Author: IntaCapital Swiss

Update for Crude Oil Prices

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Current Market Performance vs. Predictions

In December 2025, many experts, commentators and analysts predicted that there would be an oversupply of crude oil in 2026, resulting in an oil glut caused by an increasing supply and weaker demand. Analysts suggested that the price of Brent Crude will average $58 bbl. At the time of writing, Brent crude futures traded up to $70 per bbl. for the first time since September 2025. Geopolitical tensions have helped bolster prices, with the global oil benchmark* rising by around 2.75%, while its US counterpart, West Texas Intermediate, climbed to just over $65 per barrel.

*Key Global Oil Benchmarks – The primary benchmarks are Brent Crude (North Sea), which covers 80% of global traded volume and West Texas Intermediate (WTI) (US), which is a key benchmark for the Americas. Dubai Crude is also used as a benchmark for Middle Eastern oil sent to Asia.

Impact of Geopolitical Escalations

The recent rise in crude oil prices has mostly been attributed to President Donald Trump, who threatened Iran with military action unless they agree to a nuclear arms agreement. Experts suggest that the threat issued via President Trump’s social media (Truth Social) yesterday evening, where he said that US ships had been ordered to the region and were ready to ”fulfil their mission with speed and violence, if necessary”, is responsible for the escalation in geopolitical premium of oil priced by potentially $3.00 – $4.00 per bbl.

Supply Disruptions and Global Conflict

Beyond the impact of geopolitical tensions on crude oil prices, the recent rise has also been driven by major supply disruptions in Kazakhstan. Prices were further supported last Friday after President Putin dampened hopes of a long-term settlement in the war with Ukraine. Experts advise that, despite the oversupply and lower prices that were predicted for this year, oil prices are expected to remain elevated for the time being as the markets wait for the next move by the White House and Iran. Analysts have reported that Tehran have stepped up negotiations with its OPEC+* counterparts and key Middle Eastern countries in an effort to stave off American aggression.

*OPEC+ – is short for the Organisation of the Petroleum Exporting Nations and is a coalition of 23 oil-producing countries, of which the full members are Algeria, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of the Congo, Saudi Arabia, United Arab Emirates and Venezuela. There are a further 10 non-OPEC Partner Countries that form the OPEC+ and make up the DoC (Declaration of Cooperation), consisting of Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan. The whole group’s modus operandi is to cooperate to influence the global oil market and stabilise prices.

Short-Term Outlook and Future Risks 

Experts advise that in the short-term (the next 4 to 6 weeks), based on technicals, the price of Brent Crude is estimated to trade within a range of $60 – 70 per bbl, with any movement being driven by geopolitical or inventory headlines. Despite a mid-range of analysts’ assessments of 2 – 3 million bbl per day, it is expected that today’s prices of crude oil will remain at the current level. Today, however, Iran has threatened to close the Straits of Hormuz, and analysts advise that this will definitely spike the price of oil and will no doubt, according to political and military experts, lead to military intervention from the United States.

The Federal Reserve Holds Interest Rates Steady

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FOMC Holds Interest Rates Steady

Today, and for the first time since July 2025, the Federal Reserve’s FOMC (Federal Open Market Committee) kept interest rates steady between 3.50% and 3.75%. The FOMC voted 10 – 2 in favour of holding rates steady, with the two dissents coming from Governor Waller (a President Trump nominee to replace Fed Chair Powell) and Governor Miran*, both voting for a cut in interest rates of 25 basis points. Post-meeting statements by officials said, “job gains have remained low, and the unemployment rate has shown some signs of stabilisation”. Interestingly, the language that officials used in three previous statements suggested that there were increased downside risks to employment, has disappeared this time around.

Background on Governor Miran

*Federal Reserve Governor Marin – In December 2024, President Donald Trump named Miran as his nominee for chair of the Council of Economic Advisors. He was confirmed by the United States Senate in March 2025. Governor Marin developed the Trump administration’s Tariff Policy, opining that import taxes are not inflationary.

