EUROPE - Michel Barnier’s "political Waterloo" may trigger a "chain reaction" across the financial markets which could send the euro into a downward spiral and pose a threat to the monetary union itself, financial experts have warned.

UK - Strong winds of 80mph and heavy rain will hit the UK this weekend as the fourth named storm of the season arrives. Storm Darragh is expected to last from Friday evening into Sunday, with up to 60mm of rain forecast in some places. It comes as communities are still recovering from the impact of Storm Bert.

EUROPE - Officials in Brussels fear that the curse of the eurozone is about to strike again — and this time it is France on the receiving end. The European Union’s spending limits, “austerity” to many voters, are hardwired into Europe’s single currency and have played a big part in France’s current political crisis as well as the growth of anti-establishment populist movements across the continent. Brussels is closely monitoring the situation in France and, above all, the reactions of the financial markets, which in the past have triggered a sovereign debt crisis by reducing the value of bonds and increasing the cost of borrowing for all eurozone governments. Both France’s situation and political instability in Germany, which also has looming fiscal deficits and insurgent populists, come at a dangerous time for the EU with an incoming Donald Trump presidency, a stalling economy and threats from Russia.

GERMANY - Olaf Scholz is set to appear before a parliamentary committee regarding Germany's biggest tax fraud scandal, which saw the state defrauded by around €36 billion (£30 billion). Scholz, who at the time was the Mayor of Hamburg, faces a grilling over how much he knew of the transactions and whether or not he did enough to address the allegations. The scandal could be a key talking point throughout the election, with Scholz’s political rivals unlikely to pass up the opportunity to bring the leader’s character into question.

UK - Children as young as 12 are being arrested on suspicion of extremism offences, Britain’s most senior counterterrorism police officer has said. Matt Jukes, assistant commissioner at the Metropolitan Police, said there was a “conveyor belt leading children towards extremism” being driven by tech companies “making vast amounts of money” from them. “For all the benefits it brings, the internet has also globalised extremism, accelerated the spread of hateful ideologies internationally and made it possible for anyone with an internet connection to reach into the lives of children halfway round the world.” “Around 20 per cent of ASIO’s priority counterterrorism cases involve young people. In every one of the terrorist attacks, disruptions and suspected terrorist incidents in Australia this year, the alleged perpetrator was a young person."

FRANCE - The French government has collapsed after Prime Minister Michel Barnier was ousted in a no-confidence vote. MPs voted overwhelmingly in support of the motion against him - just three months after he was appointed by President Emmanuel Macron. Opposition parties had tabled the motion after the former Brexit negotiator controversially used special powers to force through his budget without a vote. It marks the first time the country's government has collapsed in a no-confidence vote since 1962. The development will further France's political instability, after snap elections in summer led to no single group having a majority in parliament. Barnier is now obliged to present the resignation of his government, and the budget which triggered his downfall is defunct. No new parliamentary elections can be held until July, so the current deadlock in the Assembly - where no group can hope to have a working majority - is set to continue.

FRANCE - France’s political crisis is worse than normal political crises. Normally when a democratic country passes through turbulence, there is some prospect of the turbulence coming to an end. Not today in Paris. If anything, the downfall of Michel Barnier – toppled in parliament by a no-confidence motion – threatens to set a pattern for what lies ahead. For if Barnier – a moderate of the centre-right with a reputation for courtesy and compromise – was unable to pass a budget, then who else can? The original cause of the crisis has not gone away. It is the division since July of the National Assembly into three roughly equal blocs, none of which is prepared to deal with another. As a result the two blocs that make up the opposition will always be able to unseat the one bloc that forms a government.

FRANCE - That the country is in turmoil - political and economic - is not only of grave concern to French citizens. These are times of deep global instability. And France, together with Germany, is traditionally seen as the EU's "motor" in terms of ideological and political horsepower. But that motor is spluttering, to put it mildly. France is not alone in being riven and distracted by domestic political disputes. Germany will hold a snap general election in February after its bickering coalition government recently collapsed. The EU as a whole is affected.

