Mission Grey Daily Brief - November 06, 2024
Summary of the Global Situation for Businesses and Investors
The 2024 US presidential election has resulted in a victory for Donald Trump, with the Republican Party also taking control of the Senate. This outcome is expected to have a significant impact on the global economy, with stocks rising and the US dollar surging in anticipation of potential tax cuts, tariffs, and rising inflation. Meanwhile, Tropical Storm Rafael is approaching the Cayman Islands and Cuba, potentially causing significant damage. In other news, the US has written off over $1 billion of Somalia's debt, and the Iraqi government has approved compensation plans for oil produced in the Kurdistan Region, potentially easing a long-running oil dispute. Lastly, Mexico's National Guard has killed two Colombians and wounded four on a migrant smuggling route near the US border, highlighting the ongoing challenges of migration and border security.
The US Election and its Impact on the Global Economy
The 2024 US presidential election has resulted in a victory for Donald Trump, with the Republican Party also taking control of the Senate. This outcome is expected to have a significant impact on the global economy, with stocks rising and the US dollar surging in anticipation of potential tax cuts, tariffs, and rising inflation. Bitcoin has also reached a record high, as traders bet on potential tax cuts, tariffs, and rising inflation under Trump. Experts predict a turbulent day for financial markets as a response to global uncertainty and Trump's potential plans for the economy. Trump's global trade policies, particularly his pledge to dramatically increase trade tariffs, especially on China, are causing particular concern in Asia. His more isolationist stance on foreign policy also raises questions about his willingness to defend Taiwan against potential aggression from China.
Tropical Storm Rafael and its Impact on the Caribbean
Tropical Storm Rafael is approaching the Cayman Islands and Cuba, potentially causing significant damage. The Toronto Star reports that the storm is spinning towards the Cayman Islands and Cuba is preparing for a hurricane hit. The Northeast Mississippi Daily Journal adds that the storm has passed Jamaica and is heading towards Cuba, with the potential for significant damage. This event highlights the vulnerability of the Caribbean region to tropical storms and hurricanes, and the potential for significant economic and humanitarian impacts.
North Korea's Nuclear Ambitions and its Impact on Global Security
North Korea has told the UN that it is speeding up its nuclear weapons development, with the launch of a new ICBM and the deployment of troops to support Russia in Ukraine. This development has raised concerns among the international community, with the US accusing Russia and China of protecting North Korea and criticizing their failure to prevent North Korea's nuclear ambitions. The UN Security Council has met to discuss North Korea's nuclear program, but North Korea has doubled down on its plans, refusing to engage in nonproliferation efforts. This situation highlights the growing tensions between North Korea and the international community, and the potential for further escalation and instability in the region.
The Ukraine War and its Impact on Global Geopolitics
The Ukraine war continues to be a major geopolitical issue, with Russia engaging in a war of attrition and analysts suggesting that Putin is not in a hurry to end the conflict, regardless of the outcome of the US election. Russia has been ratcheting up pressure on Ukraine, with larger troop numbers and artillery supplies, and making incremental but important gains on the front lines. North Korean troops fighting for Russia have come under Ukrainian fire, adding to Ukraine's worsening situation on the battlefield. Russian advances have accelerated, with battlefield gains of up to 9 kilometers in some parts of Donetsk. This situation highlights the ongoing challenges for Ukraine and its allies, and the potential for further escalation and instability in the region.
Further Reading:
BREAKING: Trump wins US 2024 presidential election, foreign leaders congratulate - Kyiv Independent
Iraqi government approves compensation plans for oil produced in Kurdistan Region - The National
North Korean troops fighting with Russia are hit by Ukraine shells, official says - The Independent
Putin is in no hurry to end the Ukraine war, no matter who wins the US election - Business Insider
Stocks rise as investors await US presidential result - BBC.com
Storm in the Caribbean is on a track to likely hit Cuba as a hurricane - Toronto Star
Themes around the World:
Lira depreciation and inflation stickiness
January inflation ran 30.65% y/y (4.84% m/m) while the central bank cut the policy rate to 37%, pushing USD/TRY to record highs. Persistent price pressures and FX weakness raise import costs, complicate pricing, and increase hedging needs.
De-dollarisation and local-currency settlement
Russian officials report near‑100% national‑currency use in trade with China and India and ~90% within the EAEU, reducing USD/EUR reliance. For foreign firms, FX convertibility, hedging, and repatriation complexity rise, especially where correspondent banking access is constrained.
Labour Market and Immigration Shifts
The UK labour market is shaped by new immigration policies, skills shortages, and demographic trends. Restrictions on migrant mobility and evolving visa rules affect talent availability, wage pressures, and long-term economic growth.
