As 2026 continues the turmoil from past years, tariffs, sanctions, and industrial policy are rerouting supply chains away from direct US-China trade into "connector" economies, namely Mexico, Vietnam, ASEAN hubs, and parts of Europe that allow firms to diversify sourcing while maintaining access to multiple markets. This shift, visible in US import data tilting toward Mexico and Vietnam, reflects de-risking rather than deglobalisation, with Europe simultaneously reducing critical dependencies through new trade agreements like Mercosur while deploying trade-defence tools. The competitive edge now favours companies with multi-regional manufacturing and flexible logistics over single-country "lowest cost" models, pointing investors toward geopolitically diversified plays: firms enabling reshoring and friend-shoring (industrial automation, logistics infrastructure, and supply-chain software), selective exposure to connector markets capturing redirected capital, and higher risk premiums for businesses dependent on stable US-China access. The result is a world of regional trade blocs, duplicated capacity, and elevated policy volatility, where portfolios should prioritise optionality, multiple revenue, and sourcing paths over reliance on any single dominant trade relationship.
EQUITY
Stocks extended their winning streak as investors prepared for major tech earnings and a Federal Reserve policy decision, with Apple, Microsoft, Meta, and Alphabet driving the bulk of the gains. Investors are set to seek evidence that substantial AI investments are generating tangible returns, while the Federal Reserve's two-day meeting is expected to result in rates being held as is, though Fed Chair Jerome Powell's departure in May and his replacement remain hot topics.
GOLD
Gold price dipped just below $5,000 before rebounding and holding steady near $5,100. Currency debasement from government debt and inflation may be the core reason for endless demand, but geopolitical tensions, including the Venezuela incursion and Greenland acquisition, have also whispered a quiet shift away from fiat with central banks that have strained Western relations continuing to purchase gold aggressively to diversify away from dollar-based assets.
OIL
Brent crude oil dipped below $65 per barrel, with risk revolving around production losses in the United States, where a severe winter storm knocked out approximately 2 million barrels per day, roughly 15% of national output, and caused operational issues at Gulf Coast refineries. Aircraft carrier deployment to the Middle East raises alarms given rising friction with Iran and ongoing restrictions on Russian crude exports due to stalled peace talks with Ukraine.
CURRENCY
The dollar index held near four-month lows around 97 ahead of the FOMC meeting, while China's yuan retreated from a 32-month high after the People's Bank of China set a weaker daily fixing at 6.9858 per dollar, deliberately guiding the currency lower to prevent disorderly appreciation as the Lunar New Year approaches. The Japanese yen remained firm near two-month highs on speculation of coordinated U.S.-Japan currency intervention.
