It wasn’t just economic activity that stopped in 2020, so did geopolitics. Trade wars, tensions in the Middle East and Russian cyberattacks all dropped from headlines as the COVID pandemic dominated politics. But with some normalisation of the pandemic and, crucially, a new US administration, geopolitics is returning as a risk investors cannot ignore.

Over the past week, we have seen Saudi Arabia normalise relations with Qatar – perhaps in anticipation of the incoming Biden administration. Saudi also cut oil production, which, intentionally or not, benefits Russia. Then China and the EU signed a Comprehensive Agreement on Investment (CAI), which could allow greater access to EU infrastructure (something to which the US has long objected). And the UK has finally broken away from the EU, opening up new possible geopolitical relationships for the UK.

On the financial system side, there is a geopolitical battle brewing between the US and China. This is over the US dollar’s centrality in global payments, since the US often weaponizes the currency as a foreign policy tool. China has made significant advances in its central bank digital currency, which could start to displace the dollar in the global payments system. The US meanwhile has taken steps to accept blockchain as a valid settlement system to offset the Chinese approach.