Market drivers and catalysts
Equities: Fresh surge in Japan’s equity market in first session of 2026. US equity futures firm after US strikes in Venezuela.
Volatility: VIX calm, Venezuela headline risk, VIX futures steady, US data ahead, downside skew intact
Digital Assets: Bitcoin and Ethereum firmer, ETF inflows supportive, IBIT outperforming ETHA, altcoins bid, macro still key
Fixed Income: Japan’s yields jump to fresh highs all along the curve on BoJ hawkish talk.
Currencies: US dollar firms broadly, with JPY a bit resilient on fresh hawkish talk from BoJ’s Ueda
Commodities: Gold and silver jumps on Venezuela news; crude drifts lower towards key support area
Macro events: US Dec. ISM Manufacturing
Macro headlines
US President Trump announced on Saturday that the US successfully carried out a large-scale strike against Venezuela in which President Maduro and his wife were captured and flown out of Venezuela. Trump also commented that Venezuela must give the Trump administration “total access” and meet US demands on how Venezuela is to be administered or there will be a second strike.
Bank of Japan Governor Ueda was out on Monday underlining the BoJ’s intent to continue raising the policy rate, saying that the BoJ will continue to raise the rate in line with improvement in the economy and inflation.
The S&P Global US Manufacturing PMI dropped to 51.8 in December 2025 from 52.2 in November, marking the weakest growth in five months. Orders and exports fell, output growth slowed, and business confidence waned amid tariff uncertainties. Employment rose, and inflation eased slightly but stayed high.
The US Fed's Paulson anticipates 2% growth, moderating inflation, and stable labor markets in 2026, suggesting possible rate adjustments if conditions meet expectations. She sees rates as restrictive and forecasts near 2% inflation as tariff effects ease. She describes the labor market as resilient and the economic outlook as benign.
The S&P Global Japan Manufacturing PMI rose to 50.0 in December 2025 from 49.7 initially and 48.7 in November, signaling stable conditions. This ended a five-month decline and was the highest reading since June, with stable output and slower declines in new orders.
Macro calendar highlights (times in GMT)
0930 – UK Nov. Consumer Credit and Mortgage Approvals
1500 – US Dec. ISM Manufacturing
2030 – CFTC publish its first up to date COT report since October
Earnings this week
Wednesday: Constellation Brands
Thursday: Fast Retailing, Aeon, Seven and I Holdings
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 added 0.2% while the Nasdaq Composite finished flat (0.0%) and the Dow rose 0.7%, as investors rotated toward cyclicals and defensives at the start of the year. Industrials helped set the tone, with Boeing up 4.9% and Caterpillar up 4.5% as the sector outperformed. Semiconductor leadership returned with Nvidia up 1.3% after a strong chip tape. Tesla slid 2.6% after reporting its first annual deliveries decline, keeping pressure on high-beta growth. Attention now shifts to early-week macro prints and whether the value tilt persists.
Europe: The STOXX 600 rose 0.6% to close at 596.14, with the DAX up 0.2%, the CAC 40 up 0.6%, and the FTSE 100 up 0.2% after briefly clearing the 10,000 mark. Cyclical leadership broadened, with defence and banks in demand as investors extended the late-2025 risk bid despite still-thin holiday volumes. ASML jumped 7.0% as semiconductor equipment outpaced the broader market.
Denmark’s Orsted gained 4.6% after it challenged a U.S. suspension tied to its offshore wind project, lifting clean-energy sentiment locally. Next up: how early January data and policy headlines reshape the pace of the rally.
Asia: Japan’s Nikkei 225 surged 3.0% to 51,865 in its first official close since the New Year break, with risk appetite tracking the global equity bid. For markets still trading after this publication time, the most recent official closes show South Korea’s Kospi up 2.3% and Hong Kong’s Hang Seng up 2.8% on Friday. In Seoul, Samsung Electronics climbed 7.2% and SK Hynix rose 4.0% as chip leaders extended a strong start to 2026, while Celltrion jumped 11.9% after a U.S. FDA advisory panel backed a key drug. The next test is whether today’s reopened liquidity sustains the tech-led momentum.
