Global Risk Indexes (07-03-2025)

Global 97 (0 —)
MENA 99 ( —)
APAC 97 ( —)
Europe 98 ( —)
Africa 96 (+1 ▲)
AMERs 96 ( —)
Markets 98 ( —)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

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

Escalating U.S.-China Tensions, Oil Market Instability, and Diverging Monetary Policies Create Uncertainty

Trade War Pressures Increase as U.S.-China Tensions Escalate

The ongoing trade war between the United States and China is intensifying, with new tariffs and economic measures further destabilizing global supply chains. The Trump administration has announced additional tariffs on Chinese technology and industrial goods, increasing costs for manufacturers and further straining U.S.-China relations. In response, Beijing has expanded its export restrictions on key minerals essential to the semiconductor and energy industries, heightening global supply chain risks.

These measures are expected to have widespread effects on global trade, particularly impacting U.S., European, and Japanese manufacturing sectors that rely on Chinese raw materials and intermediate goods.

Energy Markets Struggle with Supply Disruptions and Price Volatility

The oil market remains highly volatile, with Brent crude trading at $74.45 per barrel as global supply disruptions continue. The U.S. has intensified its enforcement of sanctions on Russian and Iranian oil exports, significantly tightening supply availability. Meanwhile, production adjustments by OPEC members are adding further uncertainty to market conditions.

China and India, the two largest importers of Russian crude, are now facing difficulties in securing alternative energy sources, leading to a rise in crude premiums. This dynamic is putting upward pressure on fuel prices, especially in emerging markets that are already struggling with inflationary pressures.

Gold Surges as Investors Seek Safe Havens

Gold prices have climbed to $2,923 per ounce, reflecting increased investor demand for safe-haven assets amid financial uncertainty. The strengthening U.S. dollar and rising geopolitical risks have pushed investors away from equities, further boosting gold’s appeal.

At the same time, emerging market currencies are under continued pressure, with the South Korean won and Indian rupee experiencing declines as capital outflows increase due to global risk aversion.

Diverging Global Monetary Policies Create Market Instability

The divergence in global monetary policies is adding complexity to financial markets. The U.S. Federal Reserve has maintained a cautious approach, signaling that further interest rate cuts are unlikely in the near term. Meanwhile, central banks in South Korea and Australia have begun easing policies to counteract slowing growth.

These conflicting policy decisions are creating volatility in currency markets, leading to increased uncertainty in global capital flows.

Strategic Implications: A More Fragmented Global Economy

The global economy is shifting further away from market-driven globalization and into a structure dictated by national security concerns and economic competition. With supply chains, energy markets, and financial flows increasingly disrupted by geopolitical decisions, businesses and investors must focus on resilience, diversification, and risk mitigation strategies in the months ahead.

Geopolitical Risk Assessment for the Global Markets
(07-03-2025)

Geopolitical instability continues to drive global economic uncertainty, with trade disputes, energy supply constraints, and financial market volatility escalating. The U.S.-China economic confrontation is worsening as new tariffs and financial restrictions increase pressure on global supply chains. Simultaneously, oil markets remain volatile due to ongoing disruptions in Russia and the Middle East, while global interest rate policies diverge, adding further strain to financial markets. Investors and policymakers should prepare for heightened market instability in the coming months.

Geopolitical Risk Index

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

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