Mission Grey Daily Brief - October 22, 2024
Summary of the Global Situation for Businesses and Investors
The US presidential election is three weeks away, and the global wars are expected to impact the race. In Israel, the death of Hamas leader Yahya Sinwar has left a power vacuum and intensified the conflict with Israel, as the acting leader of Hamas vows to continue the fight. Meanwhile, Morocco is undergoing a government reshuffle, and Luxembourg's supercomputer is making a quantum leap. Hurricane Oscar has made landfall in the Bahamas and is heading towards Cuba.
Israel-Hamas Conflict
The death of Hamas leader Yahya Sinwar has left a power vacuum and intensified the conflict with Israel. Sinwar, who masterminded the 7 October attacks that killed over 1,200 Israelis, was killed by Israeli forces last week. The acting leader of Hamas, Khaled Mashal, has vowed to continue the fight, pledging loyalty to the group's path of martyrs and resistance. The Israeli Prime Minister Benjamin Netanyahu has vowed to continue the offensive in Gaza, despite calls for a ceasefire from international allies and the families of hostages still held captive.
The conflict has resulted in significant infrastructure damage in Gaza, with two-thirds of the infrastructure either damaged or destroyed. The Gazan Ministry of Health reports that the conflict has also killed over 40,000 Palestinians.
The Israeli government is mulling how to respond to an Iranian attack in retaliation for the killing of Hezbollah's long-time leader, Hassan Nasrallah. Experts believe that the Israeli government sees this as an opportunity to completely neutralise Iran and its allies.
Serbia-Russia Relations
Serbia's president has vowed never to impose sanctions on Russia and thanked Putin for gas supplies. This development highlights the continued close relationship between Serbia and Russia, despite international pressure to impose sanctions.
US-Ukraine Relations
US Secretary of Defense Lloyd Austin has reaffirmed the United States' unwavering support for Ukraine during a visit to Kyiv. This visit comes as Ukraine continues to defend itself against Russian aggression and seek international support.
Hurricane Oscar
Hurricane Oscar has made landfall in the Bahamas and is heading towards Cuba. The storm has caused significant damage and disruption in the Bahamas, with heavy rain and flooding reported. The storm is expected to impact Cuba in the coming days.
Other Developments
- Police in Mozambique fired tear gas at an opposition politician as post-election tensions soared.
- Albania's left-wing former president Meta was arrested on corruption allegations.
- The Economist reported on foreign fighters captured by Ukrainian authorities, who claim they were tricked into fighting for the Russian army.
- Russia is investigating the claimed shoot-down of a cargo jet in Sudan's Darfur region.
- The US sent migrants back to China, and Singapore's Pritam Singh trial made headlines.
- Luxembourg's supercomputer made a quantum leap, and the City of London is doing better after Brexit.
- Israel's plans for Iran and protests in Martinique are being closely watched.
Further Reading:
Albania’s left-wing former President Meta is arrested on corruption allegations - Toronto Star
Hurricane Oscar makes landfall in the Bahamas and heads toward Cuba - WV News
Israel’s plans for Iran and protests in Martinique - Monocle
Morocco : Akhannouch's grand government reshuffle unveiled - Africa Intelligence
Russia investigates the claimed shoot-down of a cargo jet in Sudan’s Darfur region - Toronto Star
Super times for Luxembourg’s supercomputer as it makes quantum leap - Luxembourg Times
The foreigners fighting and dying for Vladimir Putin - The Economist
‘Sinwar storm’ is coming for Israel, claims new Hamas leader - Euronews
Themes around the World:
AI and Technology as Market Drivers Amid Fragmentation
Artificial intelligence and advanced technology investment remain central to US economic growth and global market leadership. However, trade fragmentation, export controls, and valuation risks are prompting more selective investment approaches, with a focus on supply chain security, domestic capacity, and regulatory compliance.
Technology Export Controls and Geopolitical Rivalry
US technology export controls, especially targeting China, continue to escalate. This restricts access to advanced semiconductors and dual-use technologies, prompting retaliatory measures and complicating cross-border R&D, investment, and supply chain strategies for global tech firms.
Accelerating Supply Chain Diversification
Vietnam is rapidly emerging as a preferred hub for high-value electronics manufacturing, with global firms like Google and Apple relocating advanced production and engineering processes from China. This shift is driven by geopolitical tensions, U.S. tariffs, and the need for resilient, independent supply chains, positioning Vietnam at the center of global value chains.
EU and Denmark Strengthen Arctic Security
Denmark, with EU support, is investing billions in Arctic defense—new naval vessels, surveillance drones, and satellite capacity—to counter US and Russian ambitions. This military buildup affects logistics, shipping routes, and risk calculations for businesses operating in the region.
