An Extraordinary Year.
Higher on the other side.
Holiday Schedule: We’ll be off for the remainder of the week. Distribution restarts on Monday, 5 January 2026. Happy New Year to one and all.
1. Wonders never cease. President Xi Jinping declared China’s economy is set to hit its growth target in 2025, after what he called an “extraordinary year.” China’s gross domestic product is expected to expand by around 5% this year, Xi told an annual gathering held by the country’s top political advisory body, according to the official Xinhua News Agency. “China’s economy is forging ahead under pressure, moving toward innovation and quality, demonstrating strong resilience and vitality,” Xi told an annual meeting of the Chinese People’s Political Consultative Conference. “The growth rate is expected to reach around 5%, continuing to rank high among the world’s major economies.” (Source: bloomberg.com)
2. The U.S. stock market is closing out 2025 near a record high, with the S&P 500’s 17% gain vaulting the index toward its seventh-best three-year run on record. The years-long rally appeared to end abruptly in the spring with the rollout of President Trump’s “Liberation Day” tariffs and the emergence of “Sell America” trades that bet on the U.S.’s retreat from the world stage, only to roar back to life within weeks. The slowdown foreseen by many on Wall Street never materialized in full. Tariff exemptions and a slew of trade deals have limited the inflationary effects of the highest import taxes in decades. And an artificial-intelligence arms race has triggered a capital-spending boom of epic proportions, propelling growth, minting millionaires—and leaving the U.S. stock market even more top-heavy than before. (Source: wsj.com)
3. The US dollar is heading for its steepest annual drop since 2017, with Wall Street banks predicting further weakness next year as the Federal Reserve presses ahead with interest rate cuts. The greenback has slumped 9.5 per cent against a basket of major currencies this year, after US President Donald Trump’s trade war sparked fears for the world’s biggest economy and cast doubt over the dollar’s traditional status as a haven for investors. The euro has had the biggest gain of the major currencies against the faltering dollar, surging nearly 14 per cent to above $1.17, a level last reached in 2021. (Source: ft.com)
4. Institute for the Study of War (ISW):
The Kremlin continues to offer no evidence to support its claims that Ukrainian drones targeted Russian President Vladimir Putin’s residence on the night of December 28 to 29 and even rejected the notion that it should provide evidence. Kremlin Spokesperson Dmitry Peskov stated on December 30 that he does not think there “should be any evidence” of a massive Ukrainian drone strike targeting Putin’s residence, likely referring to his residence in Valdai, Novgorod Oblast. Peskov responded to a follow-up question about whether the drone strike left any debris that could be evidence, stating that he “cannot say” and that this question is a matter for the Russian military. (Source: understandingwar.org. Italics mine.)
5. ISW:
The Kremlin is moving forward with efforts to mobilize active reservists compulsorily, likely to eventually deploy reservists to combat in Ukraine as Russia continues to suffer a disproportionately high casualty rate compared to its territorial gains. Russian President Vladimir Putin signed a decree on December 30 to authorize the deployment of active reservists to special training camps to ensure the protection of critical facilities starting in 2026. Ukrainian Commander-in-Chief Colonel General Oleksandr Syrskyi stated that Russia fulfilled its 2025 plan to recruit 406,000 personnel but that Russian losses amounted to 410,000 or more personnel. ISW has observed evidence indicating a Russian presence (either through assaults or infiltration missions) in 4,899.75 kilometers in 2025 — indicating that Russian forces have sustained at least 83 casualties per square kilometer. ISW continues to assess that the Kremlin’s ongoing efforts to mobilize reservists for likely deployment to Ukraine in the future further indicate that Russia is facing compounding pressure to sustain its force generation requirements through the legacy system that uses high financial incentives to recruit volunteers due to a lack of volunteers, a lack of resources to fund the payouts, or both. The Kremlin’s efforts to deploy reservists to Ukraine are a domestically risky policy threatening to break the Kremlin’s ongoing social contract with the population, and the Kremlin would likely not pursue this force generation method unless necessary. (Source: understandingwar.org)
