Today’s Outlook:
• US MARKET : U.S. equity markets declined for a third consecutive session after minutes from the Federal Reserve’s December meeting revealed a more cautious stance on further interest rate cuts. Policymakers expressed concern that inflation may remain elevated longer than anticipated. While some officials still see scope for additional easing if inflation continues to moderate, others favor maintaining current rates amid signs that disinflation momentum is slowing.
This shift reflects a less dovish tone from the Fed, with several members warning that premature rate cuts could undermine the central bank’s credibility in achieving its 2% inflation target. As a result, major indices including the S&P 500, Nasdaq 100, and Dow Jones Industrial Average came under pressure.
Despite broader market weakness, Intel and Meta shares advanced on company-specific positive developments, even as the technology sector overall remained in negative territory. Investors also monitored seasonal patterns such as the Santa Claus rally, though recent declines have raised uncertainty over whether the typical year-end rebound will fully materialize. Nevertheless, U.S. equities are still expected to post solid annual gains, supported by resilient economic fundamentals and expectations of eventual monetary easing.
• EUROPEAN MARKET : European equities opened 2026 on a positive note, briefly reaching record highs before paring gains by the close. The STOXX 600 rose 0.6%, while the UK’s FTSE 100 gained 0.2% after briefly surpassing the 10,000 level. Germany’s DAX edged higher by 0.1%, and France’s CAC 40 advanced 0.6%.
However, macroeconomic data highlighted ongoing challenges. Eurozone manufacturing conditions deteriorated toward the end of 2025, with output declining for the first time since February. The Eurozone Manufacturing PMI fell to 48.8 in December, its lowest level in nine months, signaling deepening contraction.
In the UK, housing market data disappointed, with house prices falling 0.4% in December and annual growth slowing to 0.6% in 2025 — the weakest pace since April 2024. While UK manufacturing expanded for a second straight month, supported by stronger domestic demand and inventory rebuilding, declining exports, employment, and business confidence raised concerns about the durability of the recovery.
• ASIAN MARKET : Asian equity markets opened the new year higher, led by gains in Hong Kong and South Korea as technology shares rallied. Trading volumes, however, remained subdued due to holiday closures in Japan and mainland China.
Risk appetite was underpinned by continued strength in technology and semiconductor stocks, extending momentum from late 2025. Most Asian markets ended the year with strong gains, driven by robust demand for artificial intelligence applications, data centers, and advanced semiconductors. Hong Kong equities rose 2% on Friday, while the Hang Seng Index closed 2025 with gains exceeding 27%, supported by optimism over China’s push for semiconductor self-sufficiency.
• COMMODITIES : Oil prices rose in early Asian trading on Monday, reversing earlier losses following reports that the United States had captured Venezuelan President Nicolas Maduro and declared control over the country. Market participants also assessed OPEC+’s decision to maintain current production levels amid escalating political tensions between Saudi Arabia and the United Arab Emirates related to the conflict in Yemen.
Brent crude futures for March delivery rose 0.3% to USD 60.90 per barrel, while West Texas Intermediate (WTI) crude edged up to USD 57.16 per barrel.
• INDONESIA : The JCI began 2026 on a positive footing, closing Friday up 1.17% at 8,748.13. Trading activity remained concentrated, with liquidity largely absorbed by BUMI shares. In the affordable internet service provider sector, INET began trading at its new theoretical ex-rights price (TERP).
Looking ahead, domestic markets are expected to react to geopolitical developments surrounding U.S. actions in Venezuela, which could trigger increased trading volumes in oil-related stocks and issuers with exposure to the energy sector.
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