Good morning. Two headlines from the US today.

🇺🇸 President-elect Trump held a very wide-ranging press conference Tuesday full of geopolitical threats and declarations including:

• Refusing to rule out using force to take control of the Panama Canal and Greenland

• Continuing to suggest that Canada should join the US

• Promising to rename the Gulf of Mexico the Gulf of America

How much of this is posturing and how much is sincere remains unclear but it is a reminder of how much geopolitical uncertainty and turbulence will emanate from the incoming administration. [More - Axios]

🔥 Dry conditions and strong winds have caused a wildfire west of Los Angeles to spread rapidly, with tens of thousands of residents forced to evacuate. [CalFire official site] [More - BBC]

Key Metrics

WTI is $72.44 (Down)

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

Wheat is $185.735 (Down)

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

EuroDollar is $1.03 (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 Jan 07 2025 21:16 UTC

Europe Stability Ratings and News Summary

More Unstable

🇦🇱 Albania, 🇦🇹 Austria, 🇧🇾 Belarus, 🇧🇦 Bosnia And Herzegovina, 🇫🇷 France, 🇩🇪 Germany, 🇬🇷 Greece, 🇭🇺 Hungary, 🇮🇹 Italy, 🇲🇰 Macedonia, 🇲🇩 Moldova, 🇲🇪 Montenegro, 🇳🇱 Netherlands, 🇷🇺 Russia, 🇷🇸 Serbia, 🇸🇰 Slovakia, 🇪🇸 Spain, 🇸🇪 Sweden, 🇨🇭 Switzerland, 🇹🇷 Turkey, 🇺🇦 Ukraine

More Stable

No countries were more stable over this period

Unchanged

🇦🇩 Andorra, 🇧🇪 Belgium, 🇭🇷 Croatia, 🇨🇾 Cyprus, 🇨🇿 Czech Republic, 🇩🇰 Denmark, 🇪🇪 Estonia, 🇫🇮 Finland, 🇮🇸 Iceland, 🇮🇪 Ireland, 🇱🇻 Latvia, 🇱🇮 Liechtenstein, 🇱🇹 Lithuania, 🇱🇺 Luxembourg, 🇲🇹 Malta, 🇲🇨 Monaco, 🇳🇴 Norway, 🇵🇱 Poland, 🇵🇹 Portugal, 🇷🇴 Romania, 🇸🇲 San Marino, 🇸🇮 Slovenia, 🇬🇧 United Kingdom

Europe News Summary

A notable advancement is the expansion of the EU's Schengen zone, with Romania and Bulgaria officially joining, thereby eliminating border checks and enhancing economic and cultural integration across member states. This move is expected to bolster trade and tourism, benefiting countries like Switzerland, which has long been part of the Schengen area [SOURCE - Japan Times].

However, the economic outlook for several European nations remains mixed. In Switzerland, electric vehicle sales have seen a decline, raising concerns about the country's green transition. Conversely, there is a growing interest from Indian residents in luxury Swiss watches, indicating a potential area of growth for the Swiss luxury market [SOURCE - Swissinfo] [SOURCE - Live Mint].

In France, President Emmanuel Macron faces domestic challenges as he acknowledges the destabilizing effects of recent snap elections on his administration. Despite these internal issues, France is strengthening its global alliances, notably with India, through strategic defense deals, including the deployment of the aircraft carrier Charles de Gaulle [SOURCE - CNBC] [SOURCE - Economic Times].

The ongoing crisis in Ukraine continues to escalate, with intensified Russian military campaigns leading to significant civilian and military casualties. Ukraine has received substantial support from the United States, including an $8 billion aid package aimed at bolstering its defense capabilities [SOURCE - Spacewar] [SOURCE - Asia One]. The situation is further complicated by the halting of Russian gas exports to Europe via Ukraine, which has resulted in rising energy prices across the continent [SOURCE - Investing.com].

In Poland, the country has made strides in renewable energy, producing a record 29% of its power from renewable sources in 2024. Additionally, Poland's minimum wage has surpassed the US federal rate for the first time, reflecting a positive shift in the labor market [SOURCE - Notes from Poland] [SOURCE - Notes from Poland].

Meanwhile, the Netherlands is grappling with rising tensions and violence, leading to a significant increase in arrests. Despite this unrest, the country has seen record wage increases, although housing costs are expected to rise sharply in 2025 [SOURCE - Dutch News] [SOURCE - Iam Expatriate].

In a tragic incident, Montenegro experienced a mass shooting that left 12 dead, including two children. This event has sparked nationwide protests demanding stricter gun control measures and accountability from security officials [SOURCE - Business Mirror].

MENA Stability Ratings and News Summary

More Unstable

🇪🇬 Egypt, 🇮🇶 Iraq, 🇮🇱 Israel, 🇯🇴 Jordan, 🇱🇧 Lebanon, 🇱🇾 Libya, 🇸🇦 Saudi Arabia, 🇸🇾 Syria, 🇹🇳 Tunisia, 🇾🇪 Yemen

More Stable

No countries were more stable over this period

Unchanged

No countries were unchanged over this period

MENA News Summary

The ongoing conflict in Gaza has escalated dramatically, with at least 184 casualties reported in just three days as Israeli airstrikes continue in response to Hamas's actions. The humanitarian situation in Gaza is deteriorating, with hospitals struggling to cope with the influx of casualties and shortages of medical supplies. The United Nations has accused Israel of targeting healthcare facilities, raising concerns about potential war crimes [SOURCE - Malay Mail]. Amidst this turmoil, Hamas has proposed providing Israel with a list of hostages, but the situation remains tense as negotiations stall [SOURCE - Jewish Press].

In Syria, a new government has been formed, promising a more inclusive approach to governance and signaling intentions to resume diplomatic ties with Saudi Arabia. This development is seen as a crucial step for Syria to re-engage with the international community and stabilize its economy [SOURCE - Financial Times]. The Syrian government has also announced plans to resume international flights from Damascus, which could further aid economic recovery [SOURCE - Malay Mail].

Meanwhile, Turkey is seeking support from Syria in its ongoing battle against the Kurdistan Workers' Party (PKK), a Kurdish militant group that has long troubled Ankara [SOURCE - WND]. This request comes amid rising tensions between Kurdish and Turkish-backed forces in Syria, which recently resulted in the deaths of at least 31 fighters [SOURCE - Defence.pk].

In Yemen, the Houthi rebels have escalated their attacks, claiming responsibility for missile strikes on Israel and shooting down a U.S. military drone. This has prompted a strong international response, including airstrikes from the U.S. and Israel against Houthi positions [SOURCE - The Jerusalem Post]. The humanitarian crisis in Yemen continues to deepen, with civilians suffering from ongoing violence and a lack of essential aid [SOURCE - Al-Monitor].

Saudi Arabia is also navigating a complex landscape, with its non-oil private sector showing steady growth despite global uncertainties. The kingdom is actively pursuing infrastructure projects and strengthening diplomatic ties, notably with Pakistan through symbolic gestures like gifting 100 tons of dates [SOURCE - Associated Press of Pakistan]. However, the kingdom faces challenges in managing human smuggling and security concerns, as it has begun deporting thousands of undocumented migrants [SOURCE - India.com].

Carpe tomorrow!