| Global Stocks | US Stocks | UK Stocks | EU Stocks | EM Stocks | Japan Stocks | Gilts | GBP/USD |
2.1% | 2.0% | 1.8% | +1.9% | +2.2% | 2.9% | 1.2% | -0.4% |
Market update
Global stock markets rose by +2.1% in the first week of 2026, with most major regions posting strong performance. Equity markets appeared mostly unperturbed by geopolitical events that occurred in Venezuela over the previous weekend and focused instead on macroeconomic data. US stocks rose by +2% in GBP terms as consumer sentiment data showed improvement, while the jobs report showed a modest downside surprise in jobs added and a small decrease in the unemployment rate. European stocks rose by +1.9% on cooling inflation, while UK stocks rose by +1.8% on rate cut expectations. Emerging market stocks added +2.2%, with South Korea being the leading contributor to the returns of the index. Japanese stocks rose by 2.9% as the currency depreciated versus the USD and GBP.
UK 10-year gilt yields fell by -17 basis points last week, in their largest decline since April, as traders increased bets on interest rate cuts by the Bank of England. US 10-year yields fell by -2 basis points, while German bund yields dropped by 8 basis points.
Gold and oil both rose on a flare-up of geopolitical tensions in Venezuela. Gold rose by 4.6% in GBP terms, while oil rose by 3.5% in GBP terms.
Economic update
Eurozone inflation cooled to 2.0% in December, down from 2.1% in November. Services remain firm (3.4%), while energy costs fell sharply (-1.9%). This supports the ECB’s decision to keep rates steady, and the euro held around the 1.17 level following the release.
PMIs continue to signal modest expansion: the PMI, which measures business activity, remained in expansive territory in the US, the UK and Europe. In December, the US composite index stood at 52.7 and the manufacturing index held steady at 51.8. In the UK, the manufacturing PMI increased to 50.6, the highest figure in 15 months. In the eurozone, the composite index fell to 51.5. Note: a figure above 50 indicates sequential economic growth.
UK house prices declined by 0.4% month-on-month in December but increased by 0.6% year-on-year in 2025. They remain 1% below the peak in August 2022.