Powell Signals Improving Economic Outlook

After the interest rate announcement, Federal Reserve Chairman Jerome Powell said, “The outlook for economic activity has improved, clearly improved since the last meeting, and that should matter for labour demand and for employment over time”. Recently released data backed up this statement, showing steady employment, accelerating growth, and cooling inflation”. On the growth front, official data released last week for GDP showed an annualised growth of 4.4% for Q3 2025, with some experts suggesting it could reach 5.4% in Q4. 

Political Pressure and Inflation Concerns

Chairman Powell has also noted, “The economy has once again surprised us with its strength, not for the first time.” However, once again, President Trump has hurled insults at Chairman Powell, calling him a moron for not lowering interest rates. The President’s frustration is likely to grow, as experts say Chairman Powell’s comments clearly suggest the FOMC plans to keep interest rates on hold in the coming months. Indeed, the Federal Reserve’s Personal Consumption Expenditures Inflation Gauge, (their preferred inflation gauge),  reflected 2.8% in November 2025 which is nearly a full percentage point above their 2% target, so as some analysts have suggested, this may be another reason to keep rates on hold as the Federal reserve attempt to balance their dual mandate of full employment and price stability.

Market Reaction and What Comes Next

Analysts advise that the reaction by financial markets to the Federal Reserve’s interest rate decision was relatively muted, with traders pricing in two more rate cuts this year, the first cut being expected in June. Indeed, analysts suggest that the statement by officials following the rate decision was on the hawkish side, especially as downside risk to employment was removed from the language and economic activity was reclassified from moderate to solid. This suggests that Chairman Powell may well have presided over his last interest rate cut as he is due to retire on 15th May this year. Global markets are watching with cautious anticipation as President Trump prepares to appoint a rate-cut advocate as the next Chairman of the Federal Reserve. The two dissenters in today’s announcement are Trump appointees, and both Fed Governors are in the frame for selection.

Forecast Update for Gold, Silver, Platinum and Palladium

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Analysts advise that in 2026, precious metals will hit new highs on the back of a strong 2025, but at the same time expect them to face several growing challenges as perceived risks collide with momentum, creating the setting for potential volatility.  Experts within the precious metals arena see gold, silver, platinum and palladium enjoying another breakout year, with some analysts advising the current consensus suggests gold could go as high as $6,500 – $7,000, whilst silver could hit the $160-mark, platinum could be seen at $3,000, with palladium not far behind.

Gold

Gold enjoyed a record-breaking bull run in 2025, with some analysts now expecting the yellow metal to average 38% above 2025 levels. These expectations are driven by continued Federal Reserve rate cuts and ongoing central bank purchases, as countries — particularly BRICS* nations — seek to diversify away from the US dollar. Further expectations suggest that gold’s safe haven status will be considerably enhanced as it is expected that the geopolitical tensions will continue into 2026, whilst global economic uncertainty will also be a driver of gold.

Bearish sentiment suggests that there are cracks in the bulls’ outlook, as currently the market is experiencing a retreat in jewellery demand*, plus central banks appear to be somewhat price sensitive. Price range across the board for 2026 differs from analyst to analyst, with average gains predicted at $4,741.97 across the year and a trading range from $3,450 – $7,150. However, as of today, gold broke another record, going through the $5,000 barrier for the first time, hitting $5,094oz, giving a pat on the back to the bulls.

*BRICS – An intergovernmental agency and an acronym for Brazil, Russia, India, China (all joined in 2009), followed by South Africa in 2010 as the original participants. Today, membership has grown to include Iran, Egypt, Ethiopia, and the United Arab Emirates and Saudi Arabia, with Thailand and Malaysia on the cusp of joining. Russia sees BRICS as continuing its fight against Western sanctions, and China (through BRICS) is increasing its influence throughout Africa and wants to be the voice of the “Global South”. Several commentators feel that as the years progress, BRICS will become an economic and geopolitical powerhouse and will represent a direct threat to the G7 group of nations. Currently, this group represents 44% of the world’s crude oil production, and the combined economies are worth in excess of $28.5 trillion, equivalent to 28% of the global economy.

