Happy New Year, and welcome to the first weekly update of 2026. The year began with extraordinary news from the United States: early Saturday morning, President Trump announced that US forces had captured Venezuelan President Nicolás Maduro and his wife. To dispel any doubts, he shared a photo of Maduro captured on his Truth Social account, confirming the announcement was no joke.
Maduro was captured by US forces after being accused of overseeing a drug-trafficking network in collaboration with cartels. He also faces criminal charges of narco-terrorism and possession of machine guns and destructive devices. You might wonder whether it’s legal for the US to seize the president of another country. Washington argues that Maduro has been an illegitimate dictator since his disputed 2018 victory, which they claim was rigged and undemocratic. Beyond the legal debate, markets are focused on the bigger picture: Trump’s interest in Venezuela’s vast oil reserves. The country holds nearly one-fifth of the world’s proven reserves—larger than Saudi Arabia—yet production remains limited to about one million barrels per day. This shortfall stems from Venezuela’s ultra-heavy crude, which requires dilution and specialised processing facilities. The nation lacks the infrastructure to sustain this, compounded by US sanctions on the diluent needed for refining.
Trump has asserted that the US now has full control of Venezuela’s oil reserves and announced that American oil companies will return to rebuild the sector’s infrastructure, a project expected to take around 18 months. Despite the thrilling nature of the operation, markets largely shrugged it off, treating it as a non-event. Given Venezuela’s oil production accounts for only around 1% of daily global production, alongside an oil market that appears oversupplied in the short-term, oil markets barely moved on the news.
This year, the US Federal Reserve will see a leadership change as Chair Jerome Powell’s eight-year term ends in May. The leading contenders to succeed him are former Fed governor Kevin Warsh and National Economic Council Director Kevin Hassett—both with personal ties to President Trump, raising concerns about the Fed’s independence. Meanwhile, Fed governor Mr Miran, whose term concludes this month, has been vocal about last year’s lack of rate cuts. He continues to advocate for aggressive easing, stating that ‘well over 100 basis points of cuts is justified,’ based on his expectation that inflation will settle around 2.3% over the medium term. He is of course, another Trump appointment.
Staying with the US, Trump was again in the news as he called for US military spending to increase more than 50% to $1.5 trillion a year, citing the need for more defence spending in “these very troubled and dangerous times”. The announcement was good news for defence stocks, both in the US, but also globally, with stocks such as Babcock and BAE Systems rallying here in the UK. Defence stocks, after being unloved for many years, have rose to prominence over the last four years, delivering stellar returns.
Fresh this afternoon, US nonfarm payroll data for December showed 50,000 jobs were created, while unemployment eased to 4.4%. Both figures were broadly in line with market expectations as job growth continues to slow amid a ‘no hire, no fire’ environment driven by economic uncertainty. It’s worth noting that the Bureau of Labor Statistics, which compiles these figures, has faced staffing reductions, raising concerns about the precision of some measures.
Eurozone inflation eased back to 2% in December, aligning with the ECB’s target and market expectations. The European Central Bank, which kept rates on hold at its final meeting of last year and refrained from offering forward guidance, cited caution amid an uncertain market environment. Questions persist over the impact of US tariffs and ongoing geopolitical tensions. Meanwhile, Germany announced a significant increase in spending on defence and infrastructure last year, though implementation has been slow. The monetary spend is expected to gain momentum this year, though any boost to growth will likely appear with a lag in the data.
Here in the UK reports have surfaced that mining firms Glencore and Rio Tinto have restarted discussions around a mega-merger that would create the world’s largest mining company. This comes almost a year after failed merger attempts between the two companies. Commodity pricing remains firm, with strong performance to start the year, particularly from metals such as copper. Our portfolios have been skewed towards a range of different commodities and that helped drive performance in 2025.
2026 has continued where 2025 left off, with alarming geo-political news flow largely being discounted by markets. Leadership, and laggards remain the same, with strong early performance coming from emerging markets and commodities, while the typical quality, defensive companies continue to lag.
