United States
Wall Street kicked off 2026 on cautious footing, with the S&P 500 edging up just 0.2 per cent on Friday’s first trading session of the year. The Dow Jones Industrial Average fared better, climbing 0.7 per cent to close at 48,382.39, while the Nasdaq was essentially flat with a slight 0.2 per cent decline.
Treasury yields moved higher on Friday, with the 10-year yield rising two basis points to 4.19 per cent. The 30-year yield advanced to 4.87 per cent after touching its highest level since September. Investors will be watching whether events in Venezuela add to the appeal of US debt by stoking risk aversion, or diminish demand by lifting inflation concerns.
A heavy economic calendar awaits this week. The all-important December non-farm payrolls report headlines proceedings, while Wednesday brings November figures for job openings, quits and layoffs from the Bureau of Labor Statistics. The Institute for Supply Management’s December surveys of manufacturers and service providers will offer additional clues about employment conditions.
Federal Reserve Bank of Philadelphia President Anna Paulson indicated that modest additional interest rate cuts could be appropriate later in 2026, though conditioned that outcome on a benign economic outlook.
In corporate news, Tesla ceded the title of world’s top electric vehicle seller to China’s BYD, surrendering a lead the Elon Musk-led company built as it popularised plug-in vehicles over the past decade. Airbus delivered 793 aircraft in 2025, exceeding its revised annual target.
Europe
European equities closed out Friday’s session in positive territory, with the pan-European Stoxx 600 advancing 0.67 per cent as most sectors and major bourses finished in the green.
Britain’s FTSE 100 briefly touched the symbolic 10,000-point threshold for the first time, surpassing the milestone around 8:30am London time before paring gains to close 0.2 per cent higher at 9,951.14. The index extended its momentum following a strong 2025 performance.
The Stoxx 600 rose 16.7 per cent during 2025, notching its third consecutive year of gains, led higher by banking stocks and a surge in regional defence spending.
Technology stocks stole the show on Friday after the US government granted an annual licence to Taiwan Semiconductor Manufacturing Company to import US chip manufacturing equipment to its facilities in Nanjing, China. Dutch semiconductor equipment makers Be Semiconductor and ASMI topped the index, surging 11.5 per cent and approximately 7 per cent respectively. ASML, Europe’s most valuable company, also climbed roughly 7 per cent.
Mining and defence stocks were among the other top performers, with Leonardo, Thyssenkrupp, Kongsberg Group, Saab and Rolls-Royce all closing more than 4 per cent higher.
Danish energy group Ørsted ended the session 4.6 per cent higher after the world’s largest developer of offshore wind farms said it had challenged the US government’s suspension of the lease for its Revolution Wind joint venture and would seek a court injunction.
Germany’s DAX rose 0.2 per cent, France’s CAC 40 gained 0.56 per cent, and Italy’s FTSE MIB added nearly 1 per cent.
Australia
Local investors face a cautious start to the week, with ASX 200 futures pointing to a modest 0.1 per cent gain at the open, with fair value calculations suggesting a similar advance.
The geopolitical situation in Venezuela will be front of mind, though given crude prices have slumped to around US$60 per barrel and indications of global oversupply in the first quarter, the oil market is expected to absorb any potential disruption from the South American nation, which accounts for less than 1 per cent of global supplies.
Investors will also be watching for Australia’s monthly consumer price index reading this week, which could influence expectations around Reserve Bank of Australia policy.
Coronado Global Resources faces a difficult session after a collapse at its Curragh mine in Queensland killed one worker. The mining suspension adds to the company’s existing financial challenges.
Bond markets saw selling pressure, with Australian 3-year yields rising 9 basis points to 4.23 per cent and 10-year yields climbing 9.7 basis points to 4.84 per cent.
ADR movements suggest resources heavyweights could see support, with BHP’s American depositary receipts up 2.3 per cent to an Australian dollar equivalent of $46.14, representing a 0.8 per cent premium to Friday’s Sydney close. Rio Tinto ADRs advanced 1.7 per cent.
The Australian dollar traded up 0.3 per cent at US66.87 cents, while the New Zealand dollar edged 0.1 per cent higher to US57.67 cents.
Commodities and currencies
Oil markets are in focus following the weekend’s Venezuelan developments. President Donald Trump announced that an “oil embargo” on Venezuela was in full force following the capture of Maduro. Venezuela’s state-run oil company PDVSA has begun cutting crude production as it runs out of storage capacity, with exports now at a standstill.
The company has requested output cuts to joint ventures, including those with China National Petroleum Corporation and Chevron. Key facilities including Jose port, the Amuay refinery and oil areas in the Orinoco Belt remain operational.
OPEC+ stuck with plans to pause supply increases in the first quarter, keeping production levels steady through the end of March. Brent crude traded down 0.2 per cent at US$60.75 per barrel in early Monday trading.
Precious metals held steady following their best annual performances since 1979. Gold rose 0.2 per cent to US$4,328.35 per ounce, while silver gained 1.3 per cent to US$72.61 per ounce. Palladium and platinum also advanced. However, a benchmark commodity index rebalancing starting next Thursday could pressure prices in the near term, with more than US$5 billion of silver futures and roughly US$6 billion of gold futures set to be sold over the five-day roll period.
Base metals continued their strong run. Aluminium climbed above US$3,000 per tonne for the first time in more than three years on a tightening supply outlook, rallying 0.7 per cent to US$3,015.50 on the London Metal Exchange. A cap on Chinese smelting capacity and constraints to European production due to higher electricity prices have chipped away at global inventories.
Copper closed at US$12,469.50 per tonne on the LME, up 0.4 per cent, after capping the biggest annual gain since 2009. The main union at a Capstone Copper-operated mine in northern Chile began a strike on Friday. Nickel climbed 1 per cent after Vale Indonesia halted mining following a delayed approval to a work plan from authorities.
The US dollar edged lower versus major currencies in early trading, with the euro slipping 0.2 per cent to US$1.1723 and the greenback weakening against the Japanese yen.
Economic Calendar
No major releases
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
