Closing Recap 

Global markets are grappling with a major geopolitical shock to start the new year after U.S. military forces launched an attack on Venezuela and captured President Nicolás Maduro. The surprise escalation sent a wave of uncertainty through financial markets, boosting safe-haven assets like the U.S. dollar and gold, while causing volatile swings in crude oil. U.S. stock futures are little changed, but the mood is tense as investors assess the fallout from the U.S. asserting control over the oil-rich nation. Asian currencies weakened against the dollar, with the Japanese yen notably underperforming despite hawkish comments from the Bank of Japan Governor. Gold surged over 2% on the flight to safety, while oil prices whipsawed as traders weighed the immediate geopolitical risk against the potential for increased Venezuelan supply under U.S. control. 

Key Takeaways 

• Tech Leads Asian Stocks Higher: Despite the geopolitical tensions, Asian stock markets have started the year on a strong note, led by a powerful rally in technology and semiconductor shares.
• U.S. Captures Venezuelan President: A U.S. military operation in Venezuela resulting in the capture of President Maduro has sent a major geopolitical shockwave through global markets to start the new year. 
• Bullish S&P 500 Targets for 2026 Emerge: Despite recent volatility, major Wall Street banks like JPMorgan and Morgan Stanley are rolling out very bullish 2026 targets for the S&P 500, with some calling for a move to 8,000, citing strong AI-driven earnings growth.
• Safe Havens Rally: The U.S. dollar and precious metals surged on a flight to safety. The DXY rose 0.3%, and spot gold jumped 2.2% to over $4,420 an ounce. 
• Oil Prices Whipsaw on Venezuela News: Crude oil saw a volatile session, initially rising on the attack before paring gains as the market weighed the geopolitical risk premium against the potential for higher Venezuelan output under U.S. administration. 
• Futures Steady, but Caution Prevails: U.S. stock futures are muted as investors remain on edge, assessing the broader implications of the U.S. intervention in Venezuela. 
• Yen Weakens Despite Hawkish BoJ: The Japanese yen surprisingly weakened, with USD/JPY rising, as the dollar’s safe-haven appeal overshadowed hawkish comments from BoJ Governor Ueda, who vowed to keep raising rates. 
• Bitcoin Bounces, Starting the Year on a Positive Note: After a dismal 2025 where it lost 6.4%, Bitcoin is showing signs of life, rallying over 1% and starting the new year with five consecutive days of gains, rising to $92,000 as it tracks a modest uptick in tech-heavy Nasdaq futures.
• Key Data Week Ahead: The market is now looking ahead to a busy week of U.S. economic data, including ISM Manufacturing PMI and the December Jobs Report, for the next major catalyst. 

Market Overview 

The new trading year has kicked off with a geopolitical earthquake. The stunning news of a U.S. military operation in Venezuela and the capture of President Maduro has immediately reset the market narrative, shifting the focus from central bank policy to geopolitical risk. The immediate reaction was a classic flight to safety, with the U.S. dollar and gold both surging as investors sought refuge from the uncertainty. President Trump’s subsequent confirmation that the U.S. would oversee a “safe and orderly transition” in the oil-rich nation has only added to the market’s unease. The most complex price action has been in the oil market. Prices whipsawed as traders struggled to balance the immediate supply risk from a conflict in a major oil producer against the longer-term possibility that U.S. control could lead to a significant increase in Venezuelan production, which has been crippled by years of sanctions. 

Index	Up/Down	%	Last
DJ Industrials	(Flat)	-0.001	48,581 (Futures)
S&P 500	(Flat)	0.001	6,908 (Futures)
Nasdaq	(Flat)	0.003	25,461 (Futures)
Russell 2000	(N/A)	–	2559

The U.S. Dollar has rallied on its safe-haven status, and Gold has surged over 2%. However, the reaction in other asset classes has been more nuanced. Oil prices, after an initial spike, have fallen as the market prices in a still-ample global supply and a potentially quick and orderly transition of power in the oil-rich nation. The escalation has, for now, overshadowed other key market drivers, including an OPEC+ decision to leave output unchanged and hawkish rhetoric from the Bank of Japan. While U.S. stock futures are holding steady, the tense geopolitical backdrop and the dollar’s strength are likely to keep a lid on any significant risk-on rally as the market cautiously navigates this new and unpredictable landscape.