**Jewellery Purchases – In China, the high price of gold has seen a decline in the volume of physical jewellery purchases, with January imports via Hong Kong down 40% month-on-month. A similar situation is being faced in India, where analysts are projecting a 20% contraction in gold jewellery volume again due to high prices and weak consumer demand, which is moving away from traditional heavy jewellery to lighter and more affordable designs. India and China are the world’s largest consumers of gold jewellery, together accounting for over 55% of global demand.

Silver

The metal enjoyed an outstanding 2025 with prices increasing in excess of 100%, entering 2026 with the previous year’s industrial momentum on its back. Many analysts predicted that silver would reach $100+ per ounce in 2026, and this milestone was achieved on Friday, 23rd January, when prices rose 6.9% to $102.87 — pushing year-to-date gains to over 40%.

Like gold, silver is also viewed as a haven, and the rise in silver was fuelled by failure to reach an agreement for a deal to end the Russian/Ukraine war, plus the breakdown in European USA relations. Experts also suggested that the White House’s continued attack on the independence of the Federal Reserve has also helped to push the price of silver on an upward trajectory.

Some analysts forecast silver could climb as high as $165 per ounce, with bullish market sentiment driven by structural supply deficits, rising industrial demand from solar panels and EVs, strong retail buying, particularly in China, and increased investment inflows. Safe haven appetites will continue to increase, especially as upward momentum is also fanned by what is known as “the debasement trade”*. Recently, silver hit another high of $113.22oz, another record and another pat on the back for the bulls.

*The Debasement Trade – A financial strategy where investors divest themselves of fiat currencies and sovereign bonds, and invest in hard assets such as precious metals, e.g., gold and silver. Key takeaways are rising sovereign or government debt, geopolitical instability, and inflation. Experts advise that investors have been selling major currencies and running to alternative assets such as gold (both physical and ETF), silver, Bitcoin, and even some collectables such as Pokémon cards, which recently reached an all-time high.

Debasement trading, say many commentators, will continue on an upper curve in 2026 with Europe having to deal with France and other issues. Japan has unsettled markets with the appointment of a new pro-stimulus, tax-cutting Prime Minister, raising concerns about further debt increases. In the UK, the Chancellor is preparing a budget many commentators see as potentially explosive. Meanwhile, the United States is grappling with an already unsustainable debt burden, as the President intervenes in Venezuela, clashes with both allies and adversaries, and attempts to exert influence over the Federal Reserve.

Platinum

The bull analysts are back in town for PGMs*, and suggestions are that platinum will reach $2,450/oz in 2026 due to acute market tightness. However, as at 14.20 GMT on the 23rd of January, platinum was sitting at $2,820, reflecting how investors are fleeing to safe-haven hard assets. Market deficits have helped underwrite the increase in the price of platinum, with market deficits predicted to be between 329,000oz and 460,000oz. Industrial demand is a key driver of price, especially in the areas of auto catalysts,  with the slower EVs (electric vehicles) and the rising demand for hydrogen-related technologies (PEM – Proton Electric Membrane fuel cells and electrolysers). The automotive industry accounts for circa 30 – 45% of global annual demand.

*PGMs – In the metal markets, most commonly known as Platinum Group Metals, are a group of six noble precious metallic elements, being Platinum, Palladium, Rhodium, Ruthenium, Iridium, and Osmium. Typically, they are highly resistant to wear and tear and tarnish, making platinum particularly suited for up-market jewellery. PGMs are used across many industries plus can be found in anti-cancer drugs, electronics, dentistry and vehicle exhaust catalysts (VECs).

Palladium 

The sentiment for palladium from many analysts appears to be on the bullish side, with many seeing the metal breaking higher this year, which reflects a physically tight market plus continued demand for hybrid vehicle catalysts. On the bear side, prices differed substantially, with the average forecast of $1,400oz with a trading range of $1,100oz – $2,100oz. On the bull side, the average forecast is $2.300oz with a trading range of $1,100 – $2,900oz. However, as of 15.44 GMT on January 23rd, the bid-ask spread was $2,112/2,152 per ounce, showing that, like other metals, the price has been on an upward path compared to some predictions, although palladium did hit a high of $2,155oz.

