Weekly PROPHET NOTES 3/10/25
Global Outlook: Saudi deals and SOTU speeches
Welcome to another week! Last one was one of these where nothing much happened in terms of action, but a lot of announcements were made that will have impact in the coming weeks.
This year the focus is still on the US, Europe (an Ukraine) as well as growing Chinese threats. By now this is the bread and butter stable situation. Well, nothing I can do about it, but try to forecast the direction of the next global events. So subscribe below and hop on the journey!
Weekly Outlook
Last week was full of headlines from basically every region.
US Inc.
Starting with US Inc., here Trump had a speech on the joint session of the Senate, which was just short of another rally speech. Maybe he misses the campaign?
Anyway, a plethora of domestic issues was mentioned with special focus on the immigration, along with some foreign policy plans around Ukraine and shipbuilding capabilities. The speech lasted somewhere around 1.5 hours, but it was predominantly fluff.
From the important news for the future, today there is supposed to be another meeting in Saudi Arabia, this time between the US representation and Ukraine. It is expected that the reconstruction deal will be signed there.
The Americas
Moving to the Americas, Trump has achieved his objective of “liberating” Panama Canal from Chinese influence - a consortium led by BlackRock has agreed to buy a majority stake in the company running ports on both ends of the canal till 2047.
From further south, the American Treasury revoked a license that allowed Chevron to export oil from Venezuela. Chevrons JV with the state run oil company represented ca. 25% of Venezuelan oil output so a hard hit to an already struggling economy is expected.
Lastly in Canada, Mark Carney has officially succeeded Justin Trudeau. Way more centrist than other candidates for the Liberal Party leadership, he is bound to bridge the current polling gap between them and the conservatives. All of a sudden, the upcoming Canadian election got interesting.
Asia
China seems to enjoy the tariff game as well - they have just announced tariffs on Canadian food products as a retaliation from last year’s EV, steel and aluminium tariffs from Canada.
Middle East & Africa
Middle East is where it was really busy last week. For starters, the Kurdistan Workers’ Party said it would stop fighting after 40 years of conflict with Turkey asking for a ceasefire between them and Turkey. Seems like the US has silently agreed with Turkey to stop supporting the Kurds.
In the meantime, the group behind the new Syrian government, HTS, has been recorded on videos murdering Syrian Alawites, historically strong supporters of the Assad regime, despite promising not to do so. In a surprising move, the EU has condemned Alawite aggression (sic!).
Coming around to Gaza, Trump is now pushing for the release of the remaining hostages after Izrael cut off aid to Gaza. Not much is known about plans going forward, as Phase 2 of the ceasefire is nowhere to be seen (as expected) and Trump’s Gaza reconstruction plan has not been accepted by anyone, with even Britain, France, Germany and Italy endorsing the Arab plan with two-state solution. I still think the war will continue.
Lastly, Iran has rejected the threat from Trump to end the nuclear program and no new deal is in sight.
Europe
Europe is now scrambling to define itself, but the work seems hard. For now the European leaders agreed to create a €150 billion fund to spend on defense. Additionally Macron has floated nuclear protection by France, which Poland is especially eager to take. Another summit is approaching…
On the same note, German new leader apparent announced plans to loosen the country’s debt brake and proposed that defense spending be exempt from the debt limits. Yields didn’t take the news lightly, soaring on the markets after the announcement.
Business, Finance & Economics
Coming to business, Trump has finally implemented the tariffs on Mexico and Canada that he has been threatening since day 1. He also increased tariffs on China by another 10%. In response, the Chinese embassy to the US has challenged US Inc., claiming they are ready for war, be it trade or other in a turn from their usually timid diplomacy.
On the same note, Trump is now not hiding that all the trade wars may impact the economy in a bad way, warning of a detox period. Markets already feel that, erasing all the gains since he won the election. Crypto even more so, where many are seeing the bear market already.
One good thing from Trump is that oil prices are steadily falling. Additionally OPEC+ has decided to raise output, putting further downward pressure on oil prices.
Moving to Europe, the ECB has announced a 25bps cut, but also signaled that it might be the last one for a while. Current policy was changed to reactionary. On the same conference, Lagarde also said that the euro CBDC will be ready to be deployed this October for both wholesale and retail. Not sure about you, but I’m a strong critic of digital centralized currencies and this announcement only made me more eager to leave Europe (coming this year anyway).
Markets
That’s all for the week. I’m eagerly awaiting the announcements form Saudi Arabia today. Now I move to markets, this time a short selection, reflecting not much real action from last week.
Keep reading with a 7-day free trial
Subscribe to PROPHET NOTES to keep reading this post and get 7 days of free access to the full post archives.