Brazil's Surprise Economic Surge Delays Rate Cut Hopes

India and the European Union are finalizing a long-negotiated free-trade agreement that will selectively open India's market to some EU agricultural goods while strictly excluding items that could threaten the livelihoods of domestic farmers.

A senior official in New Delhi confirmed the development on Friday, emphasizing that products posing a competitive disadvantage to Indian farmers will not be part of the deal. The official spoke on the condition of anonymity as the discussions are still in progress and did not specify which products would be included.

Why India Is Cautious on Farm Imports

India's careful approach to agricultural trade is deeply rooted in domestic politics. Farmers represent a massive and influential voting bloc in the nation, where millions of smallholders cultivate less than two hectares (five acres) of land. This makes them particularly vulnerable to competition from international markets.

Protecting this demographic has long been a "red line" for New Delhi in trade talks, a policy that remains firm even as the government pursues agreements with more urgency.

Responding to Global Trade Pressures

The push for greater access to India’s agricultural sector is not new. Major economies, including the United States, have consistently pressed India to lower its barriers. New Delhi’s motivation to secure new trade partnerships has grown since Washington imposed 50% tariffs on certain Indian goods.

However, the government's protective stance on agriculture remains consistent. Last month, after securing a trade pact with New Zealand, India's trade minister highlighted that the agreement successfully "protected" the interests of the country's farmers.

What's Next for the India-EU Agreement?

Both India and the EU are keen to finalize a deal soon, but sticking points persist in other sensitive areas, including automobiles and steel.

Momentum for the agreement is building, with expectations high for a potential announcement later this month. European Commission President Ursula von der Leyen and European Council President António Luís Santos da Costa are scheduled to visit India, a move that could signal the final stages of the negotiation process.

U.S. President Donald Trump looks on as he signs executive orders and proclamations in the Oval Office at the White House, in Washington, D.C., U.S., May 5, 2025. REUTERS/Leah Millis/File Photo

Describing President Donald Trump as an "authoritarian," a federal judge said on Thursday he will issue an order aimed at protecting academics who challenged the arrest and deportation of non-citizen, pro-Palestinian activists on college campuses.

At a hearing in Boston, U.S. District Judge William Young outlined an order he will issue in a week that seeks to prevent the administration from changing the immigration status of any academics in the case who are themselves non-citizens.

Any such change by the administration would be presumed to "be in retribution for their participation in this lawsuit," the judge said. Young said he would then require the government to prove in court it was seeking to deport them for "appropriate" reasons.

In a September ruling, opens new tab that sharply criticized Trump's actions, the judge concluded the departments of State and Homeland Security violated the U.S. Constitution's First Amendment by chilling the free speech of non-citizen academics at universities nationally.

"The big problem in this case is that the cabinet secretaries, and ostensibly, the president of the United States, are not honoring the First Amendment," Young said.

Young, who was appointed by Republican President Ronald Reagan, called the administration's abridgment of First Amendment rights "appalling," and said top officials under Trump had adopted "a fearful approach to freedom."

"We cast around the word 'authoritarian,'" Young said. "I don't, in this context, treat that in a pejorative sense, and I use it carefully, but it's fairly clear that this president believes, as an authoritarian, that when he speaks, everyone, everyone in Article II is going to toe the line absolutely."

Article II is the part of the Constitution governing the executive branch.

White House spokesperson Anna Kelly in a statement called it "bizarre that this judge is broadcasting his intent to engage in left-wing activism against the democratically-elected president of the United States." The administration previously said it would appeal Young's September decision.

The judge said he would limit the reach of his order to members of academic associations including the American Association of University Professors and the Middle East Studies Association that challenged the administration's actions.

Those groups had sought an order blocking the administration's practices nationally, but Young said that was "overbroad."

The lawsuit was filed last year after immigration authorities in March arrested recent Columbia University graduate Mahmoud Khalil, the first target of Trump's effort to deport non-citizen students with pro-Palestinian or anti-Israel views.

The Homeland Security Department, in announcing Khalil's arrest, cited executive orders Trump signed in January 2025 directing federal agencies to "vigorously" combat antisemitism after college campus protests over Israel's war in Gaza.

Since then, the administration has canceled the visas of other students and scholars and arrested several, including Rumeysa Ozturk, a Tufts University student who was taken into custody in Massachusetts after co-writing an opinion piece criticizing her school's response to the Gaza war.

Both have since been released from immigration custody at the direction of federal judges hearing challenges to their detention. A federal appeals court on Thursday overturned the ruling in Khalil's case, opening the door to his eventual re-detention. He plans to appeal.

Source: Reuters

A new forecast from Bank of America projects the U.S. economy will see robust growth in 2026, driven by a powerful combination of fiscal stimulus, Federal Reserve policy, and a potentially more growth-friendly trade environment.