The late surge this month of gold, silver and PGMs has been driven by structural deficits and expectations of the US. The Federal Reserve is dropping interest rates due to intense geopolitical tensions. Safe-Haven demand has increased mainly due to U.S. military posturing near Iran, and President Trump’s threatened military attack on Greenland (on which he peddled back), culminating in a breakdown in relations with America’s European allies, plus threatening further tariffs on his allies but not his enemies.

There has been a shift away from US assets as investors rotate capital away from bonds and equities and the U.S. dollar, which fell to its lowest against the Euro since September 2021 at EUR/USD 1.19 and a four-month low against sterling at $1.37. Analysts have also advised that further central bank buying of gold this week has also acted as a price driver for the yellow metal, and even though recent rallies are unprecedented, the gold and silver markets are liable for a series of sharp corrections to the downside, excluding any profit taking, which will also soften prices.

Why International Capital is Sitting Out the UK — And Why a Post-Labour Britain Will See Billions in Deployment

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For decades, the United Kingdom has been positioned as one of the most reliable and sought-after destinations for foreign investment. Open markets, stable legal frameworks, predictable tax treatment, property rights, deep financial services markets, and liberalised capital flow policies made Britain a global magnet for institutional money. The UK attracted sovereign wealth, private equity, pension capital, infrastructure funds, venture growth investment, and strategic acquisitions across sectors ranging from real estate and energy to fintech and advanced manufacturing.

However, since the election of the current Labour government, the behaviour of international capital has become unambiguous: investors have paused deployment, elevated their risk premiums, and postponed commitment to long-duration UK exposure. This is not anecdotal — it is observable in real estate transaction collapse, delayed capex, higher yields demanded for UK risk, muted M&A flows, stalled strategic investment, and private capital reallocating into other OECD markets.

To understand why billions of dollars remain sidelined — and why investors openly anticipate a deployment surge once Labour exits power — we must examine how international capital allocates: not through ideology, theatre, or messaging, but through the sober mathematics of regulatory forecasting, taxation, policy predictability, and expected return.

Investment Hates Uncertainty — And Labour Has Created It

Foreign investment is not sentimental. It does not deploy into jurisdictions because they are fashionable or because newspapers say it is the “right thing to do.” It deploys where outcomes are predictable, rules are durable, and returns can be modelled over 10-20-year horizons.

The Labour government’s economic approach has triggered the opposite conditions:

• Tax uncertainty

• Regulatory ambiguity

• Industrial hostility toward private capital

• Disincentives for wealth creation

• Unpredictable energy and planning policy

• Mixed messaging on business investment

This is not ideological critique; it is how investors interpret signals.

When a government signals that capital gains, property, corporate distribution, inheritance, wealth, or windfall taxes are “in scope,” investors do not wait to see the details. They wait to deploy capital until the threat is removed. Labour has spent its tenure signalling precisely these threats.

The UK Economy Needs Investment — But Treats Investors as a Problem

The contradiction at the heart of current policy is straightforward: Britain needs investment across infrastructure, housing, energy, innovation, and industry — yet the government treats investors as if they are rent-seeking exploiters who must be constrained or punished.

International capital observes this contradiction and acts rationally: it waits.

Countries competing with the UK — particularly Canada, US Sunbelt states, Ireland, UAE, Singapore, Netherlands, Australia, and parts of Central Europe — have moved aggressively in the opposite direction. They are making capital welcome. They are bidding for it. They are cutting friction, stabilising rules, and streamlining approvals.

Capital goes where capital is valued.

Policy Hostility Toward Wealth & Property Freezes Deployment

One of the most damaging signals to foreign investors has been Labour’s overt hostility toward high-value property ownership, private wealth, and non-domiciled capital.

The UK property market historically represented not only a store of value, but an entry point for global capital to participate in UK economic activity. It pulled in private investment, development finance, family offices, sovereign wealth, and institutional funds.

