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Mission Grey Daily Brief - February 24, 2025

Summary of the Global Situation for Businesses and Investors

As the third anniversary of Russia's invasion of Ukraine approaches, President Volodymyr Zelenskyy has offered to step down in exchange for NATO membership and lasting peace for his country. President Donald Trump has made concessions to Russia, including agreeing to normalise relations and excluding NATO membership for Ukraine. Meanwhile, Germany is facing a shift to the right in its federal election, with Elon Musk intervening in support of the far-right Alternative für Deutschland (AfD), sparking outrage and accusations of interference. In Gaza, Hamas has freed three more Israeli hostages, marking the final phase of the initial ceasefire agreement. Lastly, a suspected terrorist was arrested in France after killing one person and injuring five others in a knife rampage, prompting calls for stronger action against radicalisation and deportation failures.

Ukraine-Russia Conflict

The third anniversary of Russia's invasion of Ukraine is approaching, and the Ukrainian President Volodymyr Zelenskyy has made a startling offer to step down in exchange for NATO membership and lasting peace for his country. This offer comes amid rapid changes in U.S. foreign policy under President Donald Trump, who has made several concessions to Russia, including agreeing to normalise relations and excluding NATO membership for Ukraine.

Zelenskyy's offer is a sign of the extreme pressure he is under as the US hurries to hatch a peace deal with Moscow. The Trump administration has made several concessions to Russia, including agreeing to normalise relations after bilateral talks in Saudi Arabia last week, while excluding NATO membership for Ukraine. Trump described Zelenskyy as a "dictator" and blamed Kyiv, rather than Moscow, for starting the war.

Russia launched its biggest drone strike against Ukraine on Sunday, firing 267 drones against multiple targets across the country. Ukrainian officials say Washington is also trying to strong-arm Zelenskyy into signing a deal that would award the US large amounts of the proceeds from extracting Ukrainian mineral deposits. Zelenskyy has pushed back against the Trump administration's demands, rejecting the idea of a minerals "partnership" with the US and arguing that it would not provide adequate security guarantees.

Zelenskyy has expressed fears that Trump pushing a quick resolution would result in lost territory for Ukraine and vulnerability to future Russian aggression. Preparations are underway for a face-to-face meeting between Trump and Russian President Vladimir Putin, marking a clear departure from Western efforts to isolate Moscow over its war on Ukraine.

German Federal Election

Germany is facing a shift to the right in its federal election, with Elon Musk intervening in support of the far-right Alternative für Deutschland (AfD), sparking outrage and accusations of interference. Musk has repeatedly intervened in support of the AfD, including publishing a supportive guest opinion piece for the country's Welt am Sonntag newspaper and hosting a virtual encounter with AfD leader Alice Weidel.

Musk's open calls for German voters to back the AfD, which federal authorities classify as a suspected extremist party, have sparked outrage and accusations of troubling interference in Europe's top economy. Government spokesperson Christiane Hoffmann has confirmed that Musk is trying to influence the federal election.

Musk has often weighed in on German politics, even calling the chancellor, Olaf Scholz, a "fool" on his social media platform X. Last month, Musk made a supportive speech at a campaign event for the AfD in Halle, eastern Germany, telling attendees that Germany was too focused on past guilt and that the AfD was the best hope for the country.

Israel-Hamas Ceasefire

In Gaza, Hamas has freed three more Israeli hostages, marking the final phase of the initial ceasefire agreement. The six Israelis scheduled for release are Eliya Cohen, Omer Shem Tov, Omer Wenkert, Hisham Al-Sayed, Tal Shoham, and Averu Mengistu. Hamas handed over two Israeli hostages to the Red Cross, and three more Israeli hostages were escorted by masked, armed Hamas fighters and made to pose on a stage before hundreds of Palestinians in the central town of Nuseirat.

Israel is set to release 600 Palestinian prisoners who were detained from Gaza since October 7. Earlier in the day, the militant group finally handed over the body of Israeli hostage Shiri Bibas. Her family confirmed the identification, stating, "Last night, our Shiri was returned home." Initially, Hamas had claimed to have returned Bibas' remains alongside those of her two sons and another hostage on Thursday. However, forensic tests revealed that the body said to be hers was, in fact, that of an unidentified Palestinian woman.

