Deutsche Bank Lifts UK GDP Forecast for 2026 to 1.2%

The United States is blocking Spain from key preparatory meetings for the upcoming G-20 summit, a move that signals the Trump administration's continued willingness to reshape the global order by sidelining traditional allies.

Washington is hosting the gathering of the world's leading economies on December 14-15 at President Donald Trump's Miami golf resort. Using its position as host, the administration is curbing input from countries like Spain, which are not official G-20 members but are typically invited to participate.

This tactic is becoming a hallmark of the White House's foreign policy, which increasingly shuts out allies on the world stage, particularly those that do not align with its demands.

A Pattern of Pressure on Allies

The decision regarding Spain is not an isolated incident. The US has already taken similar steps against other nations:

• South Africa: Barred from attending this year's G-20 summit after the country's leadership disputed President Trump's false claims that White Afrikaners were facing genocide.

• NATO Allies: The administration is also rebuffing overtures from NATO partners that have refused Trump's demands to facilitate the handover of Greenland, a semi-autonomous Danish territory.

Spain has had its own points of friction with the Trump administration. The country was the only NATO ally to reject a US-backed initiative to spend 5% of its gross domestic product on defense. Madrid also forcefully criticized Trump for his strike that deposed Venezuelan leader Nicolas Maduro.

"Spain is not a team player," Trump commented last year.

Spain's G-20 Role Sharply Reduced

As a result, Spanish officials are now excluded from all preparatory and ministerial meetings for the G-20 summit, according to two people familiar with the plans. These sessions are critical, as they are where most of the substantive work and negotiations for the event are conducted.

A Spanish government spokesperson confirmed that Prime Minister Pedro Sanchez will still attend the main leaders' summit in December.

Sources familiar with the decision, who requested anonymity, said the move is part of a broader US campaign to narrow the G-20's agenda to economic issues and shrink the number of participating countries. A White House statement confirmed that other traditional non-member invitees, such as Egypt and the Netherlands, were also excluded from the first preparatory meeting in December.

The White House did not respond to a request for comment. The story was first reported by the newspaper El Confidencial.

Rewarding Friends, Punishing Foes

The administration's approach creates a sharp contrast in how it treats different nations. While South Africa, a full G-20 member, faced a US boycott of the Johannesburg summit it hosted last year, other countries have been welcomed.

US Secretary of State Marco Rubio criticized South Africa in December, writing that its "economy has stagnated under its burdensome regulatory regime driven by racial grievance."

In contrast, the US has extended an invitation to Poland for this year's summit. Trump officials have actively courted the country, which is a major defense spender in NATO and boasts a growing economy. Notably, Poland was the only non-G-20 country present at the December planning meeting.

"Poland's success," Rubio wrote, "shows how partnership with the United States and American companies can promote mutual prosperity and growth."

The Political Context in Madrid

Spain is the last major European nation led by a socialist, Prime Minister Pedro Sanchez, who governs with the support of left-wing parties that are highly critical of both the United States and NATO.

Furthermore, Spain has maintained ties with Nicolas Maduro's regime in Venezuela, even though it does not recognize his victory in the widely disputed 2024 election. Former Spanish Prime Minister Jose Luis Rodríguez Zapatero, also a socialist, has strong connections to the Maduro government and has served as an intermediary in Venezuela for years. Just last week, the government in Caracas thanked him for his role in mediating the release of political prisoners.

In fact, research by RBC bank shows the Aussie dollar now enjoys the highest level of 'carry' in the G10, having recently surpassed the pound.

Above: AUD performance in 2026.

Source: Poundsterlinglive

China has suspended its imports of electricity from Russia, with sources citing high prices as the primary cause, according to a report from the Kommersant newspaper. While the Chinese government has not yet commented, Russia’s energy ministry stated its priority is meeting rising domestic demand but confirmed it is ready to resume sales if new terms are reached.

The decision to halt supplies was not clarified as originating from China or Russia. However, Russia's energy ministry noted it could restart exports "if it receives a corresponding request from Beijing and if mutually beneficial cooperation terms are reached."

Moscow Cites Domestic Needs, Keeps Door Open

InterRAO, Russia's state-backed power supplier to China, confirmed that discussions are ongoing and that neither party intends to terminate their long-term contract.

