Mission Grey Daily Brief - December 01, 2024
Summary of the Global Situation for Businesses and Investors
The global situation remains highly volatile, with the war in Ukraine continuing to dominate headlines. Ukrainian President Volodymyr Zelensky has suggested temporarily ceding Ukrainian territory to Russia in exchange for NATO membership, a significant shift from his previous stance. Meanwhile, Russia has suffered heavy casualties, with more than 2,000 losses in a single day. In other news, Romania's presidential election has seen the rise of a hard-right, pro-Russia populist-nationalist, Călin Georgescu, who aims to cut aid to Ukraine and limit Romania's collaboration with NATO. Additionally, Donald Trump's tariff threats have revealed Canada's trade dependency on the U.S., while Iran's currency has hit a record low, exacerbated by geopolitical tensions and economic pressures.
Ukraine-Russia War: Shifting Dynamics and Implications
The Ukraine-Russia war continues to be a major focus, with Ukrainian President Volodymyr Zelensky suggesting a potential peace deal that involves temporarily ceding Ukrainian territory to Russia in exchange for NATO membership. This proposal marks a significant shift from Zelensky's previous stance, as he has never indicated a willingness to cede occupied Ukrainian territory. The interview where he made this statement is the first time he has suggested such a peace deal, as Russia intensifies its push for Ukrainian territory.
Russia has suffered heavy casualties, with more than 2,000 losses in a single day, according to Ukrainian military claims. This would be one of the heaviest tolls of losses inflicted on Vladimir Putin's forces at any point in the war. Russia appears to be ramping up its push for territory, with the Kremlin potentially anticipating that Donald Trump could seek to follow through on his presidential election campaign claim to rapidly end Moscow's invasion with a peace deal once he re-enters the White House in January.
Russian losses have been consistently high, with around 1,500 casualties each day, according to Ukrainian and Western military chiefs. The general staff of Ukraine's armed forces claimed that more than 200 combat clashes had taken place in the past 24 hours, with Russia suffering 2,030 losses. The exact toll may never be known, but Russia's relative willingness to expend its troops' lives in a costly war of attrition for incremental gains means its losses are likely greater than those of Ukraine.
As clashes were reported across frontline areas of Ukraine, Kyiv's military said Russian attackers had launched 93 airstrikes using nearly 180 missiles, as well as firing more than 4,800 artillery shells in the past 24 hours. The heaviest fighting came in Donetsk, near Povrovsk, where Ukraine claimed to repel more than 60 attacks, and close to Kurakhove, where Russia tried 43 times to breach Ukraine's defences. Ukraine's army chief, Oleksandr Syrskyi, vowed to strengthen troops deployed on the eastern front with reserves, ammunition, and equipment.
Romania's Presidential Election: Rise of a Hard-Right Populist
In Romania's presidential election, Călin Georgescu, a hard-right, pro-Russia populist-nationalist, has emerged as a surprise winner in the first round, with a narrow margin of 22.9% against 19.17% for the centrist candidate, Elena Lasconi. Georgescu's anti-globalisation, anti-NATO, and Eurosceptic platform, entitled "Food, Water, Energy", stresses self-sufficiency and aims to return the country to its rural roots.
Georgescu's victory has raised concerns about Russian hybrid warfare and election interference via social media. His hard-right, sovereigntist agenda could shift the next parliament to the right and profoundly affect Romania's future direction. NATO has particular reason to worry, as Georgescu has indicated he would cut aid to Ukraine and limit Romania's collaboration with NATO, which he believes makes the country a target.
Trump's Tariff Threats: Impact on Canada's Trade
Donald Trump's tariff threats have revealed Canada's trade dependency on the U.S. Canada failed to cultivate new trade corridors that could have mitigated the potential impact of Trump's tariff threats ahead of his return to the White House. Experts argue that while there are opportunities to diversify Canadian trade, Canada did not sufficiently build out new trade corridors since the last Trump presidency.
Canada's close ties to the U.S. economy have intensified since renegotiating the Canada-U.S.-Mexico Agreement (CUSMA) under the last Trump presidency. Trade volumes between the three neighbours have grown roughly 30% since CUSMA was signed. Canada's largest trading partner by a wide margin is the U.S., with 77% of the value of all Canadian exports heading there. China is the closest export market for Canada at only four per cent.
