|

Geopolitical radar: Another military conflict erupts

In this month's edition we conclude that while the Trump administration has paused most Liberation Day tariffs, uncertainty, in many ways, remains very high. The US-China trade talks are set to begin, which is positive. Same time, a new military conflict has erupted in Asia, between arch enemies India and Pakistan.

In our editorial, we discuss how the BRICS has become the unexpected defender of the multilateral world order. The expanded BRICS+ soon makes up 40% of global GDP and represents roughly half of the world population. So, it is understandable these countries want a bigger say on global matters. A key objective for the BRICS+ is to challenge the dominance of the US dollar in the financial system. That challenge remains: almost 90% of daily FX transactions globally involve US dollars, app. 50% of payments are made in USD, and close to 60% of central bank reserves are held in dollars. Renminbi's shares in each are 7%, 4% and 2% respectively.

But as the Trump administration makes no distinction in how it punishes enemies and allies, the BRICS+ call for a more multipolar world is as appealing as it gets. Interestingly, attitudes in the West may have shifted as well. A good example is that China is really making an effort to ease tensions with the EU, and the EU seems responsive. BRICS+ has a long way to go and it may never become a credible challenger to the US-dominated financial system, but if there was ever a point in time such a momentum could start to build, this might be it.

In our Ukraine update, we wonder how long Russia can sustain the current high casualty rate, and whether Trump loses patience in the peace talks. In our China section, we outline our base scenario for where the tariffs are likely to land if and when the US and China have reached an agreement. In our Middle East update, we write about how Israel has again expanded its offensives, not just in Gaza but also in Syria. The only positive is that the Trump administration blocked Israeli plans to target Iranian nuclear facilities, and is pursuing a diplomatic path instead.

As always, interesting developments under the radar as well: the India-Pakistani conflict, the UK-India trade deal and the fluid Sudan proxy war.

Download The Full Geopolitical Radar

Author

Danske Research Team

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

More from Danske Research Team
Share:

Editor's Picks

AUD/USD seems vulnerable near 0.6800, 10-month low amid bullish USD

AUD/USD languishes near a 10-month low during the Asian session on Friday, awaiting a break below 0.6800 before the next leg up amid a bullish US Dollar. Firming Fed rate-hike expectations, along with fading hopes for US-Iran diplomacy, help the USD hold gains at its highest level since April 2025. Moreover, the RBA’s dovish tilt undermines the Aussie and backs the case for further losses.

USD/JPY bulls turn cautious near 160.00 amid intervention risks

USD/JPY enters a bullish consolidation phase around its highest level since early September as bulls turn cautious amid intervention risk near 160.00. Meanwhile, the downside seems cushioned as the wide US-Japan interest rate gap keeps the Yen carry trade active. Furthermore, the possibility of a jumbo Fed rate hike and Middle East uncertainties hold the US Dollar near a 19-month top, supporting the currency pair.



Gold remains on the back foot below $3,900

Gold now alternates gains with losses below the $3,900 mark per troy ounce on Friday. The precious metal struggles to regain traction amid the firmer US Dollar, mixed US Treasury yields and expectations of further tightening by the Fed at its December meeting.

Bitcoin just posted five straight losing weeks, and the storm may not be over yet

Bitcoin is struggling to find support, slipping below $70,000 as multiple headwinds threaten to push the Crypto King lower. The much-anticipated “Uptober” rally failed to materialize, with persistent selling pressure and widespread liquidations instead reinforcing the “Rektober” narrative.

Week ahead – Fed Minutes, inflation data and Nvidia earnings to guide investors

Fed minutes may add to hawkish tone as bets of 50-bps hike grow. Nvidia to report earnings as bar to impress high after spy scandal. Trade and geopolitics to be focal point of Trump-Xi summit.

Gold hit its lowest level of 2026 near $3,850
Gold (XAU/USD) attempts to stabilize around $3,890 on Friday after falling to $3,852 on Thursday, its lowest level since October 2025. The precious metal has lost more than 4% this week, as investors increasingly anticipate further monetary tightening from the Federal Reserve (Fed). The latest decline reflects a sharp change in market expectations.