Risk Assets are Up and Running in 2026

Risk assets have started on a strong footing in 2026, with traders appearing unconcerned with the latest actions by the US in Venezuela. It is common for equity markets to become wary during periods of geopolitical drama, yet this isn’t the case here for one reason only: there does not seem to be any upside threat of inflation. It may, in fact, be quite the opposite if more Venezuelan oil now makes its way onto the global market.
As the S&P 500 closes out another day by setting new record highs, it would appear that this is another military intervention by the US that the markets have absorbed with peace. Even the Venezuelan stock market has gotten into the act. It is now a case of waiting to see how seamlessly the transition of power occurs in Venezuela.

Oil prices have swung in the wake of Maduro’s removal from power, but the bigger takeaway is that Venezuela is likely to add more, not less, oil to the global market as a result. The country’s heavy oil is more difficult and costly to extract and refine than lighter crude oil, meaning boosting output won’t be quick or easy. Even if U.S. companies are encouraged to invest in Venezuelan oil infrastructure, it will take substantial time and capital before production rises significantly. That’s why the oil price moves this week have not been off charts.

The recent events in Venezuela have reminded markets of just how quickly geopolitical risks can flare up, and with uncertainty about what might happen next, many traders have moved into gold and silver as a safety play. Normally, risk assets like stocks and defensive assets like precious metals don’t rise together, but right now both are gaining as investors look to hedge against future instability. Silver has climbed back above $80 per ounce, while gold has reclaimed around $4,500 and could push toward new highs if the current buying momentum continues. Levels to watch for spot gold this week include support near $4,452 and $4,410, with resistance around $4,518 and $4,540.

In terms of currencies, the AUD has had a strong start, rising around 1% against the US Dollar. This rise has been sustained by higher commodity prices and expectations that Australia can increase interest rates next. The AUD/USD rate has reached its highest peak in the scope of a year, trading around 0.6740. All attention is now on Australia’s upcoming inflation (CPI) report. If inflation surprises to the upside again, the Aussie could push past 0.6750. On the other hand, if inflation eases, some profit-taking could follow after the recent rally.

Looking forward, US jobs data will be the essential force for markets this week. The ADP report is due today, whereas jobless claims come tomorrow, and Friday brings the official nonfarm payrolls (NFP) report, which is the main priority. Markets are watching closely for any signs that could affect the timing of the next Federal Reserve rate cut. Expectations for Friday’s NFP are around 65,000 new jobs, similar to the previous reading. If the data shows modest growth—enough to support Fed rate cuts but not so weak as to raise economic alarm—it could help maintain the current positive momentum in risk assets.

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