​Since the beginning of 2026, geopolitics has increasingly moved back to the centre of financial-market risk, led by the escalation between the US and Iran. The conflict has shifted from a regional military confrontation into a broader threat to global trade infrastructure, with Iran using asymmetric naval tactics, including fast boats, vessel seizures and threats around the Strait of Hormuz, while the US has responded with a naval blockade and efforts to secure maritime corridors. Shipping traffic through the strait has fallen sharply, with reports indicating that only a few ships passed through the waterway in a recent 24-hour periods compared with a pre-war average of around 140, leaving hundreds of ships and thousands of seafarers stranded in the Gulf. This has reinforced the importance of strategic chokepoints as a macro-financial risk, as disruptions now feed directly into global shipping, insurance costs, supply-chain reliability and inflation expectations.
At the same time, US political risk has remained elevated, with trade policy again becoming a key source of uncertainty. The continuation of Trump’s tariff agenda has complicated corporate planning, strained relations with allies and reinforced concerns around policy unpredictability, while the unresolved legal and political disputes around tariff refunds have added another layer of uncertainty for large importers. From there, the trade-policy debate naturally extends to the broader US-China conflict, where tariffs, export controls, critical minerals, manufacturing reshoring and technology restrictions remain central points of tension. Trump’s China tariffs helped reduce the US goods trade deficit with China in 2025, but did not materially change China’s industrial policy, while renewed disputes in 2026 have kept the relationship fragile ahead of further negotiations.

​Over the past two weeks, the US–Iran conflict has shifted from a tentative stabilisation phase back into renewed escalation, reinforcing the fragility of any diplomatic progress. Following initial attempts to de-escalate through a temporary ceasefire and negotiations, the situation deteriorated quickly as violations emerged and trust between both sides eroded. Diplomatic talks ultimately failed, leading to a resumption of military activity centred around the Strait of Hormuz, including targeted strikes and increased naval presence. Most notably, the conflict has moved beyond isolated engagements towards a broader strategic confrontation, with measures aimed at disrupting Iran’s economic and energy infrastructure, significantly raising the risk of prolonged instability and further escalation across the region. 

​Throughout 2025, the US macroeconomic environment was characterised by a gradual normalisation following the post-inflation shock period of prior years. Inflation was largely brought under control, consistently hovering in a narrow 2-3% range - still above the Federal Reserve’s formal 2% target, but sufficiently contained to reduce its dominance in policy deliberations. As price pressures stabilised, the Fed progressively shifted its focus towards labour-market dynamics, with unemployment emerging as the marginal variable guiding monetary policy decisions. During the first half of the year, policymakers remained deliberately cautious, refraining from early rate cuts amid concerns that premature easing could reignite inflation, particularly given still-historically strong employment conditions, even as unemployment began to trend higher. This stance changed in the autumn and winter months, when a clearer softening in labour markets, combined with inflation remaining at tolerable levels, provided the Fed with sufficient confidence to pivot. Over this period, the central bank implemented three 25 basis-point rate cuts, signalling a controlled transition towards a more accommodative stance while maintaining credibility on inflation containment.

​The opening weeks of 2026 have already delivered one of the most explosive geopolitical shocks in recent memory, with the United States mounting a military operation that captured Venezuelan President Nicolás Maduro and transported him to the US to face federal charges, effectively removing him from power and handing de-facto control of Caracas to interim authorities. The US administration has signalled it will “run” Venezuela through a transition period while leveraging newly accessible state oil resources, including the planned transfer of 30–50 million barrels of previously sanctioned crude to US markets. The strategic motive for this bold action extends beyond regime change. Venezuela holds the largest proven oil reserves in the world, particularly heavy crude concentrated in the Orinoco Belt, whose grades are unattractive to many refiners but essential for certain US refineries. Regaining control over this crude not only offers a potential boost to US energy security, it also explicitly aims to curtail the flow of subsidised Venezuelan oil to geopolitical competitors, most notably China (which has been a major buyer and financier) and Cuba, whose power grids and economy have entirely depended on Venezuelan shipments.