Lockdown, vaccines, and the costs of natural disasters have defined the first week of the year for many in the market.
However, in one fell swoop events in Washington DC have placed the rising threat of geopolitical risk to the top of the world’s agenda and it is not the events in Congress that are causing concern.
The impact of Brexit and the full implications of the eleventh hour trade deal are still to fully play out but Bank of England Governor Andrew Bailey has been forthright in his view that the UK’s financial services industry will not be constrained by EU rules.
The week has also seen a significant increase in tensions between Iran and the Western world as the country’s Atomic body has revealed that Iran has significantly enhanced its capabilities to enrich uranium.
The Atomic Energy Organization of Iran (AEOI) has claimed the country could easily enrich uranium to the 90 percent weapons-grade level if needed. It has prompted swift condemnation from France, Germany and the UK.
“We have made so much progress that we can easily produce enriched uranium at any level, even beyond this [20-percent] purity level, up to 40 percent, 60 percent, and 90 percent,” spokesperson for the AEOI, Behrouz Kamalvandi, announced to the world’s media.
The announcement came against a backdrop of the Gulf Cooperation Council states signing a “sustainability and solidarity” deal that will withdraw the three year-long blockade of Qatar for it’s close links with Iran. Worryingly while the blockage will now be lifted but few if any of the demands that had be made by those states, led by Saudi Arabia, to withdraw the blockade have been met. A key demand was for a distancing by Qatar from Iran, however, the past three years have seen the relationship strengthen.
It creates a major issue for incoming US President-Elect Joe Biden. He has pledged to look at how he can resurrect all or part of the Iranian nuclear agreement that President Trump scrapped before imposing punitive sanctions, but his aspirations go further.
He wants to see Iran reduce its influence in the region and scale down their missile capability. However, there is little at present that signals Iran is willing to concede any ground whatsoever.
President-Elect Biden also faces a major domestic problem with the violent scene which saw the storming of Congress this week having been roundly condemned.
Condemned they may have been but the violent protests amid allegations of electoral fraud and vote rigging are more akin to nations where a despotic ruler is desperately seeking to cling on to power, not the much vaunted home of democracy.
Many political watchers fear that the protests will not end at the Capitol Building and that there is a likelihood of further violent protests in the weeks to come.
With Pakistan announcing a series if new missile tests tensions with India may also be on the rise.
President Elect Biden will have his work cut out in the opening days and weeks of his Presidency and Israel may also have something to say about Iran enrichment capabilities.