Strategic Pivot to Asian and Global Markets
Canada is actively seeking to double non-U.S. exports by 2035, leveraging new agreements with China and expanding ties with Asia-Pacific and plurilateral blocs. This pivot aims to reduce vulnerability to U.S. trade policy shocks and foster new investment and technology partnerships, but increases exposure to geopolitical risks.
TSMC’s Global Expansion and AI Boom
TSMC, the world’s largest chipmaker, is expanding with new US plants and record capital expenditure, driven by surging AI chip demand. This cements Taiwan’s centrality in advanced technology supply chains but also increases exposure to geopolitical and operational risks.
US Trade Access and AGOA Renewal
The renewal of the African Growth and Opportunity Act (AGOA) is pivotal for South African exports to the US. While a three-year extension is likely, eligibility reviews and geopolitical tensions pose uncertainty, threatening duty-free access and impacting sectors like automotive, textiles, and agriculture.
Strategic Reset With China
Canada and China have entered a new era of economic partnership, marked by reduced tariffs on electric vehicles and canola, and expanded cooperation in energy, finance, and agriculture. This recalibration aims to diversify Canada’s trade and investment flows, reducing overdependence on the US market.
Regional Political Tensions and Mediation
Turkey’s active mediation in regional conflicts, including the Russia-Ukraine war and Middle East crises, positions it as a diplomatic actor. Political volatility and shifting alliances may impact cross-border trade, investment risk, and supply chain continuity for global businesses.
Eastern Economic Corridor Bottlenecks
Land shortages and zoning constraints in the Eastern Economic Corridor (EEC) are delaying major industrial projects. The government is fast-tracking reforms, but prolonged regulatory processes and infrastructure gaps may hinder investment and supply chain expansion.
Inflationary Pressures and Currency Volatility
Food inflation and rupiah depreciation are ongoing concerns, with inflation peaking at 2.92% in 2025 and the rupiah hitting record lows. These trends impact consumer purchasing power, operational costs, and financial planning for international businesses operating in Indonesia.
Widespread Protests and Political Instability
Mass protests driven by economic hardship and political repression have spread nationwide, resulting in hundreds of deaths. The risk of regime change or violent crackdowns creates extreme uncertainty for investors, supply chains, and operational continuity.
Currency Depreciation and Financial Stability
The Korean won’s sharp depreciation—over 2% in early 2026—raises concerns for outbound investments and financial stability. Authorities are balancing market liberalization with intervention, as large capital outflows could exacerbate volatility, impacting international investors and trade partners.
State-Level Climate And Innovation Leadership
Despite federal policy reversals, US states and private sector actors continue to drive renewable energy adoption and climate innovation. This creates a patchwork regulatory landscape, with subnational initiatives sustaining investment opportunities and supply chain diversification for global firms.
Geopolitical Role in Black Sea Security
Turkey is assuming a leadership role in Black Sea naval security missions amid the Russia-Ukraine conflict, enhancing regional maritime safety. This strategic position strengthens Turkey’s influence in NATO and impacts trade routes, logistics, and risk assessments for international operators.
Regulatory Reforms and Private Sector Incentives
The government is implementing new tax incentives, customs reforms, and digitalization to attract investment and support local industry. IMF reviews and international partnerships are driving structural changes, but bureaucratic hurdles and military influence still challenge private sector growth.
Foreign Investment Policy Tightens
Saudi Arabia is refining its foreign investment regulations, balancing openness with strategic national interests. Enhanced compliance, local content requirements, and sectoral restrictions may affect market entry, ownership structures, and profit repatriation for international investors.
Export Market Diversification and Compliance
Vietnamese exporters are expanding into new markets, leveraging FTAs such as CPTPP and EVFTA. Sectors like textiles, seafood, and agriculture are adapting to stricter standards and traceability requirements, positioning Vietnam as a reliable, high-standard supplier. Compliance with international norms is increasingly vital for market access and supply chain resilience.
Institutional Revitalization and Regulatory Cooperation
Canada and China have reactivated dormant trade and investment commissions, signed MOUs on energy, agriculture, and animal health, and pledged regular ministerial dialogues. These institutional mechanisms aim to resolve trade barriers and foster regulatory alignment, impacting market access and compliance.
EU-Mercosur Trade Deal Backlash
The imminent EU-Mercosur trade agreement faces strong opposition from French farmers and political factions, who fear market flooding by cheaper imports and threats to food security. Protests and government support measures highlight deep divisions, affecting agricultural supply chains and broader trade policy.
