Geopolitical risk remains elevated this week even after a recent de-escalation over Greenland, Raymond James said in its latest RJ Macro Monday note. The firm listed five principal themes it believes will be important for market participants in the near term.
First, Raymond James described the Greenland episode as “stabiliz[ing] for now.” The firm cited analyst Ellen Ehrnrooth, who noted that President Trump stepped back from the prospect of seizing the island by force and abandoned a threatened 10% tariff on several European countries. Ehrnrooth said that the retreat "eased some market concerns," while cautioning that this is likely not the last bout of volatility related to the issue.
The second theme centers on Iran. Raymond James pointed to a continued U.S. military buildup in the region and observed that risks tied to Iran remain active. The note states that the U.S. President has publicly signaled an openness to negotiations, but reporting continues to indicate consideration of "potential military action," a dynamic the firm flagged as an ongoing source of risk.
A surprise snap election in Japan represents the third theme. Raymond James reported that Prime Minister Takaichi dissolved the lower house on Jan. 23 after only three months in office, a move that triggered a selloff in government debt. The firm said the election appears aimed at securing a stronger mandate for what it described as "an ambitious fiscal agenda."
The fourth theme involves recent U.S. policy measures affecting the mining sector. Raymond James highlighted a new White House seabed-mining permitting rule and a reported $1.6 billion federal stake in USA Rare Earth. The firm said these developments reinforce expectations of "ongoing federal support for the sector."
Finally, the firm noted cautious optimism around Russia-Ukraine diplomacy. Raymond James described trilateral talks in Abu Dhabi as "constructive," while warning that unresolved core issues "will make the final 10%" of any agreement especially difficult to achieve.
Taken together, these five themes form the firm’s near-term map of geopolitical and macro risks that could influence market sentiment and asset-class performance as events evolve.