Good morning. Greetings from Aberdeen, Scotland, where we’re enjoying a whopping 6 ½ hours of daylight today….

Two headlines from Europe are worth tracking as a taster of what things will look like in 2025.

In France, Prime Minister François Bayrou selected Eric Lombard as finance minister, tasked with finding a budget to satisfy all parties in a divided French parliament. Budget concerns were the stated reason for France’s opposition parties bringing down the previous government, so finding an acceptable solution is key for France’s stability, but the view is that Bayrou / Lombard will not significantly differ from the previous government. [SOURCE - Financial Times]

Note - the French opposition, particularly Marine le Pen, is keen to oust President Macron irrespective of whatever budget is proposed, indicating that France still faces a turbulent 2025.

Despite significant confusion over the attacker’s motivation for last week’s Christmas market attack in Margedurg, Germany, the far-right Alternative for Germany (AfD) party and other nationalist groups are stoking and capitalizing on the resultant anti-immigration sentiment. [SOURCE - BBC]

The AfD will enter 2025 in a strong position in the upcoming Federal elections in Germany despite the concerns over their hard-right policies. These and other far-right parties in Europe are also seeing significant support from Elon Musk, which might benefit them financially and through his support on X. [See NBC for more.]

On to the numbers.

Key Metrics

WTI is $71.03 (Down)

Low |---- < ---------------| High

Wheat is $185.735 (Down)

Low |------ < -------------| High

EuroDollar is $1.04 (Down)

Low | < -------------------| High

YuanDollar is $0.14 (Unchanged)

Low |----------<>---------| High

Graphs are illustrative to show comparative price over last 180 days

Metrics via AlphaVantage updated Dec 24 2024 08:18 UTC

Americas Stability Ratings and News Summary

More Unstable

🇦🇷 Argentina, 🇧🇿 Belize, 🇧🇷 Brazil, 🇨🇦 Canada, 🇨🇴 Colombia, 🇨🇺 Cuba, 🇩🇲 Dominica, 🇩🇴 Dominican Republic, 🇪🇨 Ecuador, 🇸🇻 El Salvador, 🇬🇩 Grenada, 🇬🇹 Guatemala, 🇬🇾 Guyana, 🇭🇹 Haiti, 🇭🇳 Honduras, 🇯🇲 Jamaica, 🇲🇽 Mexico, 🇳🇮 Nicaragua, 🇵🇦 Panama, 🇵🇾 Paraguay, 🇵🇪 Peru, 🇱🇨 Saint Lucia, 🇸🇷 Suriname, 🇹🇹 Trinidad and Tobago, 🇺🇸 United States Of America, 🇻🇪 Venezuela

More Stable

No countries were more stable over this period

Unchanged

🇦🇬 Antigua and Barbuda, 🇧🇧 Barbados, 🇧🇴 Bolivia, 🇨🇱 Chile, 🇨🇷 Costa Rica, 🇰🇳 Saint Kitts and Nevis, 🇻🇨 Saint Vincent and the Grenadines, 🇧🇸 The Bahamas, 🇺🇾 Uruguay

Regional News Summary

Brazil's economic landscape is increasingly fraught with uncertainty as investors express concerns over fiscal sustainability. The Brazilian currency has faced significant pressure, with experts warning that a currency rout could worsen unless President Lula da Silva implements crucial fiscal reforms. The Economist Intelligence Unit forecasts a continued rise in the Selic rate, further complicating the economic outlook. This climate has diminished Brazil's investment appeal, leading to a more risk-averse business environment. The US dollar has surged in value against the Brazilian real, reflecting the prevailing fiscal uncertainty in the country [SOURCE - Financial Times].

In response to these challenges, President Lula has proposed a series of fiscal reforms, but these initiatives have met resistance in Congress. Recently, Congress passed a constitutional amendment aimed at spending cuts, yet skepticism remains among investors regarding the effectiveness of these measures [SOURCE - Mercopress]. Additionally, Brazil's trade relationships are under strain, with a controversial trade deal with the European Union and potential US tariffs on Brazilian exports threatening to exacerbate economic woes [SOURCE - CNBC].

Despite these economic hurdles, Brazil is pursuing significant infrastructure projects, including a blockchain train initiative and a new carbon market aimed at reducing emissions by 15% [SOURCE - Rio Times Online]. However, the country has also faced criticism for its handling of economic matters, including the arrest of a high-ranking military official linked to a coup attempt earlier this year [SOURCE - World Socialist Web Site].

Meanwhile, a trade dispute panel has ruled in favor of the US regarding Mexico's restrictions on genetically modified corn, a decision that could have significant implications for agricultural trade between the two nations [SOURCE - Jurist]. In a related effort, Mexico has initiated a crackdown on illegal Chinese products to protect local businesses and consumers [SOURCE - The Yucatan Times].

As the economic landscape shifts, the Bank of Mexico has cut its benchmark interest rate to stimulate growth, while the stock market has seen declines amid concerns over economic stability [SOURCE - Mexico Daily News]. In the automotive sector, Stellantis is preparing for significant investments in Mexico, which could bolster economic growth and job creation [SOURCE - Mexico Daily News].

In Argentina, the economy is showing signs of recovery under President Javier Milei, who has implemented reforms inspired by India's economic policies. The International Monetary Fund is in discussions with Argentina regarding a potential new loan, indicating a willingness to engage with the country's reform efforts [SOURCE - Seeking Alpha]. However, public sentiment remains mixed, with many citizens expressing frustration over perceived mismanagement of tax revenues [SOURCE - Defence.pk].

In Colombia, economic growth is on the rise, driven by improvements in the agricultural sector. The country's stock market is also experiencing a resurgence, although investors remain cautious due to global market volatility [SOURCE - Rio Times Online].

We’ll have a slimmed-down SITREP over the next couple of days over the holidays, and for those celebrating, Merry Christmas and Happy Hanukkah.

Carpe tomorrow!

PS - By the way, you’ll have noticed that I haven’t switched over to an automated system yet and the truth is, I might not. The core of the SITREP is still heavily automated but I like being able to add the headlines and any commentary so I think I’ll stick with this format for the foreseeable future.

As they say, plus ça change, plus c'est la même chose….