
Mission Grey Daily Brief - January 10, 2025
Summary of the Global Situation for Businesses and Investors
The global situation remains complex and volatile, with several geopolitical and economic developments that could impact businesses and investors. The Ukraine-Russia war continues to be a major concern, with Donald Trump pushing back the war deadline and the US pledging $500 million in weapons and ammunition for Kyiv. Meanwhile, North Korea's involvement in the war and Donald Trump's threats over Greenland and Ukraine could have significant implications for NATO. In the Middle East, the US has imposed sanctions on Sudan's Rapid Support Forces (RSF) and its leader, Mohamed Hamdan Dagalo, over allegations of genocide and human rights abuses. Lastly, the US is building a Pacific island fortress against China, indicating a potential escalation in tensions between the two countries.
Ukraine-Russia War
The Ukraine-Russia war remains a significant concern for businesses and investors, with Donald Trump pushing back the war deadline and the US pledging $500 million in weapons and ammunition for Kyiv. This development could have a positive impact on the Ukrainian economy, as it will provide much-needed support for the country's military and help to stabilise the situation. However, it is important to note that the war is far from over, and the situation remains highly volatile. Businesses and investors should continue to monitor the situation closely and be prepared for potential risks and opportunities.
North Korea's Involvement in the Ukraine-Russia War
North Korea's involvement in the Ukraine-Russia war is a significant development that could have far-reaching implications for the region. Nearly 12,000 North Korean soldiers have been training in Russia and fighting in the Kursk region, and the country is "significantly benefiting" from receiving Russian military equipment, technology, and experience. This development could lead to an increase in North Korea's military capabilities and willingness to engage in military conflicts with its neighbours. Businesses and investors should be aware of the potential for increased tensions in the region and the possibility of further military action by North Korea.
Donald Trump's Threats over Greenland and Ukraine
Donald Trump's threats over Greenland and Ukraine could have significant implications for NATO. Trump has called for NATO allies to spend 5% of their national income on defence, which could plunge European governments into crisis mode. Additionally, Trump has threatened to seize Greenland by force, which could undermine the alliance's founding principle of Article 5. This development could lead to a rift within NATO and legitimise Russia's invasion of Ukraine. Businesses and investors should be aware of the potential for increased tensions within NATO and the possibility of further military action by Russia.
US Sanctions on Sudan's Rapid Support Forces (RSF)
The US has imposed sanctions on Sudan's Rapid Support Forces (RSF) and its leader, Mohamed Hamdan Dagalo, over allegations of genocide and human rights abuses. This development could have a significant impact on the Sudanese economy, as it will limit the country's ability to access international financial markets and trade. Additionally, the sanctions could lead to further instability in the region, as the RSF is a powerful paramilitary group that controls roughly half of the country. Businesses and investors should be aware of the potential for increased risks in the region and the possibility of further sanctions or military action by the US.
Further Reading:
America is building an impregnable Pacific island fortress against China - The Telegraph
Charlie Kirk Says Greenland Is Ready and Willing for a Trump Invasion - The Daily Beast
Donald Trump pushes back Ukraine war deadline in sign of support for Kyiv - Financial Times
Donald Trump's threats over Greenland and Ukraine could be a make-or-break test for NATO - Sky News
Keith Kellogg predicts Trump will accomplish 'near-term' solution to Russia-Ukraine war - Fox News
North Korea benefiting from troops fighting alongside Russia, US warns - The Independent
Russia is alarmed by Trump's Greenland plan - but it could work in the Kremlin's favour - Sky News
Themes around the World:
Geopolitical Events Driving Forex Market Movements
Global geopolitical developments, including conflicts and trade disputes, act as catalysts for rapid currency fluctuations. The UK’s currency and financial markets are sensitive to such events, with safe-haven flows and central bank responses shaping exchange rates. Understanding these dynamics is critical for investors and policymakers managing international financial risks.
