The Russians have captured the FT, apparently! The headline that Gilts are about to crash because the Government will borrow more to increase defence spending is Pravda 101. The reality is Gilts should rally on increasing the strategic deterrence that defence spending will create.

Gold surges through $5000 and markets remain distracted by the sturm et drang of words and events. The world is changing – but are we thinking about all the wrong things? The real issue for the future may be investment choices between authoritarian states vs nimble democratic nations.

It’s one year since Trump took office for a second time. It’s been dramatic. It’s been eventful – and it’s been destructive and destabilising. The winners are Putin and Xi. The losers are the West. But have we now reached peak-Trump? Europe is the key – the continent has to wake up to the coming opportunities.

Rising risks, geopolitical positioning, conflict, and strategic compression will be the themes for coming decade. Who will rise, who will fall? What are the implications for markets. Do not expect easy answers. This is unlikely to play out as anyone predicts.

Markets have opened strongly in 2026 and seem remarkably sanguine towards rising geopolitical instability and shocks. They’re buying a rosy outlook of rising profits, lower rates and costs, and are blithely unconcerned by the risks of destabilisation from conflict or competition.

Concepts about global law and order were left by the wayside over the weekend – Trump’s administration delivered what it said it would in terms of America First, Western Hemisphere focus. Do Venezuela and Iran raise or diminish the risks of Global Conflict in 2026. What comes next?

The Chinese curse about living in “interesting times” is a boon to anyone fascinated by markets. There is no shortage of excitement coming our way next year – everything from conflict threats, renewed inflation, the return of QE, to the Space X IPO. But the thing is… we really don’t know….. we never have!

2026 Outlooks contain rosy predictions for stock market upside, calmer bond markets, the triumph of AI, and even a few who still say Bitcoin will rule us all. But the major Macro risk will be global trade – what happens as China and the USA face off? Trump has fractured the Western Alliances even as China’s trade and military strength give it all the options. What will Emperor Xi choose to do?

The end of the exceptional American Century is happening faster than we think. America is dispensing with friends and allies, and American Tech leadership is no longer unquestioned. It spells rising instability and threats. Defence has never been more critical as Europe seeks to define its future.

“The Atlantic is no longer a pond, but has become an ocean once more.”

There are deals and there are deals. Some are good. Some are bad. Some are necessary – but will ultimately change everything. The US/Europe trade deal – much like the deals struck with the UK and Japan – is better than the alternative of no-deal, but at heart it’s a bad deal. There will be consequences.