Daily SphereMoney · geopolitics · news analysis
Wed Nov 4Morning edition · 6:00 AM ET‹ Tue
Daily Sphere Brief · What comes nextA Democratic Congress, Iran's terms and Thursday's rate callsWashington adjusts to divided government as Brazil and Britain set rates, Canada tables a budget, US jobs data lands Friday and Ukraine talks open in Abu Dhabi next week.
7Senate seats Democrats had flipped by 1:30 AM ET, per AP calls; Republicans had flipped noneSpectrum News, Nov 4
$101.7Brent on Wednesday morning, down about 1.8% and near a three-week lowTrading Economics, Nov 4
2.00%Sweden's policy rate after Wednesday's hike, with more expected in the coming yearThe Local (Riksbank), Nov 4

This week

Storylines to watch

  • Hormuz, day 250. Iran calls the US reply to its terms unconvincing, and US media report strike plans after the vote. Whether Qatar's exchange of proposals yields an interim deal is the test this week.
  • Sudan, day 1,300. Khartoum has taken its complaint about drones it says came from Ethiopia to the UN Security Council and the African Union. Without a ceasefire, attacks on power and markets will deepen the winter crisis.
  • Ukraine's winter. The toll from Monday's strike on Komyshuvakha has risen to 37. Next week's Abu Dhabi round is the first chance to test any limit on strikes against the grid.
  • Ebola in Congo. Africa CDC counts 5,376 deaths, and vaccine trials have begun. Funding for tracing and safe burials decides the next month.
  • Washington, divided. Democrats take both chambers when the new Congress sits in January. Trump told the New York Times "We'll probably work something out." Budgets, war funding and Ukraine aid now need bargaining.

Daily Sphere's read on what comes next, drawn from linked reporting.

Top 5

1Democrats win control of both the House and the SenateAmericasSenate flips +7 DHouse flips +16 DCounts as of 1:30 AM ET
  • AP projected a Democratic Senate at 11:46 PM ET and a Democratic House at about 1:30 AM, the Boston Globe reported. As of 1:30 AM, AP calls showed Democrats had flipped 7 Senate seats and 16 House seats, with no Democratic seats lost, Spectrum News reported.
  • Democrats won Senate seats held by Republicans in Texas, Ohio, Kansas, Iowa, North Carolina, South Carolina and Maine, where Troy Jackson unseated Susan Collins, according to PBS and the Globe. Democrats also flipped the governorships of Texas and Ohio.
  • Trump told the New York Times he was "absolutely willing to accept" the results and would "look forward to working with" Democrats: "We'll probably work something out," Yahoo News reported.

Divided government returns for Trump's last two years. Congress holds the purse, so budgets, the cost of the Iran war and aid to Ukraine now need deals between the White House and the new majorities. Allies and markets will judge both sides by whether the government stays funded and debt sales stay orderly.

Boston Globe · Spectrum News · PBS NewsHour · Yahoo News

2Iran calls the US reply to its Hormuz terms unconvincing as Trump confirms strikesMiddle East · WorldBrent −1.8%Day 250Military claims
  • Mohsen Rezaei, secretary of Iran's Supreme National Security Council, said "America's response to Iran's rights and demands was not convincing." Iran's seven conditions include lifting sanctions and ending the US naval blockade; the strait would reopen over two days once they are met, Al Jazeera reported.
  • Trump called Tuesday's strike on an Iranian anti-aircraft site a "minor attack" that "wasn't war". US media report military plans for strikes that could start as early as Wednesday. Qatar says both sides "remain committed to the negotiation process".
  • UKMTO said a tanker's engine room was hit by two projectiles about 14 nautical miles northeast of Limah, Oman, with no casualties. The Revolutionary Guards claim four tankers struck mines and caught fire; Al Jazeera could not verify the claim.

Both sides are bargaining with force while the Qatari channel stays open. The gap is about sequence: Iran wants sanctions and the blockade lifted before ships move. An interim step, such as safe passage for some cargoes in exchange for a pause in strikes, would test good faith at lower risk.