Since Labour’s ascent, the reaction has been swift:

• Deal volumes in prime London property have dropped sharply

• Developers have delayed or cancelled projects

• Overseas buyers have paused offers

• Family offices have rerouted allocations to Dubai, Portugal, Singapore, and the US

• Private lenders have increased risk premiums on UK exposure

• Equity partners have delayed capital calls for UK projects

The equation is simple: if a government telegraphs that property and wealth are targets not assets, capital sits out.

Corporate Investment Requires Regulatory Predictability

Corporations — particularly multinationals — deploy based on predictable multi-year regulatory frameworks. Labour’s approach to energy, infrastructure planning, environmental compliance, and corporate taxation has been erratic and politically reactive.

Industries particularly affected include:

• North Sea energy

• Renewable deployment

• Logistics and ports

• Data centres

• Heavy industry

• Manufacturing

• Financial services

• Advanced technology clusters

Private capital is not allergic to regulation; it simply demands clarity. Under Labour, regulation has become unpredictable, politicised, and declarative rather than technocratic. Investors cannot model returns under those constraints — so they defer until the political cycle resets.

The Risk Premium on UK Exposure Has Quietly Risen

Investors price political and regulatory uncertainty into their required return. Under Labour, the UK’s perceived risk premium has risen, even without formal rating downgrades. This manifests as:

• Higher yields demanded for UK real asset projects

• Larger carry limits in private debt

• Lower valuations in strategic acquisition targets

• Delayed M&A strategies

• Reallocation to other OECD markets

• Reduced foreign participation in new issuance

• Decline of inward portfolio investment flows

This is exactly what stagnation looks like: capital not fleeing, but waiting.

Capital Is Mobile — And It Is Currently Parking

The fundamental miscalculation of the Labour government is the assumption that capital has nowhere else to go. In the 1980s that might have been true; in the 2020s it is profoundly wrong. Capital today has abundant substitutes:

• Singapore for HQs and wealth

• UAE for property and tax-neutral investment

• Ireland for corporate domiciliation

• US Sunbelt for industrial investment

• Portugal & Italy for relocation capital

• Luxembourg & Switzerland for financial services

The UK used to be the default Western hub for capital. Under Labour, it is now one of many competing jurisdictions — and capital will always choose the path with the lowest friction and highest predictability.

Billions Are Sitting On the Sidelines — Waiting for Political Clearance

Here is the most important point: capital has not forgotten the UK. It has paused.

Institutional allocators, family offices, sovereign funds, infrastructure groups, pension consortia, and strategic investors are already briefing their boards that UK deployment is a “post-Labour cycle” strategy.

When Labour leaves the government, the dam breaks. Investors are waiting for:

1. Tax clarity

2. Property stability

3. Corporate and wealth policy normalisation

4. Regulatory predictability

5. A pro-investment mandate

6. A government that views capital as an enabler rather than an enemy

Once those conditions are restored, deployment will be rapid and large. The capital is already assigned. The deal teams are already modelling. Fund investment committees are already discussing the UK as a re-entry market pending political clearance.

When the political friction disappears, the UK becomes once again one of the most attractive Western jurisdictions for:

• Infrastructure capital

• Real estate capital

• Private equity

• Sovereign wealth

• Energy & resources

• Technology clusters

• Financial services consolidation

• Family office relocation

The UK’s structural advantages — legal infrastructure, language, time zone, financial markets, property rights, talent pool, and global connectivity — have not gone away. They are simply being smothered by a government that misunderstands how investment behaves.

Labour Has Frozen Capital — But It Has Not Eliminated It

International investment into the UK will remain stagnant so long as the current Labour government continues to create uncertainty, punish wealth, broadcast hostility to private capital, and politicise regulation. The UK is not unattractive — it is merely uninvestable in the current policy climate.

Billions of dollars are not fleeing the UK; they are waiting for permission to return.

When Labour falls, expect a capital surge reminiscent of:

• 1980s financial liberalisation

• Post-ERM capital expansion

• Post-Brexit currency arbitrage inflows

• 1990s private equity boom

Investors are patient. They are disciplined. They are watching.