Meredith Lilly, a Carleton University professor and former foreign affairs and international trade adviser, notes that Canada has tried to diversify its trade away from the U.S. for decades, but with limited success. Lilly argues that diversifying trade with more partners is important, as it gives Canada more leverage in negotiations with the U.S. However, shifting supply chains from the U.S. to other markets is a complex task.
Iran's Currency Crisis: Geopolitical and Economic Pressures
Iran's currency, the rial, has hit a record low, with the U.S. dollar trading at over 71,200 tomans on the open market. This sharp increase reflects ongoing geopolitical tensions and economic pressures. Economic analysts attribute the rial's decline to unprecedented military confrontations between Iran and Israel this year. The announcement of Donald Trump's victory in the U.S. presidential elections further exacerbated market concerns.
The record-breaking depreciation of the rial highlights Iran's deepening economic crisis, with accelerating inflation and an untenable cost of living for many citizens. Prices of essential goods, including vegetables and dairy products, have skyrocketed. The removal of preferential currency rates for essential imports, such as medicine, has exacerbated the crisis. Iran's government faces mounting pressure to stabilize the economy, but its options are limited.
Decades of sanctions, corruption, and reliance on oil revenues have left Iran vulnerable to external shocks. Geopolitical tensions, particularly concerning Iran's nuclear ambitions and regional activities, continue to discourage foreign investment and trade. Ordinary Iranians bear the brunt of these economic struggles, facing financial and psychological strain.
Further Reading:
Iran’s Currency Hits Record Low Amid Rising Economic Pressures - Iran News Update
North Korea’s Kim Jong Un vows ‘steadfast support’ for Russia’s war in Ukraine - The Independent
Russia suffers record 2,000 casualties in day, Ukraine claims - The Independent
Serbia Denies It Was Behind Water Canal Blast In Kosovo - Radio Free Europe / Radio Liberty
Small nation, big impact: Luxembourg pledges €80M for Ukraine weapons - Bulgarian Military
Trump tariff threats reveal Canada’s trade dependency on U.S.: experts - Global News Toronto
Trump threatens a 100% tariff on BRICS countries if they abandon U.S. dollar - NBC News
Ukraine under pressure as Russia makes advances on frontline - Euronews
Themes around the World:
Dados e regulação digital (LGPD)
A ANPD foi transformada em agência reguladora, com autonomia e nova carreira de fiscalização, elevando probabilidade de enforcement. Para multinacionais, isso aumenta exigências de governança de dados, contratos com terceiros, transferências internacionais e resposta a incidentes, influenciando custos de compliance e reputação.
EU accession fast-track uncertainty
Brussels is debating “membership-lite/reverse enlargement” to bring Ukraine closer by 2027–2028, but unanimity (notably Hungary) and strict acquis alignment remain hurdles. The pathway implies rapid regulatory change across customs, competition, SPS, and rule-of-law safeguards—material for compliance planning.
Elektrifizierung erhöht Strom- und Netzabhängigkeit
Wärmepumpen, Großwärmepumpen und Abwärmenutzung (z. B. Rechenzentren) erhöhen Strombedarf und verlangen Netzausbau sowie flexible Tarife. Hohe Strompreise und Netzrestriktionen beeinflussen TCO, Standortentscheidungen und PPA-Strategien internationaler Betreiber, Versorger und Industrieabnehmer.
China trade frictions, tariffs
Anti-dumping measures on Chinese steel products and broader de-risking pressure increase retaliation risk against flagship exports (iron ore, agriculture, education). Importers face compliance and sourcing shifts; exporters should stress-test China exposure and diversify contracts and logistics routes.
US tariff and NTB pressure
Washington is threatening to restore 25% tariffs unless Seoul delivers on a $350bn US investment pledge and eases non-tariff barriers (digital rules, agriculture, auto/pharma certification). Policy uncertainty raises pricing, compliance, and sourcing risks for exporters.
Ужесточение контроля судоходства
Запад переходит к физическому пресечению обхода: перехваты и досмотры танкеров, обсуждения ареста судов, давление на «безфлаговые» и переоформление танкеров под российский флаг. Фрахт, страхование и портовые сервисы дорожают, повышая сбои отгрузок.
Stricter competition and digital rules
The CMA’s assertive posture and the UK’s digital competition regime increase scrutiny of mergers, platform conduct and data-driven markets. International acquirers should expect longer timelines, expanded remedies, and higher litigation risk, particularly in tech, media, and consumer sectors.
LNG export expansion and permitting
The administration is accelerating LNG export approvals and permitting, supporting long-term contracts with Europe and Asia and stimulating upstream investment. Cheaper, abundant U.S. gas can lower energy-input costs for U.S. manufacturing while tightening global gas markets and shipping capacity.
