic effects. Spillovers complicate trade remedies, as distortions propagate through networks rather than to a single firm or product. The evidence supports a view that national subsidy strategies can shape global trade patterns through production networks, not just end-market support.
The analysis draws on multiple data sources, including the ASIF firm-year dataset, detailed Chinese customs data, and inter-provincial input-output tables. It explicitly measures upstream subsidy exposure to capture multiplier effects across the supply chain. The authors caution that broader interpretation should account for selection biases and the distinctive features of China’s policy environment, but the results nonetheless underscore how subsidies can propagate through networks to bolster export performance and product quality.
From a policy perspective, the findings add texture to the ongoing debate about subsidies and strategic competition. In an era of renewed industrial activism, downstream exporters may gain from subsidised inputs, while remedies must consider the full chain of influence rather than isolated subsidies. The work invites further research into how these dynamics play out in other large economies and across different product categories.
Safe-haven playbook in 2026: gold, bonds, currencies and cash
Fund managers describe a diversified risk-off toolkit for a volatile 2025-26 environment, with gold as a strategic hedge and a portion of portfolios held in cash and defensive assets.
In a year of heightened geopolitical and macro uncertainty, investors are deploying a diversified set of safe-haven instruments. Gold remains a central pillar, buoyed by central-bank demand even as prices have dipped from earlier peaks. Yields on bonds and cautious currency exposure provide diversification and balance against equity risk, while cash positions serve as a defensive buffer in moments of liquidity stress.
The portfolio stance varies by manager, but typical allocations include around 10 percent of assets in safe-haven instruments, with substantial attention to the dynamics of central-bank balance sheets and inflation expectations. Gold prices have experienced volatility, reflecting the tug-of-war between safe-haven demand and risk-on phases tied to policy expectations. The broader message is that a resilient risk-off framework in 2026 will require a mix of bullion, high-quality fixed income, defensive currencies and readily accessible cash.
Drivers behind this caution include evolving inflation trajectories, central-bank policy signals, and the risk of geopolitical shocks that can disrupt energy and commodity markets. Observers emphasise the need to monitor gold price movements, sovereign yields, and the performance of major currencies, as changes in these levers can presage regime shifts or rotations across asset classes.
For investors, the takeaway is pragmatic: while no single asset protects against all scenarios, a balanced mix of gold, bonds, currencies and cash can cushion portfolios against a spectrum of shocks. Ongoing observation of central-bank demand, currency flows and energy price dynamics will be key to confirming shifts in the risk environment and the need for reallocation.
Market participants also note that the role of gold as a hedge has evolved amid broader financial-market architecture changes. If central banks accumulate more gold reserves as a strategic asset, this could reinforce its role as a stabilising force in times of stress. Yet price dispersion and liquidity conditions mean that tactical positioning remains important, with timing and scale differing across fund styles and risk tolerances.
Observers stress that the effectiveness of a safe-haven toolkit depends on the speed of information and the responsiveness of portfolios. Real-time data on price ratios, yield curves and foreign exchange movements will be critical to identifying when a regime shift occurs. In the near term, the emphasis will be on monitoring liquidity, policy guidance and cross-asset correlations to detect early signs of a risk-off tilt.
AI-driven grid expansion: the grid revolution and its winners
Artificial intelligence is accelerating grid expansion, centralising demand in data centres and boosting storage needs; Prysmian and CATL emerge as key enablers of a reliable future grid.
The energy transition is increasingly tethered to the ability to move power efficiently and securely in a digitalised system. AI-enabled electrification concentrates new demand in data centre connections and storage, with UK data centres pursuing around 50 GW of connection capacity across roughly 140 projects. This dynamic raises the stakes for cable manufacturers and storage technology providers, positioning Prysmian and CATL as pivotal players in the grid’s evolution toward higher capacity and reliability.
The observed bottlenecks centre on interconnection queues, project approvals, and the timely scaling of storage assets to balance intermittent generation. As AI-driven load growth unfolds, the demand for high-capacity cables and advanced storage solutions is set to rise, influencing vendor selection, procurement cycles and capital expenditure plans. The watchpoints include interconnection queue progress, project approvals, and the trajectory of CATL’s storage shipments toward 2030 projections.
Industry stakeholders emphasise the need for coordinated policy and planning to de-risk investment cycles. Grid operators and manufacturers will need to align on standards, permitting regimes and permitting timelines to prevent project delays from translating into higher consumer prices or reliability gaps. The near term will hinge on commissioning milestones for key cables and storage assets, as well as the ability of the sector to mobilise financing for large-scale transmission and storage deployments.
Analysts flag potential winners and losers among equipment suppliers and chemical suppliers tied to storage chemistry and power cables. If AI-driven demand materialises as expected, the market could see shifts in supplier footprints, regionally concentrated capacity and increased competition for critical components. The broader implication is a more dynamic grid landscape where technology, policy and finance converge to accelerate electrification while testing the resilience of existing networks.
TSMC dominates EM index; managers navigate benchmark constraints
TSMC accounts for a meaningful share of global benchmarks, constraining active management and heightening AI-chips cycle risk amid geopolitical frictions around Taiwan.
Within the MSCI Emerging Markets index, TSMC represents about 13.4 percent of the constituent weight, and roughly 1.6 percent of the global index. Managers say benchmark concentration complicates portfolio construction, nudging some to underweight the stock despite its central role in the AI supply chain. The push and pull between benchmark tracking and active risk management is shaping allocation decisions across emerging markets funds.
