Weekly market commentary

Market review

Global Markets have started the year on solid ground following a strong 2025, driven by gains in equities and precious metals and a shift by central banks towards a more supportive policy stance. Confidence is supported by easing inflation and continued support from central banks, though concerns around high valuations, tech-sector volatility, and ongoing geopolitical risks highlight the importance of selectivity and diversification.

Geopolitical uncertainty remains a key theme. Events such as the US-led capture of Venezuela’s President Maduro, rising China–Japan trade tensions, and renewed strains in transatlantic relations have dominated headlines. Despite this, markets have shown resilience, with investors largely focused on economic fundamentals unless shocks threaten growth or inflation.

In the US, the picture is mixed. Unemployment edged up to 4.6% in November and job openings fell, yet signs of strength persist: services activity hit a 14-month high, payrolls grew modestly, and the trade deficit narrowed to its lowest level since 2009. Productivity and labour costs also surprised positively.

Across Europe, inflation continues to cool. Underlying inflation eased to 2.3% in December, while overall inflation fell below 2%. German factory orders surged, though gains were concentrated in transport and metals.

In Asia, China saw a mild inflation uptick, driven by food prices, while Japan’s wage growth slowed sharply, even as its economy was described as “recovering moderately."

Outlook

Markets remain sensitive to changing economic data and global events, with volatility often spiking around major announcements. Differences in inflation trends and uneven growth are leading central banks to take varied approaches, while government spending and liquidity conditions add further complexity. Against this backdrop, we expect performance to vary more widely across different asset classes and regions in the months ahead.

Movers table