Netanyahu strongly criticised the group, stating in a video message that "In an unspeakably cynical way, they did not return Shiri to her little children, the little angels, and they put the body of a Gazan woman in a coffin. We will act with determination to bring Shiri home along with all our hostages - both living and dead - and ensure that Hamas pays the full price for this cruel and vicious violation of the agreement."

France Terrorist Attack

A suspected terrorist was arrested in France after killing one person and injuring five others in a knife rampage, prompting calls for stronger action against radicalisation and deportation failures. The suspect was reportedly on France's Terrorist Radicalization Prevention Reporting File (FSPRT) and had previously been sentenced to six months in prison for posting a social media video calling for jihad, or "holy war".

French President Emmanuel Macron has since declared the incident "an Islamist terrorist act" and vowed to continue efforts "to eradicate terrorism on our soil." Far-right politicians were quick to slam the government's handling of radicalisation and deportation failures, calling for stronger action to control borders, strip jihadists of citizenship, expel radical imams, and sever ties with nations that support fundamentalists.

Saturday's horrific rampage follows a string of Islamist attacks in Europe, including a Syrian refugee in Berlin allegedly attempting to slit the throat of a Spanish tourist at the Holocaust Memorial and an Afghan asylum seeker ploughing his car into a crowd of demonstrators in Munich, killing a mother and her two-year-old daughter.


Further Reading:

German election live: voters head to polls amid fears over Ukraine security, Trump and rise of far right

Hamas frees 3 more Israeli hostages

Moment suspected ‘terrorist’ is arrested after killing one and injuring 5 in horror knife rampage in French town

Russia launches largest drone attack on Ukraine on eve of third year of war

Three More Israeli Hostages Freed By Hamas As Gaza Ceasefire Deal Advances

Trump-Putin summit preparations are underway, Russia says

Zelenskyy Says 'Ready To Step Down' As President In Exchange For NATO Membership For Ukraine

Zelenskyy offers to step down in exchange for peace and Nato membership

Zelenskyy offers to step down in exchange for peace and Ukraine’s Nato membership

Themes around the World:

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Monetary easing and credit conditions

The central bank cut rates by 100 bps (deposit 19%, lending 20%) and lowered reserve requirements to 16%, aiming to support growth as inflation moderates. Funding costs may ease, yet FX sensitivity and administered-price reforms can still affect financing and demand forecasts.

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Macrostimulus, FX and policy uncertainty

With 2026 growth likely ~4.5–5% and deflation concerns, policy may tilt toward consumption support, fiscal easing and managed yuan flexibility. Businesses should plan for sudden stimulus-driven sector boosts, regulatory fine-tuning, and FX hedging needs for RMB revenues and costs.

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US tariff shock and volatility

The US has imposed a temporary 15% blanket tariff (up from 10%) for up to 150 days, despite the Australia–US FTA, adding pricing and contract uncertainty for roughly A$24bn of exports and complicating US market planning and investment decisions.

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Escalating sanctions and shadow fleet

U.S. “maximum pressure” is tightening on Iran’s oil and petrochemical exports, targeting 14 tankers and dozens of entities while partners like India step up interdictions. Elevated secondary-sanctions exposure raises freight, insurance, compliance costs and disruption risk for global shipping and traders.

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Financial isolation and FATF blacklisting

FATF renewed Iran’s blacklist status and broadened countermeasures, explicitly flagging virtual assets and urging risk-based scrutiny even for humanitarian flows and remittances. This further constrains correspondent banking, raises settlement friction, and increases reliance on opaque intermediaries—complicating trade finance and compliance for multinationals.

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Macro-finance uncertainty: rates and dollar

Markets remain sensitive to Fed signaling, sticky services inflation, and Treasury issuance dynamics, supporting volatile yields and a firm dollar at times. This affects cross-border financing costs, hedging, commodity pricing, and investment hurdle rates for US-facing projects.

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Vision 2030 spending recalibration

PIF is resetting its 2026–2030 strategy toward industry, minerals, AI and tourism while re-scoping mega-projects like NEOM’s The Line amid fiscal pressure from lower oil prices. Investors should expect shifting procurement pipelines, timelines and counterparties across giga-project supply chains.

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Monetary easing amid weak growth

Inflation fell to 3.0% in January (services 4.4%) and unemployment rose to 5.2%, lifting expectations of a March Bank Rate cut from 3.75% to 3.5%. Shifting rates affect GBP, borrowing costs, hedging, and demand forecasts for exporters and investors.