Portfolio teams monitor profitability and capex plans at TSMC, as well as broader supply-chain diversification initiatives across the US and allied economies. The pace of CHIPS Act investments, including new US manufacturing footprints such as Arizona, figures into expectations about supplier diversification and the stability of AI-driven growth themes. The near-term signal for portfolios is to weigh the trade-off between index exposure and the potential for cyclicality tied to semiconductor demand.
Geopolitical tensions around Taiwan remain a persistent theme, informing risk premia and hedging strategies. Investors will watch how corporate strategies, export controls and government incentives influence the competitive landscape for semiconductors and related components. In this context, TSMC’s performance and capital expenditure decisions will continue to be a barometer for AI-related demand and global growth expectations.
The implications extend beyond fund management to policy and market structure. If benchmark-constrained exposures push funds toward less liquid or more volatile segments, systemic risks could emerge in stressed markets. Conversely, adequate diversification and clear policy signals may reduce abrupt reweighting during periods of geopolitical tension.
Oil prices slip as ceasefire hopes ease risk
Oil prices retrace on ceasefire optimism, with WTI around 87.51 dollars and Brent near 98 dollars as inventory data and diplomacy shape near-term dynamics.
The oil complex has experienced a downdraft, punctuated by a softer tone on signs of potential diplomatic de-escalation and an API inventory build. The price move reflects shifting perceptions of risk and the role of traditional supply-demand fundamentals in a period of heightened geopolitical sensitivity. Traders are watching for supply signals from inventories, as well as any new frameworks for a ceasefire and the potential easing of regional tensions.
The price slide comes amid a volatile backdrop in which headlines can quickly reprice risk. Market watchers stress that the dynamic between diplomacy, ship traffic through chokepoints, and actual physical flows remains delicate. The near-term focus includes API numbers, diplomacy developments around Iran and Hormuz, and the possible repricing of risk premiums in energy markets.
Analysts emphasise that while prices have softened, the underlying risk environment has not dissipated. Weaker prices may prompt refiners to reassess margins and output as geopolitical risk lingers. Any renewed escalation or a clarified ceasefire could pivot prices quickly, underscoring the fragility of current energy pricing structures.
In the background, broader energy-market signals-such as OPEC responses and regional production decisions-may still drive volatility. Traders remain attentive to the balance between inventory data, supply assurances and the potential for fresh disruptions to shipping or refinery operations. The market’s sensitivity to regional tensions suggests that price moves could reverse rapidly if diplomatic signals shift.
Indonesia cobalt output ramps to 59,800 tonnes by 2035
Indonesia’s cobalt output is forecast to rise 21.2 percent year-on-year to 59,800 tonnes in 2026, supported by ramp-ups at Pomalaa and Morowali HPAL facilities and Huafei projects.
Indonesia continues to reshape the cobalt landscape, with rising output underpinning supply expectations for electric vehicle batteries and critical minerals chains. The expansion reflects a combination of domestic investments and capacity upgrades across HPAL facilities, enabling higher efficiency in cobalt processing and feedstock supply. The trajectory is part of a broader national push to secure strategic minerals for downstream battery supply chains and EV manufacturing.
The growth supports global expectations for steadier cobalt flows as demand for high-performance cathode materials grows. Observers note that regulatory developments and permitting timelines, as well as the pace of HPAL capacity, will be decisive for how quickly incremental supply translates into market outcomes. As supply expands, price dynamics will hinge on the balance between new capacity and competition from other cobalt producers.
Investors and industry participants are watching for project ramp-ups, regulatory updates and the operational performance of HPAL plants. The near-term signal is closely tied to the timing and scale of Huafei’s developments and any corresponding shifts in upstream feedstock availability. If ramp-ups deliver as planned, cobalt prices could stabilise further, supporting downstream battery metal markets.
Geopolitical factors and trade dynamics also shape cobalt’s outlook. As Indonesia reinforces its position in the global supply chain, policy developments and bilateral relations with major battery producers will influence the metal’s price path and availability. Market participants anticipate continued scrutiny of environmental and social governance aspects of cobalt mining and refining as production scales.
Australia-EU trade pact strengthens Western critical minerals supply chains
Australia and the EU have agreed a trade pact eliminating more than 99 percent of tariffs on Australian critical minerals, signaling deeper integration and investment in battery inputs.
The agreement is expected to unlock roughly A$10 billion in broader economic gains annually and identifies 78 investment-ready projects. The pact reinforces Western supply chains for critical minerals, potentially shifting investment patterns and developing a more resilient ecosystem for the battery materials pipeline. The deal aligns with broader strategic aims to reduce reliance on single-country supply sources and accelerate the deployment of critical minerals across economies.
Policymakers emphasise that ratification processes will determine the speed with which investment flows translate into real projects. The arrangement highlights opportunities for project financing, infrastructure upgrades, and supplier diversification across downstream manufacturers in Europe and Australia. Industry players anticipate a wave of new ventures and partnerships tied to the pact, with potential implications for project timelines and capacity expansion.
Analysts note that the agreement may reshape competition among miners, refiners and battery producers by clarifying tariff landscapes and reducing trade frictions. The implications include improved cost structures for buyers of Australian minerals and greater visibility for project developers seeking cross-border funding. Observers will monitor the pact’s progression through domestic approvals and any consequential investments or policy adjustments to capitalise on the agreement.
The broader strategic context involves aligning with regionalised approaches to security of supply and industrial policy. As Western governments prioritise critical minerals, trade agreements like this one could influence the pace of mining projects, infrastructure investment and the development of integrated supply chains for battery materials.