The past week in financial markets was particularly significant, as it included the final days of 2025 and the first days of 2026 \u2014 a combination that helped shape trends likely to influence both years. In this weekly report, we highlight the key developments that closed out 2025 and those that marked the start of the new year.<\/p>\n\n\n\n
While the year ended quietly, with investors confident about the outperformance of certain assets and the decline of others, the new year began with considerable turbulence. Important economic data was released, alongside a global shock over the weekend after President Donald Trump announced that US forces had carried out a strike in Venezuela and arrested President Nicol\u00e1s Maduro and his wife.<\/p>\n\n\n\n
These events are expected to be the most influential drivers for markets when trading resumes on Monday morning at the start of a new week.<\/p>\n\n\n\n
The US Dollar in 2025<\/strong><\/p>\n\n\n\n The US dollar ended last week with strong gains, supported by several factors that fueled its upward momentum through Friday. On an annual basis, however, the dollar index declined due to multiple influences, including several interest\u2011rate cuts by the Federal Reserve throughout the year.<\/p>\n\n\n\n The currency was also affected by political factors, such as the tariffs imposed by President Donald Trump on imports from most of the United States\u2019 major trading partners.<\/p>\n\n\n\n The Fed\u2019s messaging \u2014 accompanying three rate cuts between September and December \u2014 played a major role in shaping the dollar\u2019s performance. Chair Jerome Powell repeatedly emphasized that inflation was moving in the right direction and approaching the central bank\u2019s target.<\/p>\n\n\n\n The Fed also signaled on several occasions that further rate cuts were likely, citing pronounced weakness in the US labor market throughout the year.<\/p>\n\n\n\n However, on a weekly basis, the dollar received strong support from the Fed\u2019s latest meeting minutes, which contained hawkish signals suggesting the central bank may keep rates unchanged in the near term. Traders interpreted this as a sign that the Fed may pause its rate\u2011cutting cycle, helping the dollar secure weekly gains.<\/p>\n\n\n\n Positive US data also contributed significantly to the dollar\u2019s strength last week. Weekly jobless claims fell by 16,000 to 199,000 \u2014 far better than expectations of an increase to 218,000 \u2014 reflecting resilience in the labor market.<\/p>\n\n\n\n The dollar also benefited from rising home prices, as shown in the S&P\/Case\u2011Shiller 20\u2011City Composite Index, which rose 0.3% month\u2011on\u2011month<\/strong> and 1.3% year\u2011on\u2011year<\/strong>, beating forecasts of 0.1%<\/strong> and 1.1%<\/strong> respectively.<\/p>\n\n\n\n Additionally, the Chicago PMI climbed to 43.5<\/strong>, an increase of 9.2 points<\/strong> from the previous month, surpassing market expectations of 40<\/strong>. These figures strengthened confidence in the US economy and boosted demand for the dollar.<\/p>\n\n\n\n Gold in 2025<\/strong><\/p>\n\n\n\n Despite gaining more than 70%<\/strong> over the course of 2025, gold recorded weekly losses due to the dollar\u2019s strength. The metal\u2019s decline last week was driven by the stronger dollar, supported by the Fed\u2019s meeting minutes and upbeat economic data.<\/p>\n\n\n\n The minutes showed a clear inclination to keep interest rates unchanged and pause further cuts for the time being.<\/p>\n\n\n\n On an annual basis, gold\u2019s impressive rise \u2014 exceeding 70% \u2014 was fueled by several key factors:<\/p>\n\n\n\n US equities ended last week in negative territory<\/strong>, weighed down by several factors that bullish investors believe could reduce the likelihood of interest\u2011rate cuts in the coming period. The Federal Reserve\u2019s meeting minutes leaned toward quantitative tightening, after the Federal Open Market Committee included language in its December statement warning that inflation could rise to unsafe levels, according to minutes released last Wednesday.<\/p>\n\n\n\n The minutes from the December 9\u201310 Fed meeting revealed a clear division over cutting interest rates. The committee approved a 25\u2011basis\u2011point cut<\/strong> by a vote of 9\u20133<\/strong> \u2014 the largest dissent since 2019 \u2014 bringing the new target range to 3.50%\u20133.75%<\/strong>. Most members believed further cuts would be appropriate if inflation continued to decline, while others warned against moving too quickly and preferred holding rates steady after this cut.<\/p>\n\n\n\n Although the Fed expects the economy to grow at a moderate pace, it highlighted risks to employment and the possibility of inflation re\u2011accelerating, which made the vote more balanced. The minutes also noted that some members who supported the cut were equally prepared to support keeping rates unchanged.<\/p>\n\n\n\n The Dot Plot \u2014 the committee\u2019s official projection tool \u2014 indicated the possibility of another rate cut in 2026<\/strong> and a further cut in 2027<\/strong>, bringing the policy rate down to 3.00%<\/strong>, which the Fed considers a neutral level<\/strong>. However, dissenting members expressed concern about the slowing progress<\/strong> toward the Fed\u2019s 2.00% inflation target<\/strong>.<\/p>\n\n\n\n The Fed also noted that Trump\u2019s tariffs temporarily pushed inflation higher, with the impact expected to fade in 2026 \u2014 another signal of a tilt toward tightening and keeping rates unchanged for now.