Al Jazeera · Times of Israel liveblog · Trading Economics

3Nearly 300,000 flee fighting in Yemen as the Houthis encircle TaizMiddle East
  • Nearly 300,000 people have been displaced since early August, adding to 5.2 million already uprooted, OCHA says. The Houthis are encircling Taiz and every road into the city is closed, UN News reports.
  • In Taiz, nearly 250,000 people, including more than 186,000 children under five and 23,000 pregnant women, have lost access to health care, and 12 hospitals face closure. More than 1,400 cases of acute diarrhoea or suspected cholera were recorded in one week.
  • The IOM counts more than 300,000 people who fled fighting in western Yemen, almost all in the last two months, and is seeking $45 million for six months, Khaleej Times reports. Saudi Arabia and the Houthis are trading strikes.

Yemen's war has restarted with little notice abroad, and the siege of Taiz puts children and pregnant women first in line to pay. A $45 million appeal is small next to the cost of a cholera outbreak. Saudi-Iranian talks are the best lever for reopening the roads.

UN News · Khaleej Times · Times of Israel liveblog

4Toll from Russia's strike on a Ukrainian aid point rises to 37EuropeUkrainian figuresRussian claims
  • Zaporizhzhia regional head Mykhailo Semikin said 37 people were killed in Monday's strike on Komyshuvakha, where Russian bombs struck a school during an aid handout, then the shelter where people took cover, Interfax-Ukraine reported. An earlier count listed 48 missing.
  • Russia's defence ministry claims it struck Ukrainian military units near the village, killing up to 25 Ukrainian servicemen, ABC News reported. Zelensky called it "A vile terrorist strike."
  • Zelensky has said Ukraine needs an extra €70bn from Europe next year. Chancellor Merz said of Russia negotiating seriously: "I do not see that happening so far," Al Jazeera reported.

Interfax-Ukraine · ABC News · Al Jazeera

5Tokyo tech stocks slide on fears a Democratic Congress will curb AI spendingAsia · WorldNikkei −1.4%STOXX 600 +~1%
  • The Nikkei 225 closed down 1.42% at 62,188 after falling as much as 4.7% during the day, while Seoul's Kospi recovered to close up 0.62%, TradingKey reported. Taiwan's Taiex fell 0.8%, AP reported.
  • A Tokyo fund manager told ABC News the result "fuelled caution for stricter regulations on AI infrastructure investment." Reuters' Morning Bid said the dollar was broadly lower and Treasuries rallied.
  • Europe's STOXX 600 was up nearly 1% by 0927 GMT, MarketScreener showed, after futures had pointed lower.

TradingKey · AP via KSAT · ABC News live · Reuters Morning Bid (Investing.com)

The view

A divided Washington will be felt abroad through its budget

Democrats take both chambers in January. The world's biggest borrower now needs deals to fund itself, its wars and its aid.

0510157Senate, to Democrats16House, to Democrats0Either chamber, to Republicans

By early Wednesday, AP calls showed Democrats had flipped 7 Senate seats and 16 House seats without losing any of their own. From January, a Republican president will face Democratic majorities in both chambers for his last two years.

Presidents keep wide room in foreign policy, and Trump will still command the forces around Iran. Congress holds the purse. Spending bills, the cost of the Iran war and any new aid for Ukraine now pass through leaders who did not campaign on them. Oversight of tariffs and war powers will sharpen too.

Markets moved fast. The dollar fell, Treasuries rallied and Asian tech stocks slid on fears of tighter rules on AI data centres. Capital Economics argues the near-term outlook changes little. The bigger risk is the familiar one: deadlines missed and shutdowns threatened, which raise the cost of borrowing for a government that sells debt every week.

What would work is early agreement on the basics. Both sides gain from a funded government and orderly debt sales, and allies gain from a clear US position on Ukraine and the Gulf. Foreign capitals should talk to the White House and to the new committee chairs.

AP calls as of 1:30 AM ET, Nov 4, from Spectrum News. Counts will rise as races are called.