Nathan Amaning, Investment Analyst
Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.
Maduro was captured by U.S. forces after being accused of overseeing a drug-trafficking network in collaboration with cartels. He also faces criminal charges of narco-terrorism and possession of machine guns and destructive devices. You might wonder whether it’s legal for the U.S. to seize the president of another country. Washington argues that Maduro has been an illegitimate dictator since his disputed 2018 victory, which they claim was rigged and undemocratic. Beyond the legal debate, markets are focused on the bigger picture: Trump’s interest in Venezuela’s vast oil reserves. The country holds nearly one-fifth of the world’s proven reserves—larger than Saudi Arabia—yet production remains limited to about one million barrels per day. This shortfall stems from Venezuela’s ultra-heavy crude, which requires dilution and specialised processing facilities. The nation lacks the infrastructure to sustain this, compounded by U.S. sanctions on the diluent needed for refining.
Trump has asserted that the U.S. now has full control of Venezuela’s oil reserves and announced that American oil companies will return to rebuild the sector’s infrastructure, a project expected to take around 18 months. Despite the thrilling nature of the operation, markets largely shrugged it off, treating it as a non-event. Given Venezuela’s oil production accounts for only around 1% of daily global production, alongside an oil market that appears oversupplied in the short-term, oil markets barely moved on the news.
This year, the U.S. Federal Reserve will see a leadership change as Chair Jerome Powell’s eight-year term ends in May. The leading contenders to succeed him are former Fed governor Kevin Warsh and National Economic Council Director Kevin Hassett—both with personal ties to President Trump, raising concerns about the Fed’s independence. Meanwhile, Fed governor Mr Miran, whose term concludes this month, has been vocal about last year’s lack of rate cuts. He continues to advocate for aggressive easing, stating that ‘well over 100 basis points of cuts is justified,’ based on his expectation that inflation will settle around 2.3% over the medium term. He is of course, another Trump appointment.
Staying with the US, Trump was again in the news as he called for US military spending to increase more than 50% to $1.5 trillion a year, citing the need for more defence spending in “these very troubled and dangerous times”. The announcement was good news for defence stocks, both in the US, but also globally, with stocks such as Babcock and BAE Systems rallying here in the UK. Defence stocks, after being unloved for many years, have rose to prominence over the last four years, delivering stellar returns.
Fresh this afternoon, U.S. nonfarm payroll data for December showed 50,000 jobs were created, while unemployment eased to 4.4%. Both figures were broadly in line with market expectations as job growth continues to slow amid a ‘no hire, no fire’ environment driven by economic uncertainty. It’s worth noting that the Bureau of Labor Statistics, which compiles these figures, has faced staffing reductions, raising concerns about the precision of some measures.
Eurozone inflation eased back to 2% in December, aligning with the ECB’s target and market expectations. The European Central Bank, which kept rates on hold at its final meeting of last year and refrained from offering forward guidance, cited caution amid an uncertain market environment. Questions persist over the impact of U.S. tariffs and ongoing geopolitical tensions. Meanwhile, Germany announced a significant increase in spending on defence and infrastructure last year, though implementation has been slow. The monetary spend is expected to gain momentum this year, though any boost to growth will likely appear with a lag in the data.
Here in the UK reports have surfaced that mining firms Glencore and Rio Tinto have restarted discussions around a mega-merger that would create the world’s largest mining company. This comes almost a year after failed merger attempts between the two companies. Commodity pricing remains firm, with strong performance to start the year, particularly from metals such as copper. Our portfolios have been skewed towards a range of different commodities and that helped drive performance in 2025.
2026 has continued where 2025 left off, with alarming geo-political news flow largely being discounted by markets. Leadership, and laggards remain the same, with strong early performance coming from emerging markets and commodities, while the typical quality, defensive companies continue to lag.
Nathan Amaning, Investment Analyst
Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.