Reliance on Remittances Over Exports
Pakistan’s economy is increasingly sustained by remittances and debt rather than exports. The export-to-GDP ratio dropped to 10.4% in 2024, widening vulnerabilities and highlighting the urgent need for export-led reforms, infrastructure upgrades, and improved trade agreements.
New Capital City (IKN) Investment Momentum
The IKN project continues to attract new investors, with recent agreements covering culinary, commercial, and office developments. This signals growing business confidence in IKN’s role as a future economic hub, with implications for real estate, infrastructure, and supporting industries.
Record Mexico-US Trade Surplus
Mexico’s exports to the US reached a record $48.5 billion in October 2025, with a 6.7% annual increase and a trade surplus of $18.9 billion. This underscores Mexico’s strategic role in US supply chains, but exposes it to US tariff and regulatory risks amid tense bilateral relations.
Climate Transition and Fossil Fuel Dependence
Despite climate commitments, South Africa is expanding domestic gas and coal projects, risking stranded assets and exposure to carbon border taxes. This tension between energy security and sustainability creates regulatory uncertainty and reputational risks for international partners and investors.
Fiscal Policy, Debt, and Bond Market Concerns
Germany’s fiscal expansion—over €850 billion in new debt planned this decade—has raised the debt-to-GDP ratio toward 90%. Bond markets are signaling concern, with risk premiums on German Bunds rising and capital shifting to other EU countries, reflecting doubts about long-term fiscal sustainability.
Rising Role in Global Supply Chains
Indonesia is capturing a growing share of global supply chains as U.S.-China trade declines, with Indonesian imports to the U.S. rising 34% in 2025. This shift enhances Indonesia’s position as a sourcing hub, attracting investment and diversifying global manufacturing.
US-Australia Alliance Deepens Amid Indo-Pacific Shifts
AUKUS and the Pax Silica coalition strengthen Australia's role in critical technology and defense supply chains. As US policy demands greater allied burden-sharing, Australia faces pressure to increase defense spending and self-reliance, influencing investment in advanced manufacturing and security-sensitive sectors.
Strategic Alignment with China Amid Global Shifts
Pakistan’s deepening strategic partnership with China, marked by high-level dialogues and expanded cooperation in technology, space, and finance, is reshaping its economic and geopolitical orientation. This alignment is pivotal for infrastructure, trade, and regional stability but may complicate relations with Western partners.
US-Israel Strategic Aid Recalibration
Recent US legislative debates and Israel’s stated intent to reduce military aid dependence signal a shift in the bilateral relationship. The $38 billion aid package expiring in 2028 and negotiations for a new 20-year deal impact Israel’s defense sector, technology partnerships, and investor risk assessments.
Sectoral Shifts In US Employment And Investment
US employment trends show growth in services and construction, but persistent declines in manufacturing and warehousing. Layoff plans have eased, yet hiring remains cautious. These sectoral shifts influence investment strategies, labor costs, and operational planning for international companies.
State Intervention and Subsidy Expansion
The German government, with EU approval, is expanding subsidies for new gas-fired power plants and industrial electricity costs. While aimed at supporting industry, these interventions raise concerns about long-term competitiveness, fiscal sustainability, and potential market distortions within the EU.
FDI Reforms and High-Value Sector Focus
Thailand is shifting its investment strategy to attract FDI in high-tech, green infrastructure, and wellness tourism. Legal and regulatory reforms, infrastructure upgrades, and anti-corruption initiatives aim to reposition Thailand as a regional hub for future industries, but execution remains critical.
Technology Export Controls and Sanctions
Taiwan faces evolving export control regimes, especially for semiconductors and AI chips, amid US-China tech competition. New tariffs and sanctions, including US restrictions on certain AI chips, create compliance challenges and impact Taiwan’s global trade flows.
Currency Collapse and Hyperinflation
The Iranian rial has fallen to over 1.4 million per US dollar, losing 45% of its value in a year. Inflation exceeds 42%, eroding purchasing power, raising import costs, and destabilizing the business environment for both local and foreign enterprises.
Labor Reforms and Cost Pressures
Mexico’s 2026 labor reforms include a 13% minimum wage increase, mandatory social security for platform workers, and a proposed reduction of the workweek. These changes raise labor costs and compliance requirements, affecting competitiveness and supply chain strategies.
Canada-China Trade Normalization and Tariff Reset
Canada and China have reached a landmark agreement to reduce tariffs on electric vehicles and canola, unlocking nearly $3 billion in Canadian exports. This deal signals a thaw in bilateral relations, but risks U.S. retaliation and supply chain realignment, especially in autos and agriculture.