Global markets and geopolitics delivered a mixed but telling set of signals as the year draws to a close.
Sterling firmed on diverging rate expectations, London equities edged closer to record territory, and Sweden reported a rare breakthrough in its fight against gang violence.
At the same time, the war in Ukraine underscored persistent risks, with renewed Russian strikes on critical export infrastructure highlighting ongoing geopolitical and economic fragility.
Pound firms on rate outlook
Sterling reached its strongest level against the euro since mid-October on Tuesday, firming to 87.03 pence amid holiday-thinned trading volumes.
The pound also held steady against the dollar at $1.3518, hovering just below last week’s three-month peak.
With little breaking news to drive momentum between Christmas and New Year, the currency remains supported by diverging central bank expectations.
While the Bank of England recently cut rates, policymakers signaled a gradual approach to future easing, contrasting with expectations for continued cuts from the Federal Reserve.
However, Goldman Sachs analysts noted Tuesday that weakening UK labor data could eventually force the BoE to accelerate rate cuts in 2026.
Russia hits Ukraine grain ports
Russian forces launched a targeted strike on Ukraine’s Odesa region on Tuesday, damaging a Panama-flagged civilian grain vessel and oil storage facilities in the ports of Pivdennyi and Chornomorsk.
Deputy Prime Minister Oleksiy Kuleba confirmed the attack left one person wounded but noted that port operations remain active despite the disruption.
Kyiv condemned the strike as a deliberate attempt to cripple Ukraine’s logistics and export capabilities.
This latest escalation follows intensified maritime warfare in recent months, with Russia increasingly targeting port infrastructure while Ukraine deploys sea drones against Russia’s shadow fleet to counter the blockade.
FTSE near record as miners rally
London’s blue-chip FTSE 100 edged 0.4% higher in holiday-thinned trade on Tuesday, inching within striking distance of its record high as mining stocks rallied on stabilising metal prices.
The mid-cap FTSE 250 also crept up 0.2%, with volumes remaining light ahead of the New Year break.
Precious metals miners led the advance, with Fresnillo jumping 4.6% as gold recovered, while heavyweights Glencore and Rio Tinto provided support alongside banking majors.
Despite the calm session, the index remains on track for its strongest annual performance in 16 years, up over 21% in 2025. Markets close early on Wednesday for the holiday.
Sweden sees sharp shooting decline
Sweden recorded a dramatic 63% drop in shootings this year compared to its 2022 peak, signaling a potential turning point in the nation’s battle against gang violence.
Police data confirms 147 incidents in 2025, down roughly 50% from 2024, though the death toll held steady at 43.
Authorities credit the decline to aggressive new tactics, including proactive intelligence that thwarted dozens of planned attacks and stiffer penalties for gang involvement.
However, officials remain cautious, noting that while street-level gun violence has cooled, criminal networks are adapting by recruiting teenagers online and shifting tactics.
For a government under pressure to restore order, these figures offer the first concrete sign that the crackdown is working.
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