Supply chain realignment and friend-shoring
U.S. economic security doctrine is reinforcing regionalization and ‘friend-shoring,’ influencing sourcing, logistics hubs, and capital flows toward allied jurisdictions. Companies are adopting dual supply chains, higher inventory buffers, and geopolitical risk premiums, raising costs but improving resilience.
Selic alta e volatilidade
Com Selic em 15% e inflação de 12 meses em 4,44% (perto do teto de 4,5%), o BC sinaliza cortes graduais a partir de março, sem guidance longo. A combinação de juros e incerteza fiscal afeta crédito, câmbio, hedges e decisões de capex.
Oil and gas law overhaul
Indonesia is revising its Oil and Gas Law, including plans for a Special Business Entity potentially tied to Pertamina and a petroleum fund funded by ~1–2% of upstream revenue. Institutional redesign and fiscal terms could shift PSC governance, approvals, and investment attractiveness.
Stablecoins become fiscal tool
US policy is positioning Treasury-backed stablecoins as a new buyer base for short-term bills and a lever of dollar reach. This may shift liquidity from bank deposits, alter credit availability, and create new compliance, treasury, and settlement models for multinationals.
Economic security ‘club’ trade blocs
US-led ‘invitation-only’ economic security agreements—starting with critical minerals—are becoming central to market access via subsidies, guaranteed purchases, and possible tariffs on non-members. Australia must balance participation benefits against retaliation risk from excluded major partners.
Tariff volatility reshapes trade flows
Ongoing on‑again, off‑again tariffs and court uncertainty (including possible Supreme Court review of IEEPA-based duties) are driving import pull‑forwards and forecast containerized import declines in early 2026, complicating pricing, customs planning, and supplier diversification decisions.
Санкции против арктического LNG
ЕС предлагает запрет обслуживания LNG‑танкеров и ледоколов, что бьёт по арктическим проектам и логистике. При этом в январе 2026 ЕС купил 92,6% продукции Yamal LNG (1,69 млн т), сохраняя зависимость и создавая волатильность регуляторных решений.
Shipbuilding rivalry in LNG boom
Qatar’s planned LNG expansion (77 to 142 mtpa by 2030) could trigger ~70 new LNG carrier orders, intensifying Korea–China competition. Korean yards retain quality advantages, but China is narrowing delivery times—impacting procurement strategies, pricing, and maritime supply chains.
Critical minerals bloc and rare-earth strategy
South Korea chairs the US-led FORGE initiative while also building a China hotline and joint committee to stabilize rare-earth imports. Policy includes easing public-sector overseas resource limits and funding mine access, reshaping sourcing, compliance, and procurement for EVs, chips, and defense.
Labor shortages and mobility constraints
Reserve duty, reduced availability of non-Israeli workers, and security-related absenteeism strain construction, services, and some industrial operations. Companies should expect wage pressure, longer project timelines, and greater need for automation, subcontracting, and cross-training to maintain continuity.
Governance, anti-corruption compliance drive
Pakistan’s new governance plan targets high-risk agencies, procurement rules, AML strengthening and asset disclosures under IMF scrutiny. Improved enforcement may reduce long-term corruption risk, but near-term increases in audits, documentation and dispute resolution timelines raise operating friction.
Post-election policy continuity risk
Bhumjaithai’s landslide win improved near-term sentiment, but coalition bargaining and potential reshuffles raise execution risk. Businesses should expect regulatory and budget-timing uncertainty (FY2027 disbursement delays), and prioritize scenario planning for permits, procurement, and public-project pipelines.
USMCA review and exit risk
With a mandatory July 1 review, the White House is reportedly weighing USMCA withdrawal while seeking tougher rules of origin, critical-minerals coordination, and anti-dumping. Heightened uncertainty threatens North American integrated supply chains, automotive planning, and cross-border investment confidence.
Monetary easing amid weak growth
Bank of England is holding Bank Rate at 3.75% after a narrow 5–4 vote, but signals likely cuts from spring as inflation trends toward 2%. Shifting rate expectations affect GBP, financing costs, valuations, and hedging for UK-linked trade.
China-Abhängigkeit und De-Risking
China ist wieder größter Handelspartner (2025: €251,8 Mrd.), bei stark steigendem Defizit (≈€89,3 Mrd.). Exportkontrollen bei Seltenen Erden und wachsende Wettbewerbsfähigkeit chinesischer Anbieter erhöhen Lieferketten- und Absatzrisiken; Unternehmen diversifizieren Beschaffung und Märkte.
