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Frank Kelly’s Geopolitical Week Ahead | January 12, 2025

1/12/2025

The Trump cabinet nominees get confirmation hearings, Iran’s President meets with Russian President Putin while Germany, France, and UK meet with Iran over their nuclear program, and earnings season in the U.S. kicks off.

Francis (Frank) J. Kelly

Founder & Managing Partner, Fulcrum Macro Advisors LLC and Senior Political Strategist for DWS

Cabinet confirmation hearings
Iran’s President to meet with Putin
Germany, France, and UK to meet with Iran over their nuclear program
Earnings season in the U.S. kicks off

The geopolitical and geoeconomic radar screens will be full this coming week. This is the last week of the Biden Administration with the U.S. Presidential Inauguration, one week from Monday.

Cabinet confirmation hearings

The U.S. Congress is already moving quickly on many fronts in advance of the incoming Trump Administration, as almost all of President-elect Trump’s cabinet nominees will have their confirmation hearings held this week. The hearings will give markets a richer sense of many of Trump’s policy proposals – how they will be carried out by the respective nominees, cost, timelines, etc.

We are anticipating fairly quick action on a number of them and the very real possibility that Secretary of State-designate Marco Rubio and Treasury Secretary-designate Scott Bessent will be confirmed by Inauguration Day, allowing them to be sworn into office the same day President Trump (which is the historical norm).

Iranian President to meet with Putin

The agreement includes a new North-South Corridor, which allows for greater trade and energy cooperation between the two countries.

Germany, France, and UK to meet with Iran over their nuclear program

While the above is going on, diplomats from France, Germany, and the UK will meet with Iranian diplomats in Geneva, Switzerland, to again try to persuade Iran from further enriching uranium that could be used in nuclear weapons. The three European countries were signatories to the 2015 nuclear pact (along with the U.S., Russia, and China), which President Trump exited in 2018. It is unlikely Iran will agree, especially with President Trump coming back into office and the face of the multiple foreign policy and military setbacks Tehran has suffered in recent months (the massive degrading of their proxy militias Hamas and Hezbollah and the fall of Syrian strongman and Iranian ally Bashar al-Assad and his regime.

In Asia, Japan’s Foreign Minister Takeshi Iwaya will be conducting important meetings in South Korea, the Philippines, and the Island nation of Palau, seeking mutual security arrangements as China gets more active and aggressive in the region.

Global economic radar screen

Turning to the busy global economic agenda this week:

U.S. – In their first full trading week of the New Year, U.S. markets are looking at the CPI release on Wednesday, the PPI print on Thursday, and the Fed’s publishing of the Beige Book in advance of the Fed’s Open Market Committee meeting on January 29. Also out this week are the retail sales report and industrial production data. All this comes as corporate earnings season kicks off in the U.S..
Mexico -- Mexican President Claudia Sheinbaum will be announcing a major new public-private sector plan to boost investment in Mexico. Markets are looking for details of the plan to get a sense of the newly inaugurated Sheinbaum’s overall economic policy focus.
Europe -- The European Central Bank releases its account of the last interest meeting. The UK has CPI, PPI, and RPI reports coming on Wednesday.
Asia -- China has all-important trade data released on Monday and Q4 GDP figures on Friday, while Japan also releases trade data and bank lending information.

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Francis (Frank) J. Kelly

Frank is the Founder and Managing Partner of Fulcrum Macro Advisors LLC, a political risk advisory firm based in Washington, DC. He is the senior political strategist for DWS.

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Frank Kelly’s Geopolitical Week Ahead | January 12, 2025

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