<\/p>\n\n\n\n Subsequent data showed a slowdown in hiring without an increase in layoffs, while inflation continues to ease but remains above target. Meanwhile, the broader economy posted strong growth of 4.3%<\/strong> in the third quarter, despite delays in some data releases caused by the government shutdown.<\/p>\n\n\n\n Markets now expect the Fed to hold rates steady<\/strong> in upcoming meetings, especially given the absence of official commentary during the holiday period.<\/p>\n\n\n\n The committee also voted to resume bond purchases \u2014 $40 billion per month in short\u2011term Treasuries \u2014 to ease funding\u2011market pressures. However, it stressed that these purchases serve a balance\u2011sheet management purpose<\/strong>, not a return to quantitative easing.<\/p>\n\n\n\n Economic data released last week also contributed to the decline in US equities, as improving labor\u2011market indicators reduced the urgency for rate cuts. Seasonal factors also played a role, including lower market liquidity as many investors stepped away for the Christmas holidays and closed significant trading positions.<\/p>\n\n\n\n Additionally, annual portfolio rebalancing by investment funds \u2014 aimed at diversifying holdings and adjusting asset sizes \u2014 added further pressure on stock performance.<\/p>\n\n\n\n Oil prices fell last week due to the strong US dollar and a build\u2011up in US inventories, although geopolitical risks, strong Chinese demand, and the OPEC+ production freeze helped limit the losses. The market now appears to be entering a period of fragile balance between supply pressures and support from global demand.<\/p>\n\n\n\n Crude prices saw mixed movements on Tuesday: WTI February futures slipped 0.3%, while gasoline futures rose around 0.4%. The decline followed a rise in the US dollar index to its highest level in a week, which weighed on dollar\u2011denominated commodities.<\/p>\n\n\n\n Oil also came under pressure after US inventory data showed an unexpected increase of 405,000 barrels in crude stocks, compared with expectations of a 2\u2011million\u2011barrel draw. Gasoline inventories rose 2.86 million barrels, far above forecasts of 1.1 million, and stocks at Cushing storage hub climbed by 707,000 barrels, adding further downward pressure.<\/p>\n\n\n\n Despite the decline, several factors helped limit losses, including ongoing tensions in Venezuela, Nigeria, and Russia, as well as recent US strikes on ISIS targets in Nigeria.<\/p>\n\n\n\n Sources within OPEC+ confirmed that the group will stick to its plan to freeze production increases during the first quarter of 2026, in an effort to stabilize the market amid expectations of a record global surplus of 4 million barrels per day.<\/p>\n\n\n\n Data from Kpler indicated that China\u2019s crude imports are set to rise 10% month\u2011on\u2011month to a record 12.2 million barrels per day, as the country rebuilds its inventories.<\/p>\n\n\n\n Adding to market volatility was the US special\u2011forces operation in Venezuela, which resulted in the arrest of President Nicol\u00e1s Maduro \u2014 an event expected to trigger sharp price spikes when markets reopen in the new week.<\/p>\n\n\n\n Footage published by US media on Sunday, 4 January, showed Maduro in a New York detention facility following the elite US military operation in Caracas, during which he and his wife were captured and transferred to the United States.<\/p>\n\n\n\n The operation, carried out before dawn on Saturday (local time), sparked widespread debate over the legality of US actions and their compliance with international law.<\/p>\n\n\n\n President Donald Trump defended the operation in a press conference, stressing its legality and stating that Washington would \u201ctemporarily administer Venezuela to ensure a safe transition of power.\u201d He also noted that US oil companies would be able to return to Venezuela and invest in its energy sector.<\/p>\n\n\n\n The US administration accuses Maduro and his government of involvement in drug\u2011trafficking activities targeting the United States, and Trump has accused Venezuela of \u201cstealing American oil.\u201d<\/p>\n\n\n\n While Trump\u2019s supporters welcomed the announcement of Maduro\u2019s arrest, prominent Democratic lawmakers criticized the president\u2019s actions, arguing that he overstepped constitutional limits by launching a military operation abroad without prior approval from Congress.<\/p>\n\n\n\n Markets are bracing for several important developments in the new week, most notably the evolving situation in Venezuela, which is expected to have a significant impact on oil and gold prices.<\/p>\n\n\n\n Over the coming days, the U.S. will release key employment data, beginning with preliminary indicators, followed on Friday by the non\u2011farm payrolls report, which tracks job growth, along with wage growth figures, unemployment metrics, and productivity data.<\/p>\n\n\n\n Earnings reports from several companies listed on major global stock indices will also be released this week, and these results are expected to have a meaningful influence on price movements in equity markets.<\/p>\n","protected":false},"excerpt":{"rendered":" The past week in financial markets was particularly significant, as it included the final days of 2025 and the first days of 2026 \u2014 a combination that helped shape trends likely to influence both years. 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Wall Street Stocks<\/strong><\/h1>\n\n\n\n
Oil and Venezuela Tensions<\/strong><\/h1>\n\n\n\n
The Week Ahead<\/strong><\/h1>\n\n\n\n