26-Nov-23 Blog

Frank Kelly’s Geopolitical Week Ahead | November 26, 2023

The COP28 climate summit begins this week in Dubai, where leaders worldwide will gather to discuss the next steps on climate change policy.

  • Israel-Gaza cease fire
  • COP28 climate summit in Dubai
  • U.S. Congress returns to work
  • Global economic data radar screen
  • U.S. financial regulatory week ahead

Israel-Gaza cease fire

The situation in Gaza continues to dominate the attention of global political leaders and the markets as a temporary pause in the war is scheduled to end today after three groups of hostages were released in the last few days. What happens now is unclear, as the cease-fire could continue if more hostages are released. U.S. Secretary of State Antony Blinken will return to the region this week to encourage continued negotiations. Conversely, Iranian President Ebrahim Raisi will visit Turkey and Syria to discuss the situation in Gaza. Raisi has been outspoken in his desire to rally the Muslim world in opposition to Israel and support Hamas. 

COP28 climate summit in Dubai

Also happening in the Middle East this week is the beginning of the COP28 climate summit in Dubai. The event will see leaders worldwide gather to discuss the next steps on climate change policy. But expectations are already muted due to the Gaza War and many global leaders who are not attending, including President Biden. 

U.S. Congress returns to work

Closer to home, the U.S. Congress returns to work this week following the Thanksgiving recess last week. They will continue to struggle to pass appropriations bills by the end of the year and come to a decision on how to pass a sizeable military assistance package for Israel along with a new military aid package for Ukraine. Tied up with this is Republican demands for more funding for border security for the U.S. southern border. A deal can be made if all three funding requests are tied up together, but getting to that point will take the better part of the week to iron out the details.

Global economic data radar screen

On the global economic data radar screen, it is a relatively quiet calendar of releases this week. Markets are watching for the Purchasing Managers' Index (PMI) reports from China, Japan, and the EU this week. Also closely watched will be U.S. personal income and spending data along with the personal consumption expenditure (PCE, which the Federal Reserve watches most closely to gauge inflation). 

Also, OPEC+ meets this week after delaying their scheduled meeting last week. African oil producing countries reportedly were resisting further cuts to production, which both Saudi Arabia and Russia have been advocating.

There will be several central bank speeches this week, led by ECB President Christine Lagarde on Monday before the European Parliament’s Committee on Economic and Monetary Affairs (ECON) and later in the week when she speaks at the ECB’s 5th Forum on Banking Supervision. Fed Chair Jay Powell will talk Wednesday and Friday at Spelman College in Georgia and Bank of England Andrew Bailey.

U.S. financial regulatory week ahead

Washington returns to work this week after a long (and hopefully relaxing) Thanksgiving holiday.  We are watching three major events – two of which come in sets – this week. 

  1. The first is in Frankfurt, Germany, at the Fifth ECB Forum on Banking Supervision 2023, a virtual “who’s who” of global financial regulators, bank CEOs, and leading financial members of the media. Fed Vice Chair Michael Barr will be among several major regulators speaking on various regulatory issues. Expect a spirited defense of new bank capital rules and the need for tighter global coordination on bank regulation.
  2. The second significant event of the week we are watching is two speeches Vice Chair Barr is giving in the U.S. addressing the Fed’s recently proposed changes to the Community Reinvestment Act. As we see it, these speeches are a continuation of a virtual barn-storming tour Barr is taking to defend the new measures as banks consider taking legal action to push back on the proposal.
  3. The third set of events we are watching this week is the testimony of Consumer Financial Protection Bureau Director Rohit Chopra before the House Financial Services Committee on Tuesday and then the Senate Banking Committee on Wednesday. We expect fireworks at both of these hearings.

Chopra has been pushing several regulatory agenda items that are, quite frankly, anathema to the financial services sector, which has, in turn, mounted a growing lobbying effort in Congress to step in and block the CFPB’s actions.   Chopra has a somewhat cantankerous relationship with House and Senate Republicans.  We can expect him to get a lot of questions about his effort and what knowledge – if any – of the unfolding sexual misconduct scandal at the FDIC, where Chopra sits on the board.  Recall that Chopra was instrumental in helping FDIC Chair Marty Gruenberg regain the chair and has been a solid ally to Gruenberg.


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About the author

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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