Economic Calendar 

The first full trading week of the new year is packed with key economic data, though today’s session will be dominated by the geopolitical headlines.

 Data Released Earlier / Overnight: 

• OPEC+ Meeting: The producer group agreed to leave production quotas unchanged. 
• Japan Final Manufacturing PMI (Dec): Revised up to 50.0, indicating the factory sector stabilized at the end of 2025. 
• China Caixin Services PMI (Dec): Slowed to a six-month low of 52.0, reinforcing signs of an uneven recovery. 

Today’s Economic Calendar: 

• European Session: An extremely light calendar with only low-tier data releases. 
• U.S. Session: The main highlight is the U.S. ISM Manufacturing PMI (Dec). 

Key Events This Week: 

• U.S. December Jobs Report (Friday) 
• U.S. November JOLTS Job Openings (Wednesday) 
• U.S. December ADP Nonfarm Employment (Wednesday) 

Asset Class Spotlight: FX, Commodities, Bonds & Crypto

Gold was the standout performer, with spot prices surging over 2.2% to $4,422 an ounce as investors rushed into the traditional safe haven amidst the Venezuela crisis. Other precious metals like silver and platinum also jumped sharply. Oil prices were volatile, with WTI crude initially rising before turning negative to trade below $57 a barrel. The market is struggling to price the net effect of the geopolitical risk versus the potential for increased future supply from Venezuela.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.29	-0.005	56.84
Gold	94.7	0.022	4422.92
EUR/USD	-0.005	-0.004	1.168
USD/JPY	0.31	0.002	157
Bitcoin	1,000+	0.011	92264
10-Year Note Yield	(N/A)	–	0.04148

The U.S. dollar surged on safe-haven demand, weighing on most major currencies. The Japanese yen was a notable underperformer. 

• USD/JPY: The yen weakened despite hawkish comments from BoJ Governor Ueda, as the dollar’s safe-haven appeal proved to be the dominant force. The pair rose back above the 157.00 level. The Yen is underperforming despite the risk-off mood, weighed down by BoJ Governor Ueda’s hawkish comments, which are seen as a long-term positive but are currently being overshadowed by the dollar’s strength.
• EUR/USD: The pair has dipped below 1.1700, hitting a four-week low as the stronger dollar and geopolitical jitters weigh on the single currency. The pair is being crushed by the powerful safe-haven bid for the U.S. dollar, with J.P. Morgan forecasting a move to 1.20 by year-end but acknowledging the near-term dollar strength.
• GBP/USD: The pound also came under pressure from the flight to safety, with the pair opening with a bearish gap and trading around 1.3425. 

Cryptocurrencies: The crypto market is showing some resilience in the face of the geopolitical turmoil. Bitcoin rose over 1% to trade above $92,000,continuing a five-day winning streak since the start of the year tracking a modest uptick in tech-heavy Nasdaq futures and finding some support from bargain buying after its 6.4% loss in 2025. Treasuries: U.S. Treasury yields are expected to fall as investors seek the safety of government bonds. 

Looking Ahead 

Today’s trading will be dominated by the market’s reaction to the fast-moving developments in Venezuela. President Trump’s rhetoric and any further military or political actions will be closely scrutinized. Beyond the geopolitical headlines, the release of the U.S. ISM Manufacturing PMI will provide the first major health check on the U.S. economy in the new year. A strong number could add to the dollar’s strength, while a weak print could temper the safe-haven bid and revive hopes for a more dovish Fed. With the market on edge, traders should be prepared for a volatile session.

What to Watch Today: 

• The Venezuela Fallout: This is the dominant market narrative. The situation is extremely fluid. Any signs of a prolonged U.S. involvement, disruptions to oil supply, or a spillover into other regional conflicts would be a major “risk-off” catalyst. 
• The Data Deluge Resumes: This is the theme of the week. After weeks of flying blind, the market is finally getting a flood of delayed U.S. data, including the crucial December jobs report on Friday. Expect significant volatility as the market finally gets a clearer picture of the economy. 
• BoJ’s Hawkish Stance: BoJ Governor Ueda’s commitment to further rate hikes is a major new theme for 2026. This is a significant tailwind for the Yen and a potential headwind for the popular Yen-funded carry trades. 
• The “Santa Claus Rally” Hangover: After a mixed end to the year, the market is now looking to see if the traditional January effect can provide a boost. The strong start in Asian tech is a positive sign, but the geopolitical risks are a major headwind.