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Regional markets – Expect uncertainty as geopolitics and oil policy set the tone

Regional markets enter the first full trading week of 2026 with a geopolitical bang, setting an uncertain tone at the start of the year. The weekend overthrow of Venezuela's President Nicolás Maduro introduces headline risk and raises the likelihood of some oil price volatility in the near term. Venezuela's current oil production remains limited at below 1 million barrels per day, or under 1% of global supply. With global oil markets oversupplied and first-quarter demand seasonally weak, near-term pricing remains anchored in producer policy. As a result, attention turns to today's OPEC+ meeting, where guidance on supply is expected to set the direction for crude prices this week.

Global markets – Macro data to drive growth and interest rate expectations

Global markets face an active start to the year as macro data shape expectations for growth and monetary policy. In the US, the non-farm payrolls report will guide views on labour- market momentum and the Federal Reserve's policy path. In Europe, euro-area PMI and confidence indicators may clarify whether activity stabilised after a weak end to 2025. In Asia, China's manufacturing PMI and trade balance will shape expectations for demand, exports, and commodities. Thinner liquidity following the holiday period could amplify market reactions across asset classes.

Note to Management – Prioritise OPEC+ signals over Venezuela headlines

Venezuela holds the world’s largest proven oil reserves at approximately 414 billion barrels, ahead of Saudi Arabia, Canada, and Iran (see chart RHS). While this establishes Venezuela as a long-term supply optionality story, current production constraints mean it has limited influence on near-term oil balances. Oil markets have largely priced in Venezuela’s low output, with oversupply, elevated inventories, resilient US shale production, and OPEC+ policy continuing to weigh on prices. Any immediate price response to recent events is expected to be modest unless physical disruptions materially exceed expectations. With demand soft into early 2026, coordinated supply policy from OPEC+ remains the dominant driver of oil prices, with meeting outcomes and guidance likely to matter more than Venezuela-related developments in the near term.

Last week in the GCC, Bahrain (+0.1%) partly recovered its prior week loss. Saudi Arabia (+0.2%) extended its gain as the country’s National Debt Management Center said it completed arrangements for a $13 billion loan to help finance power, water and public utilities projects. Dubai (-0.3%) ended a five weeks rising streak, hit by losses in real estate and banking stocks. Abu Dhabi (-0.4%) and Qatar (-0.4%) clocked identical losses. Qatar was weighed down by selling pressure from both foreign retail and institutions. Kuwait (-0.8%), and Oman (-1.0%) reversed their gains.

US markets fell last week. The Nasdaq Composite (-1.5%) slid the most, followed by the S&P 500 (-1.0%), and the Dow (-0.7%). Profit booking, a pullback by technology stocks, and latest FOMC minutes showing mixed views on interest rates outlook resulted in market weakness. In Europe, the DAX (+0.8%) rose for a sixth successive week, STOXX600 (+1.3%) advanced, while FTSE100 (+0.8%), and CAC40 (+1.1%) recovered their losses.