2026 will not be defined by a single shock or turning point. Instead it will be by the cumulative impact of policy uncertainty, geopolitical friction and capital repositioning. The old anchors are weakening and markets will be forced to discriminate more aggressively. These are the five calls that will matter most.
1) America First moves from posture to operating system
In 2026 “America First” stops being a slogan and becomes a governing framework. US foreign policy will grow more stark, more openly transactional – on trade, security guarantees, sanctions and alliance management. This is not just Trump-style theatre. It is a deeper shift in how US power is exercised and, critically, how reliable it appears to partners. The result is more leverage for Washington in the short term, but greater strategic uncertainty everywhere else.
2) The US-China trade war enters a more dangerous phase
2025’s US-China trade spat was merely round one. China played a deft hand, absorbing damage and developing new soft and hard power weaponry in its arsenal. Supply chains adjusted, markets normalised and Beijing avoided systemic damage. That unresolved outcome is precisely why round two matters more. Expect tariffs, tech controls and retaliation to re-emerge as political tools, not economic ones. Markets will struggle with this because it produces repeated episodic shocks rather than a clean break – volatility by design, not accident.
3) Miscalculation risk rises across multiple theatres
This is the real fault line of 2026. With red lines constantly shifting, actions becoming more brazen by the day, and signalling growing noisier, the risk is no longer confined to US-China dynamics. Taiwan, the South China Sea, Iran-Israel, the Red Sea, Ukraine and even the Korean peninsula all sit inside a system suffering from deterrence fatigue. The danger is not intent, but error. One misread move is enough to re-price risk globally.
4) Europe remains fragmented, not just indecisive
Europe’s problem is no longer hesitation – it is internal divergence. Different threat perceptions, domestic political pressures and fiscal constraints are pulling policy in opposing directions. On Ukraine, diplomacy has improved and Zelenskyy has undeniably shifted the conversation. But progress should be measured in process, not outcomes. Negotiations may advance in 2026 without delivering resolution. Markets should not price peace too early.
5) Capital looks beyond the US, but only selectively
US policy volatility will keep capital restless and increasingly willing to look elsewhere. As they did spectacularly in 2025, Emerging and Frontier Markets will benefit in 2026 – but not uniformly. The winners will be high-carry, reform-credible and geopolitically insulated/ agile markets. The losers will be fragile, politically noisy or externally dependent. This is not a blanket EM/FM rally. It is a sorting mechanism. Get the country calls right and 2026 offers real upside.
Bottom line: The Great Sorting
2026 is the year the post-war order finally and clearly gives way, in practice if not in name, to a bilateral transactional world. Multilateral assumptions fade, and country-by-country relationships start to matter more than blocs or institutions. Profitability will depend on identifying which states have the fiscal discipline to function in a higher-rate world and the diplomatic agility to operate inside a US-China rivalry that is now volatility-by-design. This is no longer about global beta. It is about getting the country calls right.
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