China Exposure and Supply Chain Risks
German industry’s deep integration with China, especially in automotive and high-tech sectors, creates strategic vulnerabilities. Recent government commissions highlight growing awareness, but slow policy action leaves supply chains and critical infrastructure exposed to geopolitical shocks and Chinese competition.
Regulatory Uncertainty and National Security
China’s regulatory environment has become more unpredictable, with heightened enforcement on national security, technology, and data. Foreign businesses face stricter compliance requirements, greater scrutiny, and potential exposure to sudden policy shifts, impacting investment and operational planning.
Persistent Logistics and Port Inefficiencies
Chronic inefficiencies at South African ports, especially Cape Town and Durban, continue to undermine export competitiveness. Recent failures cost the fruit sector hundreds of millions of rand, with global port rankings placing South African ports among the worst, hampering supply chains and growth.
Advanced Manufacturing and Automation
Japan's leadership in semiconductor equipment, packaging, and automation is reinforced by robust growth in AI-driven demand. Investments in high-end manufacturing and automation support global supply chain reliability, with Japanese firms commanding key positions in advanced technology markets.
Auto sector reshoring and EV policy shift
Ottawa’s new auto strategy responds to U.S. auto tariffs and competitive Chinese EV inflows by combining tariff credits, renewed EV incentives and stricter emissions standards while scrapping the prior sales mandate. Impacts include location decisions, supplier localization, and model allocation.
Nuclear Negotiations Shape Risk Outlook
Ongoing nuclear talks with the US and regional actors in Istanbul and Oman are pivotal. Outcomes will determine the future of sanctions relief, market access, and regional stability, but the risk of breakdown or military escalation remains high, directly impacting investment strategies.
Currency Stability and Market Growth
The Brazilian real appreciated 11.19% in 2025, while the Ibovespa index rose 33.7%, marking its best performance since 2016. Stable currency and booming equities enhance Brazil’s attractiveness for portfolio investment and international business expansion.
Port and rail congestion capacity limits
Chronic congestion risks at the Port of Vancouver and inland rail corridors continue to threaten inventory reliability and ocean freight dwell times. Capacity expansions (e.g., terminal upgrades and Roberts Bank proposals) are slow, so importers should diversify gateways and build buffer stock.
EU-UK Relations and Market Access
The UK government is exploring closer alignment with the EU single market to offset Brexit-related losses. Improved EU ties could boost UK GDP and productivity, but ongoing trade tensions and regulatory divergence continue to hamper seamless access for UK firms to the EU market.
Agricultural Export Access and Resilience
China’s tariff cuts on canola, peas, and seafood restore access to a market worth billions for Canadian farmers. The agreement alleviates pressure from previous trade disputes, but ongoing geopolitical risks and market concentration remain key concerns for agri-food exporters.
Labor Reforms and Compliance Pressure
Recent labor reforms include a 13% minimum wage hike, stricter workplace inspections, and recognition of app-based couriers as employees. Upcoming changes, such as a proposed 40-hour workweek and enhanced whistleblowing, increase compliance costs and operational complexity for international employers.
Semiconductor Sector Faces US Pressure
The US is leveraging tariffs and investment incentives to push Korean semiconductor giants like Samsung and SK hynix to expand US-based production. This industrial policy shift could reshape global supply chains, affect Korea’s tech leadership, and increase operational costs for Korean firms.
IMF programme drives policy
IMF-backed reforms through 2027 anchor fiscal discipline, privatisation and revenue mobilisation, but also constrain policy flexibility. Review outcomes shape investor sentiment, sovereign risk pricing and the operating environment for imports, pricing, and capital repatriation across sectors.
Governance, enforcement, and asset risk
Heightened enforcement actions—permit revocations, land seizures, and talk of asset confiscation powers—are raising perceived rule-of-law risk, especially in resources. High-profile mine ownership uncertainty amplifies legal and political risk premiums, affecting M&A, project finance, and long-term operating stability.
Monetary Policy Shifts and Inflation
Turkey’s central bank has shifted to a cautious easing cycle, lowering the policy rate to 37% as inflation fell to 30.9% in December 2025. While investor confidence is improving, inflation volatility and policy uncertainty remain significant risks for business planning and financing.
Tourism recovery with demand mix risks
Tourism is near recovery: Phuket passengers rebounded to 96.4% of 2019 and arrivals Jan 1–25 reached 2.63m (≈THB129.9bn). However, China remains volatile and room-rate power is limited, affecting retail, hospitality capex, labor demand, and services supply chains.