BofA analysts now expect the U.S. gross domestic product (GDP) to expand by an average of 2.8% this year, significantly higher than the consensus outlook of 2.1%. This optimistic view is based on an updated analysis of key economic drivers expected to shape the year.

While the forecast anticipates a stronger first half of the year, growth projections for the second half have been lowered compared to BofA's previous estimates.

Fiscal Stimulus Fuels First-Half Momentum

A major pillar of the upgraded forecast is the expected consumer stimulus from President Donald Trump's signature budget legislation, the "One Big Beautiful Bill," passed last July. The bill is estimated to add as much as 0.4 percentage points to GDP growth this year through consumer spending and capital expenditure incentives.

Key provisions driving this tailwind include an increased cap on state and local tax deductions and an additional standard tax deduction for older Americans.

Furthermore, the conclusion of a prolonged government shutdown is expected to provide a one-time boost to economic activity, particularly in the first quarter.

The Lagged Effect of Fed Rate Cuts

Economic activity in 2026 is also set to benefit from the Federal Reserve's monetary policy decisions from the previous year. Analysts argue that the 75 basis points in interest rate cuts enacted last year will begin to buoy the economy.

Those reductions, which brought the Fed's target rate range down to 3.50% to 3.75%, were implemented to support a slowing labor market even as inflation remained elevated. The full impact of these cuts is now expected to filter through the economy.

A Positive Outlook on Trade Policy

BofA suggests that President Trump's aggressive trade policies could become more supportive of economic growth this year, regardless of an upcoming landmark Supreme Court decision on the legality of his tariffs. The analysts outline two distinct but positive scenarios:

• If the tariffs are struck down: This would act as an implicit fiscal easing, as the government would issue refund payments and the effective tax rate would likely decline.

• If the tariffs are upheld: Trade uncertainty would likely dissipate significantly. The administration would be expected to prioritize securing trade deals over announcing new tariffs ahead of the November midterm elections.

AI Investment Provides a Solid Foundation

Beyond specific policy actions, the ongoing strength in artificial intelligence-related investment is expected to provide a stable backbone for the economy. This trend, which observers noted as a key support for the wider economy throughout 2025, should "continue to grow at a solid pace," according to the analysts.

Russian President Vladimir Putin speaks at a press conference in Moscow on December 19, 2025.

Russia has described the Trump administration's threats to take over Greenland as an "extraordinary" development that challenges global norms, confirming it will continue to monitor the situation.

Kremlin spokesman Dmitry Peskov commented on the matter Friday, stating, "The situation is unusual, I would even say extraordinary from the standpoint of international law," according to the Russian state news agency Ria Novosti.

US Cites National Security Concerns

The remarks follow statements from U.S. President Donald Trump about acquiring Greenland, a self-governing Danish territory. Trump's interest in the island emerged after a military operation on January 3 to depose Venezuelan President Nicolas Maduro.

According to the U.S. administration, gaining control of Greenland is a matter of national security. Washington claims it is the only power capable of countering an alleged threat posed to the island by Russia and China.

Peskov directly referenced the U.S. president's approach to global rules, noting that Trump "has said that international law is not a priority for him." He added, "The situation is developing along a different trajectory, and we, along with the rest of the world, will be watching to see which one."

Broader Criticism from Moscow

This is not the first time Russia has pushed back on the U.S. narrative. Earlier in the week, Russian Foreign Ministry spokesperson Maria Zakharova called it unacceptable to frame Moscow and Beijing as threats to Greenland, accusing the West of applying double standards.

A spokesperson for the Kremlin was not immediately available for comment when contacted by CNBC.

A Geopolitical Shockwave in Global Energy

A stunning operation in Venezuela on January 3 saw U.S. forces capture socialist leader Nicolás Maduro, an event that could reshape global energy markets for the next decade. Following the move, President Donald Trump announced that the United States would not only spearhead the rebuilding of the nation's collapsed oil infrastructure but also assume indefinite control over its crude exports.

This decisive action signals a potential opportunity for investors, but it also introduces significant geopolitical risks. The move has been framed as a modern revival of the Monroe Doctrine, a nearly 200-year-old U.S. policy asserting dominance in the Western Hemisphere and warning foreign powers against interference.

This 21st-century version, dubbed the "Trump Corollary" or "Donroe Doctrine," serves as a direct message to China and Russia that Latin America's resources, particularly its oil, are not open for their influence. President Trump stated his intentions plainly: "We're going to be using [Venezuela's] oil, and we're going to be taking oil."

The administration is already moving to market and sell 30 to 50 million barrels of Venezuelan crude, with President Trump directly controlling the proceeds. Energy Secretary Chris Wright confirmed a long-term strategy, stating the U.S. will sell Venezuelan oil "indefinitely," starting with existing storage and expanding to future production.