Volatility
Volatility is starting the week in a calm posture. The VIX last closed at 14.51 on Friday, and with US equity markets closed over the weekend, the index has not yet reflected fresh geopolitical headlines around Venezuela. A useful early signal comes from VIX futures, which continued to trade: the front contract is slightly lower, suggesting futures markets are not, at this stage, pricing a material spillover into US equities. That does not mean the risk can be ignored. Developments in Venezuela could still feed through via energy markets, broader geopolitics, or shifts in risk appetite once liquidity fully returns.
For now, investors’ focus turns to US macro data, with today’s ISM manufacturing report and Friday’s US jobs data the key potential catalysts.
Options are pricing an S&P 500 expected move of about ±77 points (±1.12%) for this week into Friday’s 9 January expiry. A daily skew check shows downside protection remains in demand, with put options still priced noticeably richer than comparable calls for this week’s expiration.
Digital Assets
Digital assets are starting the week on a firmer footing, with crypto markets trading more “risk-on” despite the geopolitical noise. Bitcoin is holding around $92,000, while Ethereum trades near $3,150, and most major altcoins are modestly higher. The more important signal for investors remains ETF flows. The year began with renewed inflows into spot crypto ETFs, led by Bitcoin products, while Ethereum ETFs also attracted fresh capital. That flow support has helped stabilise sentiment after last year’s volatility.
In listed crypto proxies, IBIT is outperforming ETHA in early January trading, but both ETFs are moving in line with the broader crypto complex. Among altcoins, Solana, XRP, and Chainlink are all firmer versus year-end levels, keeping the higher-beta segment of the market supported. Looking ahead, macro data, US dollar moves, and the persistence of ETF inflows will be key in determining whether this early-year rebound can extend.
Fixed Income
Japan’s government bond yields jumped to new highs for the cycle on fresh rate hike talk from Bank of Japan governor Ueda, with the benchmark 2-year JGB yield up two basis points after Friday’s surge, taking it to a new 28-year high at 1.20%. The 10-year benchmark JGB yield likewise surged to a new cycle high of 2.12%.
US treasuries ended 2025 on a weak note, with the 10-year US Treasury yield pulling higher above 4.15%. The yield rose as high as 4.19% Friday before easing back on Monday. The key range high since last August has been near 4.20%. The benchmark 2-year US Treasury yield remains near the range lows of the last several weeks, trading Monday at 3.465%, two basis points above the lowest close since a brief spike last October.
Commodities
Oil prices fell, with Brent sliding toward $60 and WTI below $57, both near five-year lows. Markets weighed the US capture of Venezuela’s President Nicolás Maduro, with President Trump saying sanctions will remain in place while US firms assist with rebuilding efforts. OPEC+ meanwhile maintained its Q1 production pause, reinforcing concerns about a persistent supply glut and uncertainty over Venezuelan output. Ongoing unrest in Iran and the associated risk of supply disruptions is providing some offset to these downside pressures.
Gold and silver rallied as investors sought safety following the US action in Venezuela. Spot gold rose 2% to above $4,420, while silver jumped 3.7% to above $75. Trump said the US plans to “run” Venezuela, adding to governance uncertainty, while Secretary of State Marco Rubio noted Washington would use oil leverage to force further political change. Beyond Latin America, markets are also questioning what signal this action may send regarding territorial ambitions in China and Russia.
At 3:30 pm ET today (20:30 GMT), the CFTC will publish its first up-to-date Commitment of Traders report (COT) since the US government shutdown in October caused a prolonged reporting delay. Traders will be watching closely for insight into how leveraged funds are positioned across key commodity and FX markets.
Currencies
The US dollar rose in Monday’s session in the wake of the geopolitical waves generated by the Trump administration’s surgical strike on Venezuela’s Maduro government. EURUSD dipped back below 1.1700 in Asia’s Monday session for the first time since early December, while USDJPY pulled slightly higher and above 157.00, with the upside perhaps slightly curbed by BoJ governor Ueda’s hawkish talk. The cycle high in USDJPY since early 2025 is the 157.89 high from November.
The US dollar firms broadly, with JPY a bit resilient on fresh hawkish talk from BoJ’s Ueda
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