Daily Sphere's analysis, drawn from: Spectrum News · AP via KSAT · Reuters Morning Bid (Investing.com)

From X & beyond

“Democratic control of Congress would increase the potential for legislative gridlock, fiscal brinkmanship”Chris Weston, Pepperstone · Nov 4

Said as Asian stocks and the dollar fell on the US results. He added that a commanding win "could force markets to rethink Trump's remaining policy agenda."

Post: Yahoo Finance (AFP)

“The magnitude of the gains for the Democrats in the midterms does not change too much for the near-term policy outlook”Stephen Brown, Capital Economics · Nov 4

A note on what the result means for US economic policy before the new Congress sits in January. He noted Democrats lack a filibuster-proof Senate majority.

Post: AP via KSAT

“Regardless of the outcome of this election, the Japan-US alliance is the cornerstone of Japan's foreign and security policy.”Minoru Kihara, Chief Cabinet Secretary, Japan · Tokyo, Nov 4

Tokyo's first response to the results. He added that "a strong Japan-US alliance is essential" for Japan's interests and for regional peace and stability.

Post: Yahoo News (Reuters)

“America's response to Iran's rights and demands was not convincing.”Mohsen Rezaei, secretary, Iran's Supreme National Security Council · X, Nov 3

Iran's verdict on the US reply to its conditions for reopening Hormuz, which include lifting sanctions and ending the naval blockade. He said: "Only in this case will the Strait of Hormuz be reopened."

Post: Al Jazeera

“Without more funding, thousands of families could be left without the help they urgently need.”Abdusattor Esoev, Chief of Mission in Yemen, IOM · Nov 1

The IOM is seeking $45 million over six months for people fleeing fighting in western Yemen, where more than 300,000 have been displaced.

Post: Khaleej Times

Infographic

Military spending

America's military budget is bigger than the next four combined

The US spent $954bn on its military in 2025, even after a 7.5% real-terms cut. China, Russia, Germany and India together spent about $732bn.

$954bnUnited States
$336bnChina (est.)
$190bnRussia (est.)
$114bnGermany
$92bnIndia
$2,887bnWorld military spending in 2025, a record
2.5%Share of world GDP, the highest since 2009
33%US share of the world total

SIPRI figures for 2025 in current US dollars. China and Russia are SIPRI estimates. The 33% US share (954 of 2,887) and the $732bn total for the next four is our sum of SIPRI's figures (336 + 190 + 114 + 92.1). India is rounded from $92.1bn.

Sources: SIPRI fact sheet, April 2026 · SIPRI press release

Latest updates

Tusk offers Nawrocki a one-on-one meeting to ease Poland's court crisis4:45 AM ETEurope
  • Prime Minister Donald Tusk said he was "ready this week for a one-to-one meeting" with President Karol Nawrocki, Euronews reported. Presidential minister Marcin Przydacz said he hoped Tusk would not be "using the police" in the meantime.
  • Police surrounded the Constitutional Tribunal on Friday night when Nawrocki tried to enter. The European Commission says appointing eight new judges is within the Sejm's powers.

A face-to-face meeting is the first sign either side wants a way down. A deal on how the judges are named would matter more to Poland's investors and EU partners than any victory in the standoff.

Euronews

South Africans vote in local elections for more than 10,000 seats1:00 AM ETAfricaSingle source
  • More than 29 million registered voters choose councillors for 10,526 seats, with polls open from 7 AM to 9 PM, The Rio Times reports.

Councils run water, power and roads, the services South Africans complain about most. Turnout and the results in the big metros will show how voters judge the coalition era.

The Rio Times

Israel's official results are due as Herzog starts coalition talksNov 3Middle East
  • Israel's election chief said official results "must be published tomorrow", the Times of Israel reported on Tuesday.
  • Netanyahu's bloc has 53 seats and the opposition 48, with Arab-led parties holding 19; 61 is a majority. Five opposition leaders agreed to recommend Gadi Eisenkot as President Herzog holds consultations on Wednesday and Thursday, Al Jazeera reported.

