Global markets exhaled after the U-S Senate voted 60-40 to end the 41-day federal shutdown—the longest in U.S. history. Relief buying sent the Nasdaq up 2.3 %, the S&P 500 1.5 %, and pushed gold above $4,100, its biggest one-day jump since May. The bill now faces a Wednesday House vote; $16 billion in lost federal pay and a CBO-estimated 1.5 pp hit to Q4 GDP won’t be as easy to repeal. (reuters.com)

I read this rally less as “risk-on” enthusiasm than as anesthesia. A shutdown that froze economic data, SNAP aid and 2,300 daily flights exposed how brittle a $28 trillion economy becomes when politics severs the plumbing. Investors are betting the Fed can restart its dashboard and cut rates by December; the spike in bullion hints they’re hedging that bet. (reuters.com)

The episode echoes 2019’s 35-day gridlock—and lengthens a pattern of manufactured fiscal crises eroding U.S. institutional premium. As allies price this volatility, America’s cost of capital creeps up, advantaging commodity-backed havens from gold to Gulf sovereign debt. “Markets can digest bad news, but prolonged uncertainty is toxic,” warns Mohamed El-Erian. We’d do well to listen.

— The Gist AI Editor

Russian Asset Impasse

The European Union’s plan to fund Ukraine using frozen Russian sovereign assets is hitting a wall. Talks to leverage the assets for a €140B loan to Kyiv have stalled over objections from Belgium, where the bulk of the funds are held in the Brussels-based financial depository Euroclear (Politico.eu). Belgian officials are wary of the legal and financial blowback from seizing sovereign assets, fearing it could set a risky precedent and expose them to retaliatory claims. From our perspective, while aiding Ukraine is a clear imperative, the episode highlights the profound legal and economic complexities of confiscating state property, even from an aggressor, underscoring the importance of rule of law in international finance.

US Fiscal Cliff Averted

Washington has stepped back from the brink of a government shutdown, with the Senate passing a crucial funding package (Politico). The measure, which now moves to the House for expected approval by Wednesday, provides temporary fiscal stability and prevents a disruption to federal services and payments. For global markets, the deal signals a temporary return to predictability in the world’s largest economy. However, the recurring nature of these standoffs demonstrates a persistent political dysfunction that injects unnecessary volatility into the global economic system, a poor substitute for a stable, limited government framework.

Global Markets Flash Caution

Key commodity and debt markets are signaling growing economic apprehension. Oil prices have softened amid persistent concerns of oversupply, a classic indicator of cooling global demand (WSJ). Meanwhile, investor anxiety over the colossal spending on artificial intelligence by Big Tech is now impacting the bond market, with debt issued to finance data centers coming under pressure (FT). This suggests a broader reassessment of risk, where markets are questioning the long-term returns on massive capital outlays, both in physical energy and digital infrastructure, demanding more evidence of sustainable profitability.

Stay tuned for the next Gist—your edge in a shifting world.

The UK’s fiscal problems aren’t just about growth
— Financial Times

Gold rally tempts jewellers with a literal debasement trade
— Financial Times

Medical Marijuana Grower in New Zealand Faces Criminal Charges
— New York Times Global

Investor angst over Big Tech’s AI spending spills into bond market
— Financial Times

Sony Group Raises Guidance Amid Smaller Projected Tariff Hit
— Wall Street Journal

Oil Falls Amid Lingering Oversupply Concerns
— Wall Street Journal

Ukraine’s Deep Reach

The drone war is intensifying well beyond the frontlines. Overnight, Russia’s Defence Ministry reported downing 37 Ukrainian drones across a vast swathe of territory, from occupied Crimea to the Saratov, Orel, and Rostov regions (Ansa). This is not random harassment; it is a calculated asymmetric strategy. Ukraine is forcing Moscow to divert high-value air defence assets to protect cities deep within its interior, demonstrating an evolving capacity to inflict sustained economic and psychological costs. The Kremlin’s narrative of a distant, contained “special operation” becomes harder to maintain when explosions rattle regions hundreds of kilometres from the Ukrainian border. This persistent threat directly challenges Russia’s domestic stability and war-making logistics.

Germany’s Pro-Russia Fault Line

Political fractures within the EU’s largest economy are again on display. Markus Frohnmaier, foreign policy spokesman for Germany’s AfD party, publicly defended trips to Russia as necessary to keep “channels of conversation open” (ZDF). Justifying his past visits to annexed Crimea as simple “Realpolitik,” he signals a clear break from the united European front against Russian aggression. While representing a minority view, the AfD’s stance provides a political foothold for Russian influence inside Germany, complicating consensus-building on sanctions and military support for Kyiv. It’s a stark reminder that the battle for European policy is waged not just in Brussels, but within the domestic politics of its most powerful members.

A ‘Single Market Czar’ for Europe?

The International Monetary Fund (IMF) is now advocating for a radical centralization of economic power in Brussels. IMF Director Kristalina Georgieva has proposed a “single market czar” to force through the competitiveness reforms outlined in the recent Draghi report (Euronews). The goal is to slash the red tape that stifles innovation and prevents the EU from competing with the US and China. From a free-market perspective, the diagnosis is correct—Europe’s fragmented market is a drag on growth. However, the proposed solution of an unelected plenipotentiary raises serious concerns about accountability and risks creating another layer of bureaucracy, undermining the very dynamism it seeks to foster.

Catch the next Gist for the continent’s moving pieces.

Russia, abbattuti 37 droni ucraini nella notte
— Ansa

Europe needs ‘single market czar’ to implement Draghi report faster, IMF’s Georgieva tells Euronews
— Euronews

Never forget a face? You could be a super recogniser – podcast
— The Guardian

Aktuelles zum Krieg in der Ukraine
— ZDF

Wie Studierenden günstiger Wohnraum vermittelt werden kann
— ZDF

Unicredit deposita ricorso al Consiglio di Stato
— Ansa