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State asset sales and SOE restructuring

Egypt is preparing 60 state companies—40 for transfer to the Sovereign Fund of Egypt and 20 for stock-market listing—aiming to expand private participation. This creates M&A and PPP opportunities, but governance, valuation, and execution timelines are key risks.

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Transport-logistics PPP opportunity wave

The Ministry of Investment is marketing 45 transport and logistics opportunities, including PPP greenfield airports, truck stops, maritime crew zones, feeder vessels to East Africa, MRO facilities and logistics parks. This creates near-term contracting demand, but success depends on bankability, tariffs and permitting.

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EU Climate Trade Rules (CBAM)

The EU’s Carbon Border Adjustment Mechanism tightens reporting and cost exposure for imports of carbon-intensive inputs (e.g., steel, cement, aluminum). Germany-based manufacturers and importers face compliance upgrades, supplier switching, and pricing impacts as definitive-phase obligations expand.

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Yaptırım uyumu: İran bağlantıları

ABD, İran’ın ‘gölge filo’ petrol taşımaları ve silah tedarik ağlarıyla bağlantılı Türkiye’deki şirket ve şahıslara yeni yaptırımlar uyguladı. Enerji, lojistik, kimya ve finans işlemlerinde karşı taraf riski yükseliyor; bankacılık uyumu, sigorta ve sevkiyat rotaları maliyet artışı yaratabilir.

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China trade friction re-emerges

Australia’s use of anti-dumping tariffs on Chinese steel products signals a firmer trade-remedy posture. While narrow in scope, it raises escalation risk with Australia’s largest export market and could affect sectors exposed to China demand, customs clearances, and political signaling.

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Tariff volatility and legal risk

Supreme Court limits emergency-tariff powers, but Washington pivoted to Section 122 (up to 15% for 150 days) and broader Section 232/301 tools. Importers face whiplash on duty rates, refund uncertainty, and contract/pricing re-negotiations.

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Yaptırım uyumu ve ikincil riskler

ABD’nin İran ‘gölge filo’ ve tedarik ağlarına yönelik son yaptırımlarında Türkiye bağlantılı kişi/şirketler de anıldı. Bu, bankacılık, denizcilik, kimya ve makine ticaretinde KYC, ödeme kanalları ve yeniden ihracat kontrollerini sıkılaştırma ihtiyacını büyütüyor.

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Escalating US tariff regime

Average US import tariffs rose to about 13% in 2025 (from ~2.6% in 2024), with studies finding ~90–95% of costs borne domestically. Rapidly shifting sector tariffs (notably metals) heighten pricing volatility, contract risk, and sourcing reconfiguration.

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China beef quotas disrupt agritrade

China imposed a 1.106 Mt 2026 beef quota for Brazil at 12% tariff, with a 55% tariff beyond. Brazil exported 119,630 t to China in January alone; Brasília is weighing internal allocation controls to avoid trade-flow disorder, price shocks, and contract disputes.

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US tariff pact uncertainty

Taiwan’s signed US Agreement on Reciprocal Trade lowers tariffs to 15% and exempts 1,735 categories, but ratification and evolving US legal bases (Sections 122/232/301) create policy volatility. Firms should hedge pricing, routing and contract terms.

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Oil export revenues weakening sharply

January oil-and-gas tax receipts fell to 393bn rubles ($5.1bn) from 587bn in December and 1.12tr in Jan 2025. Wider Urals discounts and disrupted India flows compress margins, increasing fiscal pressure and policy unpredictability for businesses operating in Russia.

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Export growth targets versus headwinds

Vietnam targets US$546–550bn exports in 2026 (+15–16%), after a 2025 record US$475bn and total trade over US$930bn. Heavy reliance on foreign-invested exporters and imported inputs increases vulnerability to demand swings, logistics shocks, and tighter standards.

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Strike disruptions across logistics

A renewed strike cycle is hitting transport and services: Lufthansa cancellations reached ~800 flights affecting ~100,000 passengers, while further rail and public‑sector actions are possible from March. Recurrent stoppages raise lead times, logistics costs and contingency needs.

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Property downturn and demand drag

Housing prices keep falling (62/70 cities down; -3.1% y/y, -0.4% m/m), sustaining weak sentiment and deflation risk. Slower consumption affects luxury, retail, services, and B2B demand, while developers’ stress raises counterparty and project-completion risks.

