Welcome back to Market Minute for 2026. I’m Bryce Anderson Senior Portfolio Manager at Morningstar Investment Management. As we fly through January, there’s been no shortage of developments to catch up on—both at home and offshore.

Over the past month, a number of geopolitical events have captured investors’ attention. Most notably, the US intervention in Venezuela and the arrest of President Nicolás Maduro, alongside rising tensions between the US and key European partners over Greenland, and the desire of the US to control the territory.

President Trump has argued that Greenland is strategically important for US security given its geographic position in the Arctic. The territory is also believed to hold significant deposits of rare earth and critical minerals, adding an economic dimension to what is already a sensitive geopolitical issue.

These events amongst others have increased global uncertainty—and that has flowed through to several key asset classes.

We’ve seen strong gains in gold and silver, alongside weakness in the US dollar. Investors have leaned into traditional safe-haven assets amid concerns about broader geopolitical risk and concerns about US policy direction have weighed on the US dollar.

Meanwhile, in Japan bond yields have spiked considerably as investors braced for increased government spending should the incumbent win the snap election called recently.

Turning to Australia, inflation has been the dominant domestic theme. CPI remains persistently elevated, with recent data again surprising to the upside. Figures released this week showed inflation for the year to December running at 3.8%, driven primarily by housing costs and higher electricity prices following the expiry of government subsidies.

These inflation prints have had a clear impact on markets:

  • Expectations of interest rate cuts are now off the table, with markets increasingly pricing the risk of a rate hike as inflation remains above the RBA’s target band and proves slower to cool.
  • The yield curve has shifted higher, particularly at the front end. The 10-year Australian government bond yield sitting around 4.8%.
  • The Australian dollar has strengthened, supported by the inflation data and a softer US dollar, trading just shy of 70 US cents.

Equity markets globally have been relatively muted over the past month, despite all the noise. In Australia, resources stocks have been a clear standout, benefiting from higher precious metal prices and a modest easing in fears around a sharp China slowdown.

At Morningstar Investment Management, our approach to navigating the risks out there is to prepare portfolios rather than attempt to predict outcomes. We focus on building portfolios with exposure to a range of return drivers that can perform across different market environments, while tilting toward areas where valuations are attractive over the long term. Often, it’s the short-term noise that creates the best long-term opportunities.

That’s all we have time for on the return of Market Minute for 2026—thanks for joining us, and we’ll see you next time.