Global Risk Indexes (11-01-2025)

Global 95 (-1 ▼)
MENA 99 ( —)
APAC 97 ( —)
Europe 97 (-2 ▼)
Africa 86 (-3 ▼)
AMERs 98 ( —)
Markets 94 (-1 ▼)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

Navigating Global Intersections: Where Trade, Finance, Energy and Geopolitics Converge

Trade Realignments, Inflationary Pressures, and Energy Tensions Reshape Global Economic Strategies

Global markets remain highly sensitive to fiscal and monetary shifts, with bond yield volatility dominating sentiment. U.S. Treasury yields held near multi-year highs, reflecting investor unease about inflationary pressures amidst the anticipation of President-elect Trump's fiscal policies. The global bond selloff extended to UK gilts and European bonds, exacerbating borrowing costs and tightening financial conditions.

Currency markets revealed divergent trends. The British pound continued its slide amidst fiscal concerns, underscoring deep-seated economic vulnerabilities. Emerging market currencies, including the Brazilian real and South African rand, faced pressure from a strong dollar, which tightened global liquidity. Canada's robust employment data and reduced rate cut expectations supported its currency, highlighting regional resilience despite external shocks.

Energy markets remained a critical focal point. Saudi Arabia and Algeria's LPG price cuts contrast with Brent crude's resilience, which hovers around $77.61 per barrel due to supply concerns and robust seasonal demand. The UAE's ongoing investments in AI and energy infrastructure, alongside Iraq's TotalEnergies project, underscore efforts to diversify revenue streams amidst global energy disruptions caused by sanctions on Russia and Iran.

Corporate and fiscal trends highlight strategic recalibrations. DAMAC's $20 billion data center investment in the U.S. reflects Gulf investors' pivot toward tech and AI as they navigate long-term diversification strategies. Meanwhile, Canada's labor market strength reduces pressure for aggressive monetary easing, showcasing a measured approach to fiscal challenges compared to the UK's fiscal and monetary policy struggles.

Trade developments underscore shifting alignments. Mexico's efforts to avoid U.S. tariffs, particularly on migration-linked disputes, highlight its strategic maneuvering to protect its trade-dependent economy amidst U.S. protectionist policies. Concurrently, Brazil's inflation control efforts demonstrate the trade-offs between domestic price stability and maintaining growth amidst external volatility.

Geopolitical tensions influence economic stability. Russia's Arctic oil expansion and Biden's sanctions raise long-term risks for energy supply chains, while Ukraine's drone attacks on Russian regions highlight the persistence of geopolitical risks impacting European markets. China's deflationary trends and the PBOC's aggressive monetary easing underscore the challenges of maintaining domestic stability while managing global trade shifts.

The interplay between fiscal imbalances, energy security, and geopolitical tensions demands coordinated responses to stabilize markets and mitigate risks. As nations recalibrate strategies to adapt to these challenges, the global economic order faces a critical test of resilience and adaptability.

Geopolitical Risk Assessment for the Global Markets
(11-01-2025)

Global economic conditions are fraught with inflationary pressures, energy disruptions, and trade realignments. Divergent fiscal and monetary strategies among regions amplify systemic risks, while escalating geopolitical tensions further complicate coordinated responses to emerging crises.

Geopolitical Risk Index

Developments to Follow for the Global Markets (See All Global)

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