05th January 2026

VENEZUELA

US Captures Maduro, Declares Temporary Control

President Trump announced the US captured Venezuelan President Maduro in an audacious raid and whisked him to New York to face drug-trafficking charges.

Trump said as part of the takeover, major US oil companies would move into Venezuela - which has the world’s largest oil reserves - and refurbish badly degraded infrastructure, a process experts say could take years.

Venezuela’s state-run PDVSA has begun cutting crude production because it is running out of storage capacity due to the US blockade that has reduced exports to zero.

(Reuters, Bloomberg)

Oil Market Implications

The raid raises potential for higher crude output weighing on prices over time, Goldman said.

Production will probably reach up to 1.4 million barrels per day within two years, according to JPMorgan.

However, the transition may trigger a short, sharp shock with production temporarily falling.

Morgan Stanley analysis shows state-owned Chinese and Russian companies have some of the biggest claims on Venezuela’s oil.

(Bloomberg)

Political Fallout

Trump said Sunday the US might launch a second military strike if remaining members of the administration don’t cooperate.

Acting President Delcy Rodríguez invited the US to work together in a “balanced and respectful” relationship. Trump said Washington would cooperate but needs “total access.”

Democratic members of Congress said Trump administration officials had misled them during briefings by insisting they were not planning regime change.

The legality of Maduro’s capture will be under spotlight at the United Nations Monday, but Washington is unlikely to face strong criticism from allies.

(Reuters, Bloomberg)

International Reaction

China’s foreign ministry called for the immediate release of Maduro.

China’s top financial regulator asked policy banks and major lenders to report their lending exposure to Venezuela.

(Reuters, Bloomberg)

Investment Opportunity?

Hedge fund Tribeca is sending a team to Venezuela, calling it one of the biggest-ever investment opportunities and a “gold rush.”

The fund is willing to invest up to 10% of its capital if Trump’s program is successful.

(Bloomberg)

MACRO

Trump’s Focus on Venezuela vs. Economy

Trump’s move against Venezuela comes as high prices and economic unease continue to shape the midterm landscape.

Economists project nearly 60,000 jobs were added in December, far below the 2 million jobs added in 2024.

Unemployment rate seen easing to 4.5%.

(Wall Street Journal, Bloomberg)

US Debt Concerns

A panel of economic luminaries said the long-run risk posed by mounting federal debt represented a paramount problem facing the US economy.

Risks include the scenario where debt size prompts the Fed to keep rates low to minimize servicing costs rather than contain inflation - known as fiscal dominance.

Philadelphia Fed President Paulson said modest additional rate cuts could be appropriate later in 2026 if the economic outlook remains benign.

(Bloomberg)

Japan Markets Surge to Records

Japan’s Topix jumped more than 2% to an all-time high while the Nikkei surged about 3% on Monday.

Tokyo investors returned after holidays and caught up with the US tech rally, while a further weakening in the yen supported exporters.

Top Japan brokerage CEOs see more gains after shares hit records.

(Bloomberg)

BOJ’s Ueda Confirms More Rate Hikes Coming

BOJ Governor Ueda said the central bank will continue raising rates if economic and price developments move in line with forecasts.

“Wages and prices are highly likely to rise together moderately,” Ueda said, adding that adjusting monetary support will help the economy achieve sustained growth.

Japan’s manufacturing activity stalled in December, ending a five-month streak of deterioration, with the PMI revised up to 50.

Japanese retail investors are ignoring the domestic bull market and opting for US stocks instead, according to exchange data showing net outflows.

(Reuters, Bloomberg)

China Opens 2026 Strong

Chinese stocks kicked off 2026 on a strong note, with the Shanghai benchmark topping 4,000 for the first time in nearly three months.

China’s yuan extended gains, touching a near 32-month high against the dollar.

However, services activity expanded at its slowest pace in six months in December as foreign demand declined.

The US shock intervention in Venezuela will likely choke oil flows to China, although large volumes of sanctioned crude stored at sea will soften the short-term impact.

The Chinese economy is projected to grow around 5% in 2026, driven by emerging industries and innovative business models.

(Reuters, Bloomberg, Securities Daily)

OPEC+ and Oil Markets

OPEC+ agreed to keep oil output unchanged through March despite global market turmoil. Delegates said Venezuela was not discussed.

Morgan Stanley cut its oil price forecasts for the first three quarters, warning a growing supply glut will probably peak mid-year.

Bitcoin hit a three-week high as political uncertainty continues after the Venezuela intervention.

(Bloomberg)

UK Political Developments

PM Starmer said he will pursue greater access to the EU’s single market, setting up a political fight with Nigel Farage.

Starmer warned his Labour Party that removing him in 2026 would plunge Britain into “utter chaos” and open the door to a far-right government.

The number of people who die in Britain this year is set to exceed those born - a permanent shift that will increase UK dependency on migration.

