Inflation, which led central banks to raise interest rates in 2022 and 2023, is once again worrying investors as the prospect of Donald Trump fulfilling his electoral promises looms. These promises include tax cuts and increased tariffs.
The cautious stance adopted by the Federal Reserve (Fed) in its latest meeting, where it opted to slow down rate cuts, has heightened market concerns. Bank of America’s latest fund manager survey, released just before the Fed's announcement, identified inflation as one of the primary concerns, alongside the potential for a global trade war.
It is worth noting that an expansive policy in the US could generate inflation, prompting the Fed to raise interest rates to control it, thereby affecting markets and the economy.

SEOUL SLUMPS AMID POLITICAL TURMOIL AND A WEAKENING WON

The South Korean won fell on Thursday to its lowest level in over fifteen years against the US dollar, following the South Korean opposition’s move to table a motion seeking to impeach Han Duck-soo, the country’s acting President and Prime Minister, in the coming days. This situation has impacted South Korean market giants like Samsung Electronics.

US TARIFFS ON CHINA CONTINUE

The US has launched a new investigation aimed at increasing restrictions on China.
The investigation, initiated under Section 301 of the 1974 Trade Act, could result in additional tariffs on older Chinese chips used in everyday products such as cars, washing machines, and telecommunications equipment.
US Trade Representative Katherine Tai stated that the investigation would help safeguard competition in the US market and ensure that China does not dominate the global semiconductor market. These tariffs would add to the 50% tariff on Chinese chips set to take effect on January 1. Reuters reported that China's Ministry of Commerce expressed concerns about potential disruptions to global chip supply chains arising from the investigation.

NVIDIA CONTINUES TO BREAK RECORDS

Nvidia has repeatedly surpassed a $3 trillion market capitalization, alternating places with Apple as the most valuable publicly traded company. In its latest quarter, it reported revenues of $35.1 billion, with $30.8 billion—or 87%—attributed to its data centre business. These figures highlight the enormous role artificial intelligence (AI) and cloud computing now play in driving its success. CEO Jensen Huang has been at the forefront of this expansion, becoming one of Silicon Valley's most sought-after executives.
Central to Nvidia’s ongoing growth is its powerful Blackwell chip, specifically designed for AI applications.
The Blackwell chip is expected to generate billions of dollars in revenue during the fourth quarter alone, representing a significant leap in computing power.
Companies like Amazon have already begun adapting their data centres to accommodate the immense heat output of these processors, underscoring strong demand for Nvidia's products.

CHINA: A LEADER IN ELECTRIC VEHICLE SALES

Electric vehicle sales in China are expected to surpass internal combustion engine cars for the first time next year, marking a historic turning point that places the world’s largest automotive market years ahead of its Western counterparts. China is set to exceed international forecasts and Beijing's official targets, with domestic electric vehicle (EV) sales—including pure battery and plug-in hybrid models—projected to grow around 20% year-on-year to surpass 12 million units in 2025, according to estimates from four investment banks and research groups provided to the Financial Times. This figure would more than double the 5.9 million units sold in 2022.
At the same time, sales of traditional combustion engine cars are expected to fall by over 10% next year to fewer than 11 million, reflecting a nearly 30% drop from 14.8 million in 2022. Meanwhile, EV sales growth has slowed in Europe and the US, reflecting the auto industry's slower adoption of new technologies.

CHINA INVESTS IN DOMESTIC CONSUMPTION

On Tuesday, China unveiled a decade-long plan to boost grain consumption and develop the industry through stricter production standards, research, and international cooperation, as part of efforts to enhance food security. China is the world's largest grain producer, with 652 million tonnes in 2024. However, it remains reliant on imports of maize, wheat, and other grains to feed its 1.4 billion inhabitants. For example, China imports large volumes of higher-quality wheat from Canada, Australia, and Russia for pasta and bakery products. As the world’s largest grain buyer, China imported 59.08 million tonnes of grain and flour in 2023. Increasing domestic production and quality could reduce China's demand on the global market. RUSSIA: INFLATION HAS NO CEILING Inflation continues to trouble Russia. In his year-end press conference, Vladimir Putin acknowledged that inflation, a key indicator of economic overheating, remains a problem. Business elites are reportedly furious with Central Bank Governor Elvira Nabiullina after she raised interest rates to a record 21%. With inflation standing at 9.5%, the Russian Central Bank is keen to curb it as quickly as possible.

Last week, the Central Bank decided to maintain rates at their current level and hinted at potential hikes in the new year. Critics argue that high rates are stifling business activity and the economy by making it harder for companies to secure loans for operations and investment.

RUSSIA-US TALKS LOOM

President Vladimir Putin has expressed willingness to engage in dialogue to find a diplomatic resolution with Ukraine and to discuss matters with Donald Trump. At the same time, he boasted about Russia's new hypersonic missile and invited the US to attempt intercepting it. According to Putin, the new hypersonic ballistic missile Oreshnik could defeat any US missile defence system in a "duel." UK intelligence services have indicated that the Oreshnik missile, launched last week by Russia against the Ukrainian city of Dnipro, represents a "strategic message" from Moscow.

FRANCE FACES MORE TROUBLE: NO SUPPORT FOR BAYROU

The new French Prime Minister faces record levels of unpopularity.
Just one week into his role, François Bayrou has a historically high disapproval rating. According to an Ifop survey published by Journal du Dimanche, 66% of French citizens expressed dissatisfaction with Bayrou, appointed by President Emmanuel Macron on 13 December.

RUSSIA BETS ON BITCOIN TO BOOST INTERNATIONAL TRADE

Russian businesses have begun using Bitcoin and other digital currencies for cross-border payments following new laws permitting such transactions. Finance Minister Anton Siluanov made the announcement on national television on Wednesday. Reuters reports that this move comes as Western sanctions complicate trade with key partners like China and Turkey. The Russian government views Bitcoin as a legitimate tool to circumvent sanctions and conduct real-time cross-border trading. WORLD COIN EXPANDS WORLDWIDE World (formerly Worldcoin) continues its aggressive expansion in Latin America despite resistance, with World ID registrations increasing in Colombia, Brazil, the Dominican Republic, Argentina, and other countries. The company, led by Sam Altman, reported its expansion into Mexico, where it already has over 450,000 verified users. World announced it now has 20 million global users who have downloaded its World App.

MICROSTRATEGY KEEPS BETTING BIG ON BTC

MicroStrategy purchased 5,262 Bitcoins for $561 million, continuing its aggressive January strategy following its recent inclusion in the NASDAQ-100. Saylor’s BTC buying spree remains strong, with recent acquisitions totalling $1.5 billion.

USDT BANNED IN EUROPE FROM 30TH DECEMBER

Starting on 30th December, exchanges within the European Union will be required to remove USDT from their platforms due to the implementation of the MiCA Regulation. Meanwhile, USDC, which complies with regulatory requirements, is taking centre stage in the European market. With the full implementation of the Markets in Crypto-Assets Regulation (MiCA Law), Europe is making a significant shift in the use of stablecoins, leaving USDT—one of the most popular stablecoins globally—out of the regional landscape.

Why was it banned? The strict requirements of the MiCA Law have made it unviable for USDT to remain in Europe. The regulation mandates that stablecoins listed on centralised exchanges must be issued by entities with an electronic money licence and maintain at least two-thirds of their reserves in independent banks. For this reason, platforms such as Binance and OKX have already delisted USDT, and the remaining exchanges have until 30th December to comply with this regulation.