The Roundup – January 2026
Global Growth Gaining
In January the International Monetary Fund lifted its 2026 forecast for global growth 0.2% higher to 3.3%. The revision was twofold, momentum around AI productivity gains and investment into the thematic pushed asset valuations higher, while tariff-related concerns eased as countries and companies proved capable of adapting.
Spain and the US have both seen the IMF increase their estimate of economic output for the year by 0.3%, to 2.3% and2.4% respectively. The agency cited Madrid’s boost in technology investment, while significant investment into artificial intelligence infrastructure such as data centres and power grids, partially drove Washington’s increase.
The lender characterised global growth as “quite resilient” but conceded that several risks remain. A continuation of the fast-paced boom-like nature of AI investment could potentially fuel inflation, however AI could also be the catalyst to a material market correction if expectations around profits and productivity don’t materialise.
The IMF view the balance of risks to global output as tilted to the downside, with supply chain disruptions from escalating trade tensions, market weakness from geopolitical events, and the consequences of diminished Central Bank independence also posing a threat to the broader economy.
New World Order
The beginning of the year has witnessed a fresh round of geopolitical triggers including the capture of the Venezuelan President by US agents, threats from Washington to acquire Greenland (a territory of fellow NATO member Denmark) and accompanying tariffs against those countries that stand in its way.
Oil-rich Venezuela found itself the focus of a military operation that saw its leader seized and transported to US soil. Oil markets lifted, given the uncertainty surrounding the world’s largest oil reserves and subsequent demands from Washington for the Latin American nation to open its energy industry to American oil companies.
However wider market reaction was generally muted, reflecting the size of Venezuela’s GDP relative to global output. Sharemarkets largely looked through the developments, while gold’s safe-haven status saw it rise off the uptick in uncertainty. In contrast, the markets were more responsive to the fraying relations between the US and its partners.
Since the beginning of President Trump’s second term, the White House has aggressively pursued its America First stance, creating friction with its long-standing allies, pushing them to reassess their dependence on the US for trade and security. Increasingly persistent remarks by the President about acquiring Greenland, have further strained relations.
Concurrently, the European bloc made inroads in diversifying its trading partners, finalising a trade agreement with the South American trade bloc, Mercosur, following 25 years of talks. Similarly, progress was made on a Free Trade Agreement with India which has been stagnant since negotiations resumed in 2022 following an extended pause.
The Greenland assertions unsettled markets, resulting in a lift in volatility and reviving the “Sell America” trade, reducing exposure to US linked assets in favour of other economies such as Europe. The dollar sold off over the month against a basket of other developed market currencies, while sharemarkets and US treasuries also took a hit.