(Bloomberg)

Other Global Developments

The number of first-time asylum seekers in Germany fell 51% in 2025.

Some 50,000 households in southwest Berlin were without power after a suspected arson attack.

Eastern Europe is mounting its strongest push yet to secure a seat among the ECB’s top brass.

The Czech central bank needs to maintain a tight monetary stance but is leaving all options open.

Turkish inflation slowed for the third month in a row.

Argentina’s Treasury sold dollars to limit the peso’s decline under new rules allowing larger swings.

Thailand plans to review its inflation basket as persistently low figures don’t reflect elevated living costs.

The Philippine government cut its economic growth target due to a wide-scale corruption scandal.

Malaysian PM Anwar pledged to introduce term-limit legislation.

(Bloomberg, Reuters)

GEOPOLITICAL

Trump Warns Drug-Producing Nations

President Trump warned other drug-producing nations in the Western Hemisphere that he wouldn’t long tolerate the flow of illegal substances to the US.

(Bloomberg)

Russia-Ukraine Developments

Trump expressed fresh frustration with Putin, saying “I’m not thrilled with Putin, he’s killing too many people.”

Ukraine President Zelenskiy said the US will join the EU for talks in Paris tomorrow on security guarantees.

Ukraine has targeted Moscow with drones every day of 2026 so far, marking an escalation from earlier sporadic attacks.

(Bloomberg, Reuters)

Iran’s Calculations Scrambled

The capture of Maduro will force Iranian officials to consider a broader range of risks as Trump threatens to intervene.

Iran’s Supreme Leader Khamenei said grievances behind deadly protests were justified but accused external forces of inciting unrest and vowed to crack down.

(Wall Street Journal, Bloomberg)

Greenland and Denmark

Denmark’s PM warned Trump to stop threatening to take control of Greenland, emphasizing its NATO protection.

Trump reiterated America needs the territory for national security.

(Bloomberg)

Taiwan and China

Chinese social media users suggest Maduro’s capture as a potential template for Beijing to handle Taiwan.

Senior officials in Taiwan see the US action as a deterrent against China attacking the island.

China is keen on expanding economic cooperation with Ireland, positioning stronger bilateral ties as a way to boost relations with the EU.

(Bloomberg, Reuters)

Korean Peninsula

North Korean leader Kim Jong Un oversaw the test firing of hypersonic missiles, citing the need to maintain a powerful nuclear deterrent.

South Korean President Lee Jae Myung began a state visit to China hoping to promote peace on the Korean Peninsula.

(Reuters)

Israel Recognizes Somaliland

Israel recognized Somaliland to secure Red Sea waterways and share intelligence, positioning itself in the Horn of Africa across from Houthi-held territory in Yemen.

(Wall Street Journal)

EQUITIES

Chip Sector Rallies

TSMC shares climbed by the most since April as AI optimism continues. Goldman Sachs raised its price target 35% to NT$2,330.

TSMC plans to rapidly build out 2nm capacity to 140,000 wafers per month by end-2026, up from 100,000 expected.

Samsung Electronics will increase HBM memory chip production 50% in 2026 due to strong demand and expected Nvidia orders.

Samsung plans to double the number of mobile devices with AI features powered by Google’s Gemini this year.

Nvidia and AMD will significantly raise graphics card prices due to rising memory costs and strong AI demand, with the RTX 5090 potentially reaching $5,000.

Broadcom and MediaTek have both increased their chip wafer-starts for 2026.

Taiwan prosecutors filed additional indictments against three individuals and Tokyo Electron for allegedly misappropriating TSMC’s core technology trade secrets.

Trump blocked HieFo Corp. from acquiring semiconductor-related assets from Emcore, citing national security.

(Bloomberg, Reuters, CN Yes, Korea JoongAng, Liberty Times)

Chinese Tech and AI

Xiaomi is raising its delivery target to 550,000 units in 2026 from 440,000 in 2025.

Alibaba is launching a service to help restaurants use AI, competing with Meituan in food and dining.

Chinese AI startup MiniMax Group is expected to settle its Hong Kong IPO at the top of its pricing range after books were oversubscribed multiple times.

(Bloomberg, Reuters)

China Oil Stocks Slump

Stocks of Chinese oil firms slumped after the US captured Venezuela’s president Maduro.

(Reuters)

Auto Sector

Honda will extend its production suspension in China by two weeks and aims to resume at three joint-venture factories on January 19.

(Nikkei)

Elon Musk and Trump

Elon Musk said he had a “lovely” dinner with Trump and Melania. The president told reporters the Tesla CEO is well-meaning but makes mistakes.

(Bloomberg)

Healthcare

Sanofi said the FDA accepted a priority review to potentially expand the age range for its Tzield type-1 diabetes drug to include children as young as one year old.

(Wall Street Journal)

Other Notable Moves

SBI Funds Management has hired nine banks to advise on a proposed IPO that may raise around $1.4 billion in the first half of 2026.

(Bloomberg)

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