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Tariff Rationalisation, Customs Digitisation

Union Budget 2026 links indirect taxes to manufacturing and export competitiveness: tariff rationalisation, fewer exemptions, longer export windows, and new customs tech. Single-window approvals, AI scanning, CIS rollout and AEO duty deferral reduce border friction and working-capital strain.

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Maquila/IMMEX bajo presión competitiva

El sector maquilador enfrenta menor competitividad y proyectos en pausa por la revisión del T‑MEC. Se reportan 672 programas IMMEX cancelados y casi 600.000 empleos perdidos; aranceles a insumos asiáticos (25–50%) y certificaciones lentas dificultan sustitución de importaciones.

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EU Chemicals Protection and Competitiveness

Europe is moving to shield chemicals amid high costs and import pressure. The EC imposed antidumping duties on ABS (5.2–21.7%) and BDO (52.4–142.5%); Cefic estimates 37 Mt/y capacity closures since 2022 and 20,000 jobs lost, influencing feedstock pricing and investment decisions.

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BOJ tightening, yen volatility

Markets now price BOJ hikes toward 1% by mid-2026, while officials signal readiness to curb disorderly FX moves near ¥160/$, raising hedging costs and earnings volatility for exporters, importers, and Japan-based treasury centers managing multi-currency supply chains.

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Energy security and transition

Vietnam is revising national energy planning to support ≥10% GDP growth, projecting final energy demand of 120–130M toe by 2030. Tight power balances and grid buildout pace can disrupt factories, while renewables/LNG and possible nuclear plans create investment opportunities.

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Trade finance isolation and FATF blacklist

Iran remains on the FATF “call for action” blacklist, constraining correspondent banking and increasing de‑risking by global banks. This elevates AML/CFT due diligence burdens, pushes trade into barter or informal channels, and complicates receivables, escrow, and documentary trade instruments.

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Power surplus, price volatility risk

Weak demand and rising renewables increase periods of low/negative prices and force nuclear output modulation; EDF warns higher maintenance needs and added costs (≈€30m/year) if electrification lags. Volatility affects PPAs, hedging strategies, and industrial competitiveness planning.

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Cross-border data transfer liberalization

Indonesia’s ART commitments support cross‑border data flows with protections, prohibit forced tech transfer or source‑code disclosure, and back the WTO e‑transmissions duty moratorium. This improves operating certainty for cloud, fintech, and e‑commerce, while PDP compliance remains.

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Railway concession pipeline reshapes freight

The government plans eight rail auctions through 2027 covering >9,000 km and ~R$140bn in investments, but projects face licensing, STF/TCU scrutiny, and bankability constraints. If executed, freight costs and route optionality improve; if stalled, bottlenecks persist.

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Gümrük rejimi değişimi ve e-ticaret

6 Şubat 2026’da 30 avro altı basitleştirilmiş gümrük uygulaması kaldırıldı; tüm gönderilerde detaylı beyan zorunlu. Temu, yerel ithalatçı modeliyle geri döndü ve 580 TL alt limit koydu. De minimis reformu KOBİ ithalatçıları, e-ticaret lojistiği ve maliyet yapısını kalıcı değiştiriyor.

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Broader mineral export-ban expansion

Indonesia is considering extending raw-material export bans beyond nickel and bauxite to additional minerals (e.g., tin) to force domestic processing. This raises policy and contract risk for traders while creating opportunities for investors in smelters, refining, and industrial-park infrastructure.

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Higher-for-longer rate uncertainty

The RBA lifted the cash rate to 3.85% and signalled data-dependent risk of further tightening as inflation stays above target. Higher borrowing costs and a firmer AUD affect capex timing, consumer demand, and hedging for importers and exporters.

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Labor localization tightening (Saudization)

New Nitaqat and profession-specific quotas raise Saudi hiring requirements, including 60% Saudization in key sales/marketing roles from April 2026, plus tighter job-title restrictions. Multinationals face higher payroll costs, talent shortages in niche skills, and operational risk if noncompliant.

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USMCA renegotiation and North America risk

Signals of a tougher USMCA review and tariff threats elevate uncertainty for integrated US‑Canada‑Mexico manufacturing, notably autos and batteries. Firms should stress-test rules-of-origin compliance, cross-border inventory strategies, and contingency sourcing as negotiations and enforcement become more politicized.