Times of Israel liveblog · Al Jazeera

Brazil's central bank is expected to pause rate cuts late WednesdayNov 4Americas
  • Copom decides late Wednesday with the Selic at 13.75% after five quarter-point cuts from 15%; prediction markets put no change near 89%, The Rio Times reports. Minutes are due Nov 10.

The Rio Times

Feature · Paying for Ukraine

Europe is asked to carry more of Ukraine's bill as talks resume

Kyiv wants an extra €70bn from Europe next year, rebuilding will cost far more, and a new US Congress may change the math.

Extra ask of Europe, 2027€70bnZelensky to EU leaders, Oct 16
Recovery needs, next decade~$588bnWorld Bank-UN-EU-Ukraine estimate, Feb 2026
A new US CongressJanuaryAn EU Parliament vice-president says it "could benefit the support for Ukraine"
Abu Dhabi talksNov 10-11US mediates; Russia's team led by Vladimir Medinsky

Zelensky has asked Europe for an extra €70bn next year. In Berlin on Tuesday, Chancellor Merz said he does not yet see Russia negotiating seriously. US envoys meet Germany, France, Britain, the EU and NATO in Brussels before the Abu Dhabi round, where Witkoff lists de-escalation and post-war security on the agenda.

The longer bill is larger. The latest joint assessment puts recovery and reconstruction needs at almost $588bn over a decade, nearly three times Ukraine's 2025 GDP. Europe's taxpayers, a US Congress that now controls aid votes and Ukraine's own budget will share it, and every strike on the grid adds to it.

Al Jazeera · World Bank · Al-Monitor (Reuters) · Yahoo News (Reuters)

MoneyDebt, deficits, taxes and what governments spend

France cancels its budget revenue vote with 758 amendments still pendingEurope
  • The National Assembly vote on the revenue half of the 2027 budget, set for Tuesday, was called off with no new date; the first-reading deadline is Nov 17, Journal du Coin reports. The budget's rapporteur expects the bill to be rejected.
  • Paris expects a 2026 deficit of 5.4% of GDP and targets 5% in 2027, The Rio Times reported in October. Unions strike on Thursday.

Without a vote, the government may have to force the budget through and risk a censure motion. Each delay makes the 5% deficit target harder to reach.

Journal du Coin · The Rio Times

Sweden's central bank raises its rate to 2% and signals moreEurope
  • The Riksbank raised its policy rate to 2% from 1.75% and said "it is likely that the policy rate will be raised further in the coming year," The Local reported. The guidance holds "if the inflation outlook holds", the bank said.

The Local

Indian refiner MRPL shifts to delivered crude to shed Iran-war shipping riskAsia
  • Mangalore Refinery and Petrochemicals is buying more crude delivered at its port, so sellers carry the freight and war risk, Reuters reported via Baird Maritime. "To de-risk, we would continue to insist on DAP cargoes," said its finance chief.
  • About a third of the 300,000-barrel-a-day refiner's September-quarter crude came from Russia and about a fifth from the Middle East.

Shifting risk to sellers protects refiners but raises the price of each barrel. Poorer importers without that bargaining power pay the Hormuz premium in full.

Baird Maritime (Reuters)

IMF urges Kenya to widen its tax base before December talks, report saysAfricaSingle sourceIMF has not confirmed
  • The IMF urged Kenya to broaden its tax base, The Standard reported, as cited by The Rio Times. An IMF mission is due in Nairobi in early December.

The Rio Times

GeopoliticsWho is aligning with whom, where they clash, and what's been agreed

Allies and rivals weigh a Democratic CongressGlobal
  • Russia's deputy foreign minister Sergei Ryabkov said "Let's wait for the final results," calling the Democratic leadership's approach to Russia "sharply negative". Taiwan said its US policy is guided by "non-partisanship", Reuters reported via Yahoo News.
  • Norway's prime minister called it "a powerful political signal", and a European Parliament vice-president said it "could benefit the support for Ukraine".

