Global Risk Indexes (15-02-2025)

Global 98 (+1 ▲)
MENA 98 ( —)
APAC 97 (+1 ▲)
Europe 98 (+1 ▲)
Africa 98 (+1 ▲)
AMERs 98 ( —)
Markets 97 (+1 ▲)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

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

Global Markets in Turmoil: Trade War Escalates, Gold Surges, and Energy Markets Recalibrate

As global markets attempt to digest worsening trade wars, energy market volatility, and financial turbulence, the economic landscape is becoming increasingly unstable. The U.S.-China conflict, escalating tensions in Africa, and shifting monetary policies are driving heightened uncertainty across all asset classes. Key players are reassessing trade strategies, while investors hedge against growing geopolitical and economic fragmentation.

Trade War Escalates: U.S.-China Retaliation Deepens Global Supply Chain Risks

The trade war between the U.S. and China has reached a new stage of hostility. After Trump's tariff threats, Beijing retaliated with up to 15% duties on U.S. imports, further fueling concerns of decoupling. The yuan has weakened slightly, while the U.S. dollar remains under pressure amid expectations of a protracted dispute.

Markets are now pricing in a prolonged period of trade uncertainty, with companies scrambling to secure alternative supply lines. This is already leading to deflationary pressures in China, as exporters flood global markets with surplus goods, while inflation risks grow in the U.S. due to higher import costs.

Financial Markets Respond: Gold Surges, Dollar Weakens

With trade war fears mounting, investors are moving aggressively into gold, pushing prices above $3,000 per ounce. This reflects both a shift away from dollar-denominated assets and rising demand for safe-haven investments. Central banks are also increasing their gold reserves, further supporting prices.

The U.S. dollar has weakened to its lowest level in two months, as traders digest mixed inflation data and the Federal Reserve's shifting stance. The euro, on the other hand, has strengthened amid optimism over potential Ukraine-Russia peace talks.

Energy Markets: Geopolitical Realignments and Supply Chain Disruptions

The global energy market is undergoing significant shifts. U.S. sanctions on Russian oil are forcing China and India to diversify their crude supply sources, creating volatility in the global oil trade. Meanwhile, Mongolia and China's agreement to build a new cross-border railway will boost Beijing's access to coal, reducing reliance on Australian and U.S. supplies.

In Latin America, Brazil's ethanol sector is in crisis, as U.S. tariffs create uncertainty for producers like Raizen. The country's sugarcane industry is struggling with lower yields and reduced export demand, adding to economic pressures.

Central Banks and Interest Rates: A Diverging Global Landscape

Major central banks remain divided on their policy trajectories. While the European Central Bank and Bank of England are signaling rate cuts, the U.S. Federal Reserve is holding firm as inflation remains a concern. In contrast, emerging market economies, such as Brazil and Indonesia, are balancing growth risks with inflationary pressures.

As interest rate differentials widen, currency markets are reacting accordingly. The Brazilian real has gained nearly 8% year-to-date, while the Japanese yen has strengthened on expectations of tighter monetary policy.

Looking Ahead: Economic Fragmentation and Market Volatility

Global markets are entering a new period of uncertainty, with trade war escalations, currency fluctuations, and supply chain realignments shaping the economic landscape. Investors and businesses must prepare for continued volatility, as the world shifts toward a more fragmented and protectionist trading environment.

Geopolitical Risk Assessment for the Global Markets
(15-02-2025)

The global economy remains on edge as trade wars intensify, financial markets brace for volatility, and energy disruptions create supply uncertainties. The U.S.-China conflict is deepening, impacting global trade flows, while currency and commodity markets respond to shifting geopolitical alliances. Investors are seeking safety in gold amid ongoing instability, while interest rate divergence continues to reshape financial markets. Short-term risks remain elevated as geopolitical fractures drive inflationary pressures, while long-term trends point toward economic fragmentation and supply chain realignments.

Geopolitical Risk Index

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

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