"At present, the parties are actively exploring opportunities for electricity trade," the company stated, adding that its Chinese counterparts have not expressed any interest in ending the agreement.

Despite this, the Kommersant report squarely links the pause to a price disparity, suggesting that Russian power has become more expensive than China's domestic electricity.

Russia's official position centers on its own energy needs. The energy ministry emphasized that serving the growing power demand in Russia's Far East is its main focus.

A Sharp Decline Preceded the Halt

The recent suspension is the culmination of a steady decline in Russian electricity exports to China. This trend has been driven by system constraints and a power capacity shortage in Russia's Far East.

The supply figures show a clear downward trajectory:

• 2022: Exports reached a record high of 4.6 billion kilowatt-hours.

• 2023: Supplies fell to 3.1 billion kilowatt-hours.

• 2024: Exports declined further to 0.9 billion kilowatt-hours.

• First Nine Months of 2025: Only 0.3 billion kilowatt-hours were delivered.

These exports are governed by a 25-year contract signed in 2012 for the delivery of approximately 100 billion kilowatt-hours. The interstate transmission lines connecting the two countries have the capacity to deliver up to 7 billion kilowatt-hours annually.

The South African rand is experiencing its most sustained period of gains against the U.S. dollar in more than two decades, driven by a powerful combination of high commodity prices and a strengthening economic outlook.

The currency is poised for its eighth consecutive weekly advance, a winning streak not seen since December 2002. Over this period, the rand has strengthened by 6.1%, according to Bloomberg data.

Precious Metals and Policy Fuel the Rally

While record-high prices for gold and silver have provided a significant cyclical boost, analysts point to deeper structural changes as the primary drivers of the currency's sharp appreciation.

"Possibly, the main cyclical factor is the commodity tailwind," said Burak Baskurt, chief emerging markets strategist at BNP Paribas. "But structural factors mostly explain the sharp appreciation."

These underlying strengths include recent economic reforms and the central bank's disciplined monetary policy. Last year, policymakers adopted a lower inflation target, which has reinforced investor confidence that the country will maintain its favorable interest-rate differential with the United States.

High Interest Rates Offer Attractive Returns

With South Africa's policy rate at 6.75% and annual inflation forecast to be around 3.6%, the country offers a real interest rate of over 3%—an attractive real return for investors. Upcoming economic data is expected to confirm that inflation has likely peaked.

This positive outlook is shared by market strategists. "We see further gains for the rand and expect rates and bonds to rally further due to low inflation," wrote Societe Generale strategists, including Phoenix Kalen and Marek Drimal, in a recent note.

The optimism has spilled over from the currency markets. South Africa's benchmark equity index climbed over 2% this week, reaching a record high on the back of a rally in mining shares.

Brazil's economy expanded much faster than expected in November, posting its strongest growth in months and complicating the central bank's path toward lowering interest rates. The robust performance adds new pressure on policymakers who are trying to balance growth with inflation control.

Economic Activity Outpaces All Forecasts

Data released on Friday showed the central bank's economic activity index, a leading indicator for gross domestic product (GDP), rose by 0.68% from the previous month. This figure easily surpassed the 0.4% median estimate from a Bloomberg survey of analysts and marked the largest monthly increase since March.

Compared to the same month a year earlier, the index was up 1.25%, confirming a solid underlying momentum in the economy.

Central Bank's Dilemma on High Interest Rates

The stronger-than-expected data creates a challenge for monetary policy. Economists and traders have been watching for signs that the central bank has room to start cutting its benchmark Selic rate, which has been held at 15%—a level not seen in nearly two decades.

While inflation has been moving closer to the official target, policymakers have so far refused to signal when they might begin an easing cycle. This latest report gives them another reason to remain cautious.

Inflationary Pressures Persist

The central bank's cautious stance is reinforced by several factors that could keep inflation elevated. A hot jobs market continues to support demand, while analysts expect President Luiz Inacio Lula da Silva to ramp up public spending this year.

This anticipated fiscal stimulus, viewed as a strategy to secure support for a potential fourth term, is already pressuring forecasts for consumer price growth and making the case for near-term rate cuts more difficult.

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.