This policy directly challenges China, Venezuela's largest oil customer and Latin America's biggest trading partner since 2020. With extensive investments in regional ports, telecom, and power grids—including 37 port projects and $13 billion in credit lines—Beijing is unlikely to cede its influence easily.

The Challenge of Reviving a Broken Industry

Venezuela's vast resource wealth stands in stark contrast to its current output. The nation sits on over 300 billion barrels of proven oil reserves, the largest in the world and representing nearly one-fifth of the global total. Yet, due to decades of corruption and mismanagement, its production has collapsed. Once producing 7 to 8 million barrels per day, the country now accounts for just 1% of global oil supply, with output below 1 million barrels daily.

Reversing this decline presents a monumental task. The energy consultancy firm Rystad estimates that restoring Venezuela's oil production to levels from 15 years ago will require up to $110 billion in capital expenditure. To put that figure in perspective, it is double the entire global spending of all U.S. oil majors in 2024, according to a CLSA report.

Recognizing this financial hurdle, President Trump announced that the government would reimburse oil companies for their efforts to get the country's operations "up and running." He told NBC News, "A tremendous amount of money will have to be spent, and the oil companies will spend it, and then they'll get reimbursed by us or through revenue."

Corporate Resistance and Operational Hurdles

Despite government assurances, major industry players remain cautious. ExxonMobil, whose assets have been seized twice by Venezuela in the past, has expressed significant reservations. During a roundtable with the administration, CEO Darren Woods described the country as "uninvestable" without fundamental changes to its legal system and hydrocarbon laws. President Trump dismissed these concerns as "cute" and suggested he might block Exxon from operating in Venezuela.

Beyond capital, the industry faces a severe human resources crisis. Tens of thousands of skilled engineers and geologists have fled the country. Many also stripped equipment, vehicles, and copper wiring from the state-run oil company, Petróleos de Venezuela, before leaving. Furthermore, much of Venezuela's crude is ultra-heavy, requiring specialized processing and naphtha blending before it can be transported.

Market Reactions and Investment Outlook

News of Maduro's removal triggered a strong positive reaction in financial markets. Chevron, the only U.S. major currently operating in Venezuela, was the best-performing stock in the Dow Jones on January 5, surging as much as 10% during intraday trading before closing up approximately 5%. The company, which exports about 140,000 barrels a day from the country, is reportedly negotiating with the U.S. government for an expanded license to increase exports to both American refineries and third-party buyers.

Defense contractors in both the U.S. and Europe also saw their stocks climb following the events.

The return of Venezuelan oil to the global market is expected to increase supply, which would likely put downward pressure on crude prices. While this could be problematic for OPEC, it would benefit U.S. consumers, refiners, airlines, and shipping companies.

For investors navigating this new landscape, several areas warrant attention:

• Selective Energy Stocks: Companies with existing or potential exposure to Venezuela's reopening, such as Chevron, may see benefits.

• Defense Sector: Geopolitical tensions suggest maintaining an overweight position in defense stocks. This view is reinforced by discussions of a potential military takeover of Greenland and a push to raise the 2027 U.S. military budget to $1.5 trillion.

• Gold as a Hedge: A 10% portfolio allocation to gold, split between physical bullion and high-quality gold mining stocks, remains a recommended strategy for hedging against uncertainty.

A woman holds a sign bearing South Korean national flag with a portrait of former President Yoon Suk Yeol, as they wait for his arrival for the final arguments in his insurrection trial, at a court in Seoul, South Korea, January 13, 2026. REUTERS/Kim Hong-Ji

Former South Korean President Yoon Suk Yeol is due to face the first court ruling on Friday stemming from criminal charges over his failed martial law attempt, a case that could result in a long prison sentence if he is found guilty.

Yoon could receive a sentence of up to 10 years in jail if he is convicted on charges that include obstructing officials from executing an arrest warrant against him in January when he barricaded himself inside his residential compound and ordered the security service to block investigators.

He was finally arrested in a second attempt involving more than 3,000 police officers. His arrest was the first ever for a sitting president in South Korea.

Yoon, who is currently being held in the Seoul Detention Center, also faces allegations of falsifying official documents when he declared martial law in December 2024, claiming he planned to restore democratic order to the country that was under siege from the majority opposition and "anti-state" forces.

Separately, Yoon faces a number of other trials, including on a charge of masterminding insurrection. Prosecutors have asked the court to give him the death sentence on this charge, with a ruling scheduled for February.

Parliament, joined by some members of Yoon's conservative party, voted within hours to overturn his surprise martial law decree and later impeached him, suspending his powers.

He was removed from office in April last year by the Constitutional Court that ruled he violated the duties of his office.

While his bid to impose martial law lasted only about six hours, it sent shockwaves through South Korea, which is Asia's fourth-largest economy, a key U.S. security ally and long considered one of the world's most-resilient democracies.

Source: Reuters