The first full week of the new year immediately offers an interesting economic calendar
Markets
The US intervention in Venezuela over the weekend is grabbing lots of media attention but not so much that of the markets. Geopolitical events rarely impact markets on a lasting basis. The Trump administration ultimately strives for a regime shift with motives stretching from Maduro seen as the illegitimate (and now former) president to Venezuela lambasted as a narco-state impacting the US over the opportunities seen in the country’s failing oil industry. Haven assets including gold are rising this morning but so are the riskier segments in the market. Asian stocks surge up to 3% at the open, led by Japan. The Nikkei225 is inches away from its October 2025 record high. Oil prices swung between losses and gains only to trade little changed at around $60.5 per barrel currently (Brent). US government bonds gain a little. Yields erase some of Friday’s slight gains. Curves turned steeper at the end of last week, particularly in Europe where rates rose between 1.7 and 6.4 bps in the German case. 10-yr tenors (swap, Germany) are nearing important technical levels around 3%. Japan shows a similar steepening this morning. The traditional upcoming supply at the start of the year, corporate and governments alike, is a potential driving force. Slovenia (new 10-yr benchmark EUR transaction today) is a case in point. The jury’s out on the eventual impact of supply on the curve with many (especially sovereigns) targeting shorter maturities to reduce interest rate costs. But the sheer - often record - amount of financing needs is bound to push yields generally higher. The US dollar extends its recent bottoming out process. The gradual recovery of the trade-weighted index kicked in since Christmas Eve at sub 98 and built to 98.66 currently. Everything remains the same technically in 2026 as in 2025 though. EUR/USD is no different with the pair depreciating back below 1.17 after hitting 1.18 two weeks ago. The sideways trading range between 1.14 and 1.19 in place since the summer of 2025 is very much in play. A slightly weaker euro also drags EUR/GBP back below 0.87 for the first time since October.
The first full week of the new year immediately offers an interesting economic calendar that should already shape central bank expectations for the broader Q1, particularly for the Fed. The US kicks off with the manufacturing ISM (December) today with the services gauge due on Wednesday, along with the ADP job and JOLTS reports. Friday’s December payrolls are the highlight. Inflation numbers are due in the euro area but won’t alter market expectations for the ECB’s status quo.
News and views
The eight OPEC+ countries (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman) reaffirmed their November decision to pause production increments in February and March. Delegates said that they didn’t discuss Venezuela in their monthly update and that it’s premature to assess the impact of the situation and the cartel’s reaction function to it. Lowest oil prices in four years’ time and forecasts of a significant global oil surplus are key considerations. OPEC+ meets again on February 1st. The next official OPEC meeting is scheduled for June 7, 2026.
The private (RatingDog) Chinese services PMI stabilized at 52 in December (from 52.1), matching consensus forecasts. The statement suggested that a smaller number of, especially Japanese, tourists was responsible for a renewed drop in new export business. The employment component slipped further into contraction territory (48.9 from 49.2) while prices charged fell compared with November. The manufacturing PMI was already published last week and unexpectedly returned above the 50 boom/bust mark (50.1 from 49.9). Both output and new orders rose compared to November. Official PMI’s showed a similar end-of-year rebound driven by large manufacturing firms.
Author
KBC Market Research Desk
KBC Bank
