DBG Markets: Market Report for Jan 5, 2026

A Geopolitical Storm Meets the 2026 "Fed Reset"

The first full trading week of 2026 has begun with a dramatic shift in the global macro landscape. A historic weekend military operation in South America and escalating tensions in the Middle East are colliding with a Federal Reserve undergoing a pivotal leadership transition. These dynamics are dominating market sentiment in the opening week of the year.

The Feds "Changing of the Guard" & Dollar Impact

The Federal Open Market Committee (FOMC) has officially entered its 2026 voting cycle, introducing a fresh slate of regional bank presidents to the rate-setting table. This annual “reshuffle” is a critical event for traders, as it alters the hawk-dove balance of the committee.

As of the January 27–28, 2026 meeting, four new regional presidents gained voting rights, replacing the outgoing 2025 class:

· Anna Paulson (Philadelphia): Dovish-leaning, emphasizing concern over a softening labor market (currently 4.6% unemployment) amid persistent inflation.

· Beth Hammack (Cleveland): Hawkish, advocating that policy remain restrictive until inflation is decisively under control.

· Lorie Logan (Dallas): Known Hawk, warning that premature rate cuts risk moving policy into overly accommodative territory while services inflation remains sticky.

· Neel Kashkari (Minneapolis): Centrist/Dovish lean, historically a hawk but now supporting cautious cuts to buffer a cooling labor market.

This reshuffle has created a more polarized committee just as the Fed approaches its estimated “neutral rate” of 3.50%–3.75%. Hawks like Logan and Hammack provide structural support for the US Dollar, helping stabilize it near 98.00–98.20 by reducing perceived risk of politically-driven rate changes in 2026.

USD Index, H4 Chart

NFP data this week may be decisive for the Dollar, though the near-term upside remains intact.

The Geopolitical "Triple Threat": Venezuela & Yemen

Geopolitical developments are dominating early 2026 volatility, impacting both energy and safe-haven assets:

· Venezuela Operation: On January 3, 2026, U.S. Delta Force units captured Nicolás Maduro in Caracas. Maduro is now held in New York facing federal charges. President Trump announced that the U.S. would temporarily oversee the transition to restore oil production.

· Yemen Civil Conflict: UAE-backed STC forces recently seized the oil-rich Hadramawt province, but Saudi-backed government forces reportedly retook the provincial capital, Mukalla, following intensive airstrikes as of January 5.

Along with ongoing Eastern European uncertainty, these events have created elevated volatility in oil and gold markets.

Gold: Risk Premium Set In？

Gold surged higher at Mondays open, reflecting a geopolitical risk premium. It remains the ultimate hedge against instability.

XAU/USD, H2 Chart

Technically, gold found support around 4,300. Key levels to watch are 4,375–4,400: a clean break above this zone could trigger further upside, especially given ongoing geopolitical tension. On the downside, Dollar strength may cap gains. A move above 4,400 could open the path to 4,450, though this remains a major resistance zone.

Outlook: Bullish consolidation. Watch the 4,400–4,450 range. Failure to reclaim 4,400 could see gold consolidate between 4,300–4,375.

Oil: Caught Between Geopolitics and Oversupply

Oil prices remain trapped between bullish shocks from Venezuela/Yemen and the bearish reality of global oversupply. With major support holding, geopolitical risk currently dominates near-term support.

USOIL, Daily

Support remains near 56.30–57.30.

Outlook: Oil is likely to hold above this major support, with the geopolitical risk premium supporting a rebound.

Brief Outlook: Equities & Cryptocurrency

· Equities: S&P 500 and Nasdaq show signs of “geopolitical fatigue.” While the Venezuela development is viewed as pro-business, military uncertainty and a hawkish Fed are limiting upside. Expect a range-bound start to the week (S&P 500 near 6,900) until Fridays NFP clarifies the path.

· Cryptocurrency: Bitcoin (BTC) continues to behave like “digital gold,” holding near $90,000. The growing USD1 stablecoin and its integration with Binance provide a strong liquidity buffer against broader market shocks.

BTCUSD, H4 Chart

A sustained move above 90,000 could set the stage for a bullish reversal. Absent further macro catalysts, traders may remain sidelined. A hold above 90,000 could keep BTC hovering in the 90,000–94,000 range.

The Weeks Decisive Data: Non-Farm Payrolls (NFP)

While geopolitical headlines currently dominate market sentiment, Fridays Non-Farm Payrolls (Jan 9) remains the week's ultimate "make-or-break" event. This release will be the primary driver for the U.S. Dollar, U.S. equities, and the cryptocurrency market as investors look for direction in the 2026 opening.