Most capitals answered with caution, since foreign policy stays with the White House. The difference will show in money: aid votes, arms sales and sanctions all pass through Congress.

Yahoo News (Reuters)

Israel asks Lebanon, through US mediators, to man roadblocks in Hezbollah areasMiddle EastSingle source
  • Israel asked Lebanon to deploy troops at roadblocks in Hezbollah areas in case the Iran war resumes, Israel's Kan broadcaster reported, according to the Times of Israel. An Israeli military photo showed its 7th Armored Brigade operating in south Lebanon.

Times of Israel liveblog

Sudan takes its drone complaint against Ethiopia to the African UnionAfricaGovernment claims
  • Sudan has filed complaints with the UN Security Council and the AU Peace and Security Council. It says 70 attacks with 187 drones were launched from Ethiopian territory between mid-February and late October, killing or wounding 484 civilians, Addis Standard reports.
  • No Ethiopian response was reported. UN Secretary-General Guterres has condemned "escalating drone attacks in Sudan by the parties to the conflict", Arab News reported.

Turning Sudan's war into a dispute between states would widen it. The African Union is better placed than the Security Council to press for a border investigation both governments can accept.

Addis Standard (AllAfrica) · Arab News

Chart of the day

Rebuilding Ukraine: transport, energy and housing top the bill

Recovery and reconstruction needs over the next decade, $bn, by sector0$bn50$bn100$bn96$bnTransport91$bnEnergy90$bnHousing63$bnCommerce and industry55$bnAgriculture28$bnMines and debris

Fifth joint assessment (RDNA5) by the World Bank, UN, EU and Ukraine's government, data to Dec 31, 2025, from the World Bank. Values rounded from "over", "nearly" and "almost" figures; total almost $588bn.

Law & businessCourt rulings, regulation, rules and the big corporate moves

EU clears JD.com's takeover of MediaMarkt owner Ceconomy under its foreign-subsidy rulesEurope · Asia
  • The European Commission approved the $2.5bn deal on conditions after concerns that Chinese state financing, tax breaks and grants may have helped JD offer a higher price, Reuters reported via Euronext. JD must deal with Ceconomy on market terms and open its warehousing and logistics to other retailers on equal terms.
  • JD aims to close the deal by Nov 12.

This is one of the most prominent uses of the Foreign Subsidies Regulation against a Chinese buyer. Brussels chose conditions over a veto, a template other Chinese bids for European firms will now face.

Euronext (Reuters)

Bayer expects court approval of its $7.25bn Roundup settlement before ChristmasAmericas · Europe
  • A state judge in St. Louis, Missouri, is reviewing the settlement covering about 65,000 claims; chief executive Bill Anderson said approval "could be any week now," Reuters reported via Investing.com.

Investing.com (Reuters)

Brazil's Supreme Court hears challenges to the ban on fixed-odds bettingAmericas
  • Justice Luiz Fux held a public hearing on eight challenges to the provisional measure banning fixed-odds betting. The finance ministry defended the ban while the industry said it paid R$9.95bn in federal taxes in 2025, Next.io reports.
  • Fux will share the findings with the other justices. The measure's first 60-day term ends Nov 23 and extends automatically, pushing Congress's vote into early 2027.

A ban that cancels paid licences invites both lawsuits and a return to unregulated sites. The court's ruling will decide whether Brasília can tax and police the market or loses it offshore.

Next.io

South Korea's Supreme Court upholds a fine on Broadcom for coercing SamsungAsia
  • The court dismissed Broadcom's appeal on Oct 27, making final the Fair Trade Commission's 18.6bn won ($13.9m) fine over a deal requiring Samsung to buy at least $760m of Broadcom parts a year for three years from 2021, the Korea Herald reported.

Korea Herald

US antitrust officials lean toward clearing Fox's $22bn Roku deal with conditions, report saysAmericasSingle source
  • The Justice Department is leaning toward a consent decree but could change its position, Semafor reported, according to PYMNTS. Fox targets closing in the first half of 2027.

PYMNTS (Semafor)