Power tariff overhaul, circular debt
IMF-backed electricity tariff restructuring shifts costs via higher fixed charges while cutting some industrial per‑unit rates; inflation could rise and consumer demand weaken. Persistent DISCO losses and circular debt create outage and cost volatility risks for manufacturers and service providers.
Enerji arzı çeşitlenmesi ve LNG
Türkiye’nin LNG alımları artıyor; uzun vadeli kontratlar ve FSRU kapasitesi genişlemesi gündemde. Bu, enerji yoğun sektörlerde maliyet öngörülebilirliğini artırabilir; ancak gaz fiyatlarına ve jeopolitik risklere duyarlılık sürer. Sanayi yatırımlarında enerji tedarik sözleşmeleri kritikleşiyor.
Minerais críticos e competição geopolítica
EUA e UE intensificam acordos para grafite, níquel, nióbio e terras raras; a Serra Verde recebeu financiamento dos EUA de US$ 565 milhões. Oportunidades em mineração e refino convivem com exigências ESG, licenciamento e risco de dependência de compradores.
Chabahar port and corridor uncertainty
India’s Chabahar operations face waiver expiry (April 26, 2026) and new U.S. tariff threats tied to Iran trade, prompting budget pullbacks and operational caution. Uncertainty undermines INSTC/overland connectivity plans, increasing transit risk for firms seeking Eurasia routes via Iran.
US/EU trade rules tightening
Thailand faces heightened external trade-policy risk: US tariff uncertainty and monitoring of transshipment, while EU market access increasingly hinges on CBAM, waste-shipment rules and standards. Firms must strengthen origin compliance, traceability, documentation and supplier due diligence to protect exports.
LNG export surge and permitting pipeline
The US is expanding LNG exports and new capacity proposals, supporting allies’ energy security but tightening domestic gas balances in some scenarios. Energy-intensive industries face price uncertainty; traders and shippers should watch FERC/DOE approvals, contract structures, and infrastructure bottlenecks.
İşgücü gerilimleri ve operasyon sürekliliği
Büyük perakende/lojistik ağlarında ücret anlaşmazlıkları grev ve işten çıkarmalara yol açabiliyor; dağıtım merkezleri ve depolarda aksama riski yükseliyor. Çok lokasyonlu işletmeler için sendikal dinamikler, taşeron kullanımı, güvenlik müdahaleleri ve itibar yönetimi tedarik sürekliliğini etkiler.
Financial system tightening and liquidity
Banking reforms—phasing out credit quotas and moving toward Basel III—may reprice credit and widen gaps between strong and weak lenders. With credit-to-GDP above 140% and periodic liquidity spikes, corporates may face higher working-capital costs and tougher project financing.
Ports upgrades and maritime competitiveness
Karachi launched modern bunkering with Vitol, targeting 500k–600k tons annually and 70–100 operations monthly, improving turnaround. Gwadar airport/free-zone incentives and highways expand options. Benefits depend on security and governance, but could lower logistics friction.
Escalating sanctions and enforcement
The EU’s proposed 20th package broadens energy, banking and trade controls, including ~€900m of additional bans and 20 more regional banks. Companies face heightened secondary-sanctions exposure, stricter compliance screening, and greater uncertainty around counterparties and contract enforceability.
Ports and logistics hub acceleration
Saudi ports are expanding capacity and private participation to capture transshipment and east–west trade. January throughput reached 738,111 TEUs (+2% YoY) with transshipment +22%. Deals include APM Terminals buying 37.5% of Jeddah’s 4.1m TEU South Container Terminal, plus new logistics centers.
Energy tariff overhaul and costs
IMF-linked power tariff restructuring is shifting from volumetric to higher fixed charges, while cutting industrial per-unit rates. Changes can lift inflation yet reduce cross-subsidies. Businesses face uncertainty in electricity bills, competitiveness, and contract pricing for factories.
Wettlauf Wärmepumpe gegen Fernwärme
Industrie und Versorger konkurrieren um Haushalte: Wärmepumpen-Installationskapazitäten versus Fernwärmeanschluss. Das führt zu volatilem Auftragseingang, Preisdruck und Engpässen bei Handwerk/Planung. Internationale Zulieferer müssen Kapazitäten flexibel steuern und lokale Partnernetze stärken.