Investment update - January 2026
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Published on 26 Feb 2026In January, markets were consumed by escalating geopolitical tensions in the Middle East, with the threat of US military strikes on Iran, alongside President Trump’s nomination of Kevin Warsh as the next Chair of the Federal Reserve. Warsh’s nomination triggered a sharp sell-off in precious metals and bitcoin, along with heightened equity volatility, and uncertainty around the future direction of monetary policy.
Despite this, equity markets were generally strong, supported by fiscal stimulus and easing monetary policy. The S&P/ASX 200 increased by 1.7%, Japan’s Nikkei gained 5.9%, and Emerging Markets climbed 3.6%. The Australian dollar increased 5.1% against the US dollar, while copper rose 5.9%, gold surged 14.1%, and oil jumped 13.6% amid geopolitical risks and strong demand linked to AI-driven industry activity.
In the US, economic data was mixed but generally positive, with ISM Manufacturing rebounding to 52.6 and non-manufacturing holding at 53.8, though jobless claims rose. In Australia, strong inflation data led the RBA to lift rates to 3.85%. In Europe, activity showed modest improvement, while Japan remained robust, with both manufacturing and services Purchasing Managers’ Indices (PMIs) strengthening further and China’s PMIs slipped back into contraction.