Global Risk Indexes (01-03-2025)

Global 98 (-1 ▼)
MENA 99 ( —)
APAC 98 ( —)
Europe 99 ( —)
Africa 96 (-2 ▼)
AMERs 98 ( —)
Markets 99 ( —)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

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

Global Economic Order Fractures Further: Trade Wars, Energy Shocks, and Financial Market Volatility Accelerate Realignments

The global economy is facing increasing uncertainty as trade disputes, energy crises, and financial instability reinforce economic nationalism and strategic competition. With the U.S.-China confrontation escalating, supply chain disruptions widening, and commodity markets under pressure, the era of economic globalization continues to unravel.

U.S.-China Trade War Intensifies: Supply Chains and Financial Markets Feel the Impact

The Trump administration has announced expanded semiconductor and AI export controls targeting China, reinforcing the economic and technological decoupling between Washington and Beijing. In response, China has escalated restrictions on rare earth mineral exports, creating further disruptions in Western manufacturing sectors reliant on these critical resources.

Simultaneously, the U.S. has sanctioned additional Chinese financial institutions for alleged cooperation with Russia, deepening the divide between Western and Chinese economic ecosystems. As a result, global corporations are being forced to rapidly adjust their supply chains, with many accelerating shifts to Southeast Asia, India, and Latin America to mitigate exposure.

Financial markets are reacting sharply. The Chinese yuan has weakened further, while Wall Street has seen increased volatility as investors gauge the risks of prolonged trade disruptions. Meanwhile, the U.S. Treasury Department has hinted at potential currency interventions to counteract excessive dollar strength.

Energy Market Volatility: Middle East Disruptions and European Instability

The energy sector remains highly unstable, with Brent crude prices reaching $91 per barrel amid new geopolitical shocks. The latest U.S. sanctions on Iran’s oil sector have disrupted Asian energy markets, with China and India seeking alternative sources to maintain supply security.

Meanwhile, the Ukraine conflict continues to impact European energy security. Recent Ukrainian strikes on Russian-controlled refineries have reduced fuel production, forcing Russia to implement countermeasures that further tighten global oil supply.

Adding to the uncertainty, Saudi Arabia has signaled potential OPEC production cuts to support higher oil prices, leading to increased inflation concerns in major energy-importing nations.

Financial Markets in Flux: Gold Surges as Investors Seek Stability

Global financial markets are experiencing heightened volatility as geopolitical risks mount. Gold has surged to $3,300 per ounce, marking another record high as investors hedge against inflation, currency instability, and trade disruptions.

Meanwhile, the U.S. dollar has continued to strengthen, creating additional pressure on emerging market currencies, including the Brazilian real and Indian rupee. The rapid capital outflows from these markets signal growing investor uncertainty about economic stability in key developing economies.

Looking Ahead: A Structural Shift in Global Trade and Investment

The global economy is no longer defined by open markets and free trade but rather by strategic economic realignments driven by national security priorities. Trade barriers, resource nationalism, and financial market interventions are becoming the new normal.

For businesses, investors, and policymakers, the ability to navigate geopolitical risks, diversify supply chains, and hedge against financial market instability will be critical in the months ahead. The global economy is undergoing a fundamental restructuring—one that will define the future of trade, finance, and energy security for years to come.

Geopolitical Risk Assessment for the Global Markets
(01-03-2025)

The global economy is entering an intensified period of fragmentation as geopolitical rivalries redefine trade flows, energy security, and financial markets. The U.S.-China economic confrontation has escalated, with new trade restrictions and technology barriers forcing companies to restructure supply chains. Simultaneously, Middle East energy disruptions and heightened military tensions in Eastern Europe continue to fuel market volatility. Financial markets are in a state of flux, with the U.S. dollar strengthening against most emerging market currencies and gold reaching new record highs as investors seek safe-haven assets. The world is no longer operating under a rules-based economic order but rather an era where national security interests drive trade, investment, and industrial policy. The coming months will see further decoupling, inflationary pressures, and a restructuring of global financial flows.

Geopolitical Risk Index

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

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