Saudi Arabia’s Africa Engagement Strategy
Saudi Arabia is intensifying its strategic engagement in Africa focusing on critical minerals, agriculture, talent mobility, and soft power. Investments target infrastructure, renewable energy, and food security to diversify economic ties beyond hydrocarbons. This approach leverages long-term developmental partnerships, counters regional rivals, and opens new markets, aligning with broader geopolitical and economic diversification objectives.
Corporate Sector Performance and IPO Activity
Saudi companies have shown mixed financial results with some sectors reporting profits and others losses amid market volatility. Noteworthy IPOs include Jamjoom Fashion Trading on the Nomu market, indicating ongoing capital market activity. Corporate restructuring, capital increases, and strategic acquisitions reflect efforts to adapt to evolving market conditions and investor expectations.
Political Instability and Government Turnover
France faces unprecedented political instability with multiple prime ministers falling within a short period, including the recent loss of confidence in Prime Minister François Bayrou. This fragmentation hampers the government's ability to pass critical reforms, creating uncertainty that undermines investor confidence and complicates fiscal policy implementation, affecting economic stability and business operations.
Economic Fundamentals Amid Protests
Despite the political turmoil, Indonesian financial regulators assert that the country's economic fundamentals remain solid. The government plans incentive packages and monetary interventions to stabilize markets and support economic recovery, aiming to minimize the protests' impact on growth, which reached 5.12% annually in Q2 2025, thus maintaining investor confidence in the medium term.
Economic Contraction and Stagnation
Germany's economy contracted by 0.3% in Q2 2025, revised down from an initial 0.1%, marking a deeper slowdown. Key sectors like manufacturing, construction, and investment declined, while exports fell and imports rose, weakening trade balance. This stagnation risks a third consecutive year of contraction, undermining Germany's role as Eurozone growth engine and complicating recovery prospects until 2026.
Israel's Resilient Tech Economy
Despite ongoing conflict, Israel's high-tech sector remains robust, employing 11-14% of the workforce and contributing over 20% of GDP and 50% of exports. The country's innovation ecosystem, supported by government incentives and strong R&D investment, continues to attract foreign capital and sustain growth, making it a key driver of Israel's economic resilience and a focal point for global investors.
Legal and Ethical Risks for Businesses
Finnwatch's guidance warns companies operating in Israel and occupied territories of potential complicity in international law violations amid rising violence and humanitarian concerns. This elevates legal and reputational risks for multinational firms, urging enhanced due diligence and potentially influencing corporate strategies, supply chains, and investment decisions in the region.
U.S.-Mexico Political and Security Tensions
Rising diplomatic friction marked by Mexico's rejection of U.S. military strikes on cartels and disputes over DEA initiatives highlight strained bilateral relations. President Sheinbaum's firm stance on sovereignty and opposition to U.S. unilateral actions could impact cooperation on security and trade, potentially affecting cross-border supply chains and investor confidence.
Bond Market Stress and Yield Volatility
Japanese Government Bonds (JGBs) have experienced yield spikes, with 30-year yields breaching historic highs. Rising yields reflect fiscal deficit concerns and global bond market trends, causing recalibrations among institutional investors. This volatility impacts corporate borrowing costs, pension fund valuations, and overall financial market stability, with spillover effects on equity markets.
Sovereign Debt Issuance Amid Market Turmoil
Turkey's sovereign wealth fund proceeded with dollar-denominated bond issuances despite political and market turbulence. The issuance, including Eurobonds and sukuk, reflects efforts to secure financing without sovereign guarantees, testing investor appetite amid elevated risk premiums and shaken confidence in Turkish assets.
Chinese Investments via Private Equity Funds
China is increasing indirect investments in South Korea's strategic sectors through private equity funds (PEFs), raising economic security concerns. Regulatory loopholes and lack of transparency in ownership structures could allow Chinese capital to influence Korea's core technologies and supply chains, prompting calls for stricter oversight similar to the US CFIUS system.
Geopolitical Influence on Ukraine's Economic Trajectory
Ukraine's potential as a trade bridge between China and Europe was undermined by geopolitical conflict and Western military focus. The shift from economic development to militarization has led to massive human and economic costs, including a drastic GDP decline and demographic losses, limiting Ukraine's growth prospects and altering regional trade dynamics.
