Global military expenditure witnessed a significant rise of 7% in 2023, marking the steepest annual increase since 2009. The Stockholm International Peace Research Institute (SIPRI) attributed this surge to deteriorating international peace and security. The United States, China, and Russia remained the top military spenders, with Russia increasing its budget by 24% and Ukraine receiving substantial military aid.
Goldman Sachs’ strategists have highlighted the potential of the Dollar and Swiss Franc as hedges against inflation and geopolitical uncertainties. They have adjusted their Euro forecast, signaling a bearish outlook, and revised their EUR/USD target to 1.05. The analysis suggests that these currencies have shown resilience to rate sell-offs and are likely to maintain their strength given ongoing concerns about inflation and global tensions.
The U.S. stock market is poised to end a six-day losing streak on Monday, boosted by positive risk sentiment and easing geopolitical tensions. Major indices traded higher at noon in New York, with modest gains anticipated ahead of a week filled with crucial earnings reports from Visa, Tesla, Meta, Microsoft, and Alphabet. Gold prices plunged 2.5%, marking their most significant single-day decline since June 2022, while silver tumbled 5% in its worst daily performance since October 2022. Bitcoin rose above $66,000, on track for its highest close in over a week.
Global military spending hit a record high in 2023, with a 6.8% increase to $2.4 trillion. The United States, China, and Russia remain the top spenders, while Europe, the Middle East, and Asia have seen significant increases. The Ukraine conflict has fueled spending not only in Ukraine and Russia but also in European countries. Geopolitical tensions in the Middle East have also driven up defense spending in the region, with Israel among the largest spenders.
Brent crude oil prices have plunged to a four-week low of 86.50 USD on Monday due to a combination of factors including reduced geopolitical tensions, rising US crude oil inventories, and global economic uncertainties. The easing of tensions between Iran and Israel has contributed to the decline, as Iran is a major OPEC oil producer whose exports play a crucial role in global oil markets. The unexpected surge in US crude oil inventories has further pressured prices, while concerns about prolonged elevated interest rates by the Federal Reserve have also dampened the outlook for oil demand. However, the stability of the US dollar has prevented steeper declines in oil prices.