Semiconductor geopolitics and reshoring
TSMC’s expanded US investment deepens supply-chain bifurcation as Washington tightens technology controls and seeks onshore capacity. Companies must manage dual compliance regimes, IP protection, export licensing, and supplier localization decisions across US, Taiwan, and China markets.
BOJ tightening and yen swings
Rising Japanese government bond yields and intervention speculation are increasing FX and funding volatility. Core inflation stayed above 2% for years and debt is about 230% of GDP, raising hedging costs, repatriation risk, and pricing uncertainty for exporters and importers.
Supply Chain Vulnerabilities Persist
Supply chain disruptions have eased but remain a concern, especially in sectors reliant on semiconductors and critical materials. Geopolitical tensions, particularly US-China and EU-US, continue to threaten the stability and resilience of German and European supply chains.
Industrial zones and SCZONE expansion
The Suez Canal Economic Zone continues upgrading ports and terminals (including new container-handling capacity), positioning Egypt for nearshoring and regional distribution. Benefits include improved clearance and industrial clustering, but investors must assess land allocation terms, utility reliability, and FX-linked input costs.
FDI surge and industrial-park expansion
Vietnam attracted $38.42bn registered FDI in 2025 and $27.62bn realised (multi-year high), with early-2026 approvals exceeding $1bn in key northern provinces. Momentum supports supplier clustering, but strains land, power, logistics capacity and raises labour competition.
Resilient but Uneven Economic Outlook
Despite global headwinds, the US demonstrates economic resilience, with steady consumer spending and moderate inflation. However, growth is uneven across sectors, and persistent trade barriers and policy shifts continue to challenge international business operations.
China demand anchors commodity exports
China continues to pivot toward Brazilian soybeans on price and availability, booking at least 25 cargoes for March–April loading. This supports agribusiness, shipping and FX inflows, but concentrates exposure to China demand cycles, freight swings and trade-policy shocks.
Political Instability and Policy Delays
The upcoming February 2026 election and frequent government changes have delayed budget allocations, petroleum law reforms, and infrastructure spending. This uncertainty disrupts public investment, energy projects, and business operations, raising risk for international investors.
Currency Collapse and Hyperinflation
Iran's rial has plunged to record lows, now trading at 1.4–1.5 million per US dollar, with inflation nearing 50%. This currency crisis, driven by sanctions, mismanagement, and corruption, has triggered mass protests, eroded purchasing power, and created severe import and operational challenges for businesses.
Alliance rebalancing and security posture
US strategy signals greater Korean responsibility for deterring North Korea, with discussions on wartime OPCON transfer and cooperation on nuclear-powered submarines. A shifting force posture can affect political risk perceptions, defense procurement, technology transfer, and resilience planning for firms operating in Korea.
Political Polarization and Business Uncertainty
Deepening political divisions and unpredictable policy shifts, especially around elections, undermine regulatory stability and investor confidence. Businesses must navigate volatile labor, tax, and regulatory environments, increasing operational risk and complicating long-term planning.
Rule-of-law and governance uncertainty
Heightened tensions between government and judiciary raise concerns about institutional independence and regulatory predictability. For investors, this can affect contract enforceability perceptions, dispute resolution confidence, and ESG assessments, influencing cost of capital and FDI appetite.
Korea semiconductor industrial policy reboot
A new Special Act creates a presidential commission, dedicated funding and cluster support to strengthen the entire chip supply chain. Regulatory streamlining and regional incentives can attract foreign suppliers, but unresolved labor flexibility debates may constrain rapid R&D and ramp-ups.
China trade détente, geopolitical scrutiny
Canada’s partial tariff reset with China (notably EV quotas and agri tariff relief) improves market access for canola/seafood but heightens U.S. concerns about transshipment and “non-market economy” links. Expect tighter investment screening, procurement scrutiny, and reputational due diligence.
Aggressive US Industrial and Tariff Policy
Sweeping tariffs, export controls, and industrial subsidies under the Trump administration aim to boost domestic manufacturing and reduce trade deficits. These measures raise input costs, provoke foreign retaliation, and complicate cross-border investment and supply chain management for global firms.
Energy Transition and LNG Import Surge
Egypt is rapidly expanding renewable energy projects, signing $1.8 billion in deals with Norway and China. However, domestic gas production decline and regional supply disruptions have turned Egypt into a major LNG importer, raising costs and supply chain complexity.
Semiconductor tariffs and reshoring
New U.S. tariffs on advanced AI semiconductors, alongside incentives for domestic fabrication, are reshaping electronics supply chains. Foreign suppliers may face higher landed costs, while OEMs must plan dual-sourcing, redesign bills of materials, and adjust product roadmaps amid policy uncertainty.