Renewable Energy Growth
Wind and solar power accounted for a record 34% of Brazil's electricity generation in August 2025, driven by rapid capacity expansion and supportive policies. This diversification reduces reliance on hydropower, enhances energy security, and creates economic opportunities. However, grid constraints and curtailments pose challenges, requiring strategic investments to sustain growth and attract further foreign capital.
Geopolitical Strategic Positioning
Pakistan's unique geography as both a pivot and rimland state places it at the center of global power dynamics. Its proximity to South Asia, Central Asia, the Gulf, and China makes it critical for regional stability, trade, and energy corridors. This elevated geopolitical profile offers opportunities for diplomatic leverage but also exposes it to regional conflicts and great power rivalries.
M&A Market Shift Towards High-Value Deals
UK merger and acquisition activity declined in volume and value amid market volatility, with investors prioritizing fewer but larger, high-quality deals focused on resilient sectors like industrials, financial services, and technology. This cautious approach reflects uncertainty but also highlights opportunities for strategic investments that can drive long-term growth once macroeconomic and geopolitical risks stabilize.
Dependence on China and Supply Chain Risks
Germany’s economic exposure to China, especially for critical raw materials, poses strategic vulnerabilities. Chancellor Merz emphasizes the need to diversify supply chains and reduce dependence to mitigate risks of geopolitical blackmail and ensure strategic sovereignty in trade and industrial inputs.
Social Inequality and Economic Discontent
Widespread protests reflect deep-rooted frustrations over inequality, inflation, mass layoffs, and perceived government corruption. These socio-economic issues threaten social stability and could lead to policy shifts increasing fiscal burdens, affecting business costs, consumer demand, and overall economic growth prospects.
Ukraine's Strategic Attacks on Russian Oil Infrastructure
Ukraine's intensified drone strikes on Russian oil refineries and export hubs have disrupted nearly half of Russia's seaborne crude exports, causing fuel shortages and price surges within Russia. These attacks undermine Russia's energy revenues, a key war funding source, while contributing to global oil market volatility. The strikes also provoke retaliatory measures, including export bans, affecting global energy supply chains and pricing dynamics.
Political Power Struggle and Instability
The suspension and treason charges against Vice President Riek Machar highlight deep political divisions and power struggles in South Sudan. This instability risks reigniting civil conflict, undermining governance, and deterring foreign investment due to heightened uncertainty and potential violence, severely impacting business operations and international trade.
Monetary Policy and Inflation Trends
Turkey's Central Bank is actively managing interest rates amid high inflation, which stood at 32.6% annually in August 2025. Recent rate cuts have boosted stock market optimism and foreign investment, but inflation remains above targets. Monetary policy decisions in coming months will critically influence economic stability and investor confidence.
Saudi Stock Market Volatility
The Tadawul All Share Index showed fluctuations with multiple sessions of declines and gains in August 2025, reflecting investor sentiment amid economic and geopolitical factors. Trading volumes ranged from $842 million to nearly $2 billion, with notable sectoral shifts impacting investment strategies. Market volatility affects capital allocation, risk assessment, and foreign investor confidence in Saudi Arabia.
Vietnam's Consumer Sentiment and Domestic Market Potential
Vietnam leads ASEAN in consumer sentiment with a score of 67, reflecting optimism about economic, political, and social stability. Rising private consumption, supported by wage growth and employment opportunities, bolsters domestic demand. This positive sentiment enhances the attractiveness of Vietnam's market for both local and foreign businesses, complementing export-driven growth.
Industrial Policy and Supply Chain Development
Thailand faces urgent need to revitalize its industrial policy to preserve export markets and develop global supply chain linkages, especially in electric vehicles and semiconductors. Consistent, long-term policies are essential to position Thailand as a competitive manufacturing hub, enhance technology transfer, and increase local content amid evolving global trade environments.