USA - Donald Trump is not messing around. After trying to play nice during his first administration, Trump is making it very clear that he fully intends to use the full power of the presidency to shape economic policy during his second administration. In particular, Trump is planning to impose massive tariffs on other nations that attempt to stand in the way of the MAGA agenda. Last week, Trump threatened to impose 25 percent tariffs on all products coming into the United States from Mexico and Canada if those two countries do not work with him to secure our borders… Most people do not realize this, but Canada is actually our number one trade partner. If the Canadians get hit with 25 percent tariffs, it will crash the Canadian economy.

RUSSIA - A Russian warship has fired at a German army helicopter over the Baltic Sea. The crew of the Russian ship fired signal ammunition at the military aircraft, the German Press Agency in Brussels reported. The Bundeswehr helicopter had been on a reconnaissance flight. It comes amid rising tensions in recent weeks between the Kremlin and NATO countries after UK and US missiles were used by Ukraine to attack Russia. Vladimir Putin has since warned that both nations are now "directly involved" in the conflict. Germany has spent the past year reorganising its military to get it "ready for war", in the words of Defence Minister Boris Pistorius, who has set up a new cyber and information branch in addition to the traditional navy, army and air force. Signal ammunition is typically only used by vessels in emergency situations.

USA - President-elect Trump just threw down the gauntlet on the hostages still being held in Gaza well over a year after they were taken hostage in October of 2023. Trump said “there will be ALL HELL TO PAY” for Hamas, saying they will be hit harder than anyone has ever been hit in the history of America.

USA - You’re left with little after taxes, while costs and foreign aid keep rising. Let this sink in:

You pay 30% of your check as Federal Income Tax.

You pay 10% in most States Income Tax.

You pay another 7% in Sales Tax.

You pay another 8% in Property Tax.

55% of your check is taken from you before you even get home from work.

Then they doubled gas prices.

Then they doubled food prices.

Then they doubled mortgage rates.

Then they give all your money away to other countries.

LEBANON - The ceasefire in Lebanon appeared to lie in tatters today after Israel launched a number of deadly salvos on Hezbollah positions in the wake of what its army claimed was an attack on a military post. The raids came as Israeli forces also bombarded civilian homes during repeated attacks in the northern Gaza Strip, killing at least 15 people. But the supposed deal to halt fighting in Lebanon now looked to have been all but torn up. The Israel Defence Forces (IDF) said it struck Hezbollah targets and infrastructure "throughout Lebanon", while reiterating its commitment to the ceasefire agreement. Hezbollah said it was responding to Israeli "violations" and said it carried out a "defensive warning" strike, firing mortars at an Israeli army position in an area occupied by Israel. When the ceasefire deal was first announced, Mr Netanyahu said his country would not hesitate to strike if Hezbollah broke the terms.

ISRAEL - Israeli prime minister Benyamin Netanyahu said on Tuesday that Israel was enforcing its ceasefire with Hezbollah with “an iron fist” amidst warnings from his administration that a return to hostilities would trigger more far-reaching Israeli strikes within Lebanon. Netanyahu warned that the 60-day truce between Israel and Hezbollah, which came into effect last Wednesday morning, did not equal “the end of the war”. “If we return to war we will act strongly, we will go deeper, and the most important thing they need to know: there will no longer be an exemption for the state of Lebanon,” defence minister Israel Katz said on Tuesday. He called on the Lebanese state to keep Hezbollah out of southern Lebanon and to “dismantle their infrastructure”. Failure to do so, he warned, could lead Israeli forces to hit the Lebanese state directly.

CHINA - The Chinese government has said it will ban exports to the US of some key components in making semiconductors, escalating trade tensions a day after Washington announced curbs targeting China’s ability to make advanced chips. Among the materials banned from export were the metals gallium, antimony and germanium, China’s commerce ministry said in a statement that cited “national security” concerns.