by Bill O’Grady and Patrick Fearon-Hernandez, CFA | PDF
(N.B. Due to the Fourth of July holiday, our next geopolitical report will be published on July 18.)
As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year. It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward. They are listed in order of importance.
Issue #1: The Russia-Ukraine War
Issue #2: Xi as China’s President for Life
Issue #3: The Global Food Crisis
Issue #4: Weather Disruptions
Issue #5: Latin American Politics
Issue #6: The U.S. Midterms
Issue #7: Fed Policy and the Dollar
Quick Hits: This section is a roundup of geopolitical issues we are watching that haven’t risen to the level of the concerns described above but should be monitored.
by Patrick Fearon-Hernandez, CFA, and Bill O’Grady | PDF
Don’t miss the accompanying Geopolitical Podcast, now available on our website and most podcast platforms: Apple | Spotify | Google
Over the past month, unrest has developed in Kazakhstan. The unrest began as protests against rising fuel prices, but it soon blossomed into broader, more widespread, and violent civil disorder that had the appearance of an inter-elite conflict. Although Central Asia doesn’t usually garner the world’s attention, instability in the region could affect larger countries, such as China, Russia, and India. The volatility in Kazakhstan was also something of a surprise as the country has tended to be stable during its period of independence since the fall of the Soviet Union.
Despite being often overlooked by the Western media, Kazakhstan is an important country. It’s a major oil producer and the world’s dominant supplier of uranium. Oil prices, already elevated, rose further on fears that the Kazakh disorder would lead to additional supply disruptions. Uranium and associated equities also rose in price on the reports. In this report, we begin with some background on Kazakhstan, including a short history and a discussion of the region’s role in Russia’s imperial behavior. We next delve into the reasons for the January unrest and the way it played out for Kazakh and Russian leaders. As always, we conclude with market ramifications.