Impact of Low Oil Prices on Fiscal Policy
Declining oil prices, around $69 per barrel in mid-2025, have pressured Saudi Arabia’s fiscal balance, increasing budget deficits and prompting greater reliance on debt issuance, including Islamic dollar-denominated Sukuk. This fiscal strain challenges public spending on diversification projects and necessitates prudent debt management, influencing investor perceptions and macroeconomic stability.
South Korean Investment in the US
South Korean conglomerates have committed approximately $150 billion in US investments, creating nearly 1.66 million American jobs. This strategic shift responds to US tariff pressures by localizing production, but raises questions about the impact on domestic employment and industrial capacity within South Korea.
Economic Growth Slowdown
South Korea's economy is projected to grow only 0.9% in 2025, marking the slowest pace since the pandemic shock in 2020. This sluggish growth is driven by external pressures such as US tariffs and internal political instability, impacting export-reliant sectors like semiconductors and autos, with ripple effects on global supply chains.
Supply Chain Disruptions and Tariffs
US-imposed tariffs on imports from countries including China and India, alongside Mexico's protective measures against Chinese goods, disrupt supply chains. The elimination of import exemptions affects e-commerce platforms and manufacturing inputs, compelling companies to reassess sourcing strategies and cost structures amid rising trade barriers.
US Tariffs and Political Tensions
The US imposed a 50% tariff on most Brazilian imports as a political retaliation linked to legal actions against former President Bolsonaro. Despite the high nominal rate, exemptions and Brazil's commodity export profile limit economic damage. The tariffs have strained US-Brazil relations, pushing Brazil closer to China and strengthening President Lula's domestic position ahead of 2026 elections.
Uneven UK Economic Momentum and Sectoral Contraction
UK manufacturing and construction sectors continue to contract amid weak client confidence, rising labor costs, and tariff uncertainties, while services show modest growth. This uneven momentum constrains business investment and employment, posing challenges for economic recovery, supply chains, and investor sentiment, with implications for trade competitiveness and fiscal policy.
Oil Production Expansion and Export Strategies
Iran targets significant increases in oil and gas production, particularly in the West Karoun fields, leveraging low lifting costs and shared reservoirs with Iraq to sustain exports despite sanctions. Chinese and Russian firms play key roles in development projects. However, sanctions and geopolitical risks necessitate discounted pricing and complex export routes, impacting revenue stability and trade reliability.
Monetary Policy Amid Debt and Growth Concerns
The Bank of Korea has held interest rates steady at 2.5% amid rising household debt and housing market risks. While signaling potential rate cuts in the near future to support growth, policymakers remain wary of fueling asset bubbles. The central bank balances supporting economic recovery with financial stability, considering global inflation trends and domestic vulnerabilities.
Australian Dollar Strength and Drivers
The Australian Dollar (AUD) has reached multi-month highs, supported by robust commodity prices, especially iron ore, and improved Chinese economic indicators. The Reserve Bank of Australia’s cautious monetary policy stance and global risk-on sentiment further bolster AUD. Currency strength influences trade competitiveness, foreign investment flows, and multinational corporate earnings in Australia.
Impact of Political Instability on Supply Chains
Russia's 2022 invasion of Ukraine triggered global supply chain disruptions, including energy shortages and grain export restrictions. Political instability and government changes cause abrupt policy reversals, tariff shifts, and export controls, complicating compliance and increasing costs. Businesses must adopt proactive strategies to manage rapid regulatory changes and geopolitical risks affecting sourcing, production, and shipping.
End of U.S.-Led Global Order
The unwinding of the 80-year U.S.-led geopolitical order, alongside deglobalization and rising interest rates, marks a regime shift impacting investment strategies and global economic dynamics. This transition challenges traditional growth models, requiring companies to innovate and adapt to a more volatile and fragmented international landscape.
Iran's Strategic Pivot Eastward
Iran is deepening economic and diplomatic ties with China and Russia, seeking to counter Western sanctions. Engagements include participation in the Shanghai Cooperation Organization and strategic agreements aimed at reducing reliance on the US dollar and expanding transit infrastructure. These partnerships may offer alternative trade routes and investment avenues but remain transactional and subject to geopolitical constraints.