The UK is not finished — it is paused.

The UK Economy from the Swiss Perspective: Why International Capital Is Paused on the UK — and Why It Will Redeploy When Labour Is Gone

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Switzerland views global capital flows with a uniquely unemotional lens. For decades the country has acted as a neutral observer, allocator, and recipient of worldwide financial activity, analysing long-range trends rather than reacting to political cycles. From Zurich and Geneva’s vantage point, the United Kingdom has always been one of Europe’s most attractive deployment markets for private capital, strategic acquisitions, and real asset investment. It offered common-law protections, mature financial services, deep liquidity, and globally recognised property rights.

However, since the arrival of the current Labour government in London, Swiss institutions have observed a marked shift in investor behaviour: capital deployment has slowed, strategic activity has paused, and underwriting committees have reclassified the UK from “stable deployment market” to “wait-and-see market.” This is not due to currency volatility or geopolitical shocks, but to the political and regulatory posture of the government itself.

Switzerland is not ideological. It simply follows capital — and today capital has pressed the pause button on the UK.

Investment Pauses When Predictability Is Lost

Swiss institutions are highly sensitive to long-term regulatory clarity. Pension funds, insurers, family offices, and private banks evaluate jurisdictions by their ability to remain predictable across decades, not parliamentary cycles. The Labour government’s approach to corporate taxation, property ownership, wealth treatment, and environmental regulation has introduced uncertainty that makes long-term modelling complex.

Uncertainty has a price. When risk cannot be quantified, Swiss allocators do the only rational thing: they delay.

Under Labour, London no longer offers the assumption of regulatory stability that Zurich or Geneva require for 10–20-year capital commitments. Switzerland observes the following UK signals with caution:

• Possible wealth taxation

• Possible windfall taxation

• Property and non-dom regime hostility

• Unclear energy and infrastructure policy

• Anti-private capital rhetoric

• Increasing regulatory politicisation

Swiss investors do not exit markets over political language alone — but they will not deploy at scale until the policy environment stabilises.

Switzerland’s View: Capital Is Not Ideological — It Is Selective

One of the most consistent errors made in London political circles is the belief that capital has no alternative. From the Swiss perspective, this assumption is outdated. Capital has become globally mobile and aggressively competitive jurisdictions are actively courting it.

Today capital can flow to:

• Switzerland for financial stability and wealth management

• Ireland for corporate domiciliation

• UAE for tax neutrality and property development

• Singapore for strategic Asia allocation

• Netherlands for holding company efficiency

• Luxembourg for fund structuring

• US Sunbelt for manufacturing and industrial expansion

The UK used to be the European default for large allocations. Under Labour, it has become “one of many options,” which dramatically changes its bargaining position.

From Switzerland, the question is not “Why avoid the UK?” but “Why choose the UK over jurisdictions that are actively welcoming capital?”

Currently, Switzerland sees few UK policies that answer that question convincingly.

Real Estate and Property: An Asset Class Paused

Swiss family offices and wealth managers have historically been active in UK residential and commercial property. Prime London property served both as a store of wealth and as a collateral base for broader investment strategies. Since Labour’s ascent, Switzerland has observed a sharp reduction in the willingness of international capital to engage in UK property.

The reasons are structural:

• Tax risk to non-doms and foreign owners

• Politicisation of property ownership

• Planning policy ambiguity

• Anti-private landlord rhetoric

• Falling rental yield incentives

• Currency hedging complications

Meanwhile, Switzerland observes Dubai, Lisbon, Milan, and Zurich taking the opposite approach — inviting high-net-worth relocation, encouraging property investment, and stabilising tax treatment.

Unsurprisingly, Swiss family offices have increased allocations to these markets while slowing UK exposure.

Corporate & Strategic Capital Require Technocratic Stability

Swiss institutions also observe that Labour’s regulatory approach has become politically expressive rather than technocratic. Industries including energy, heavy infrastructure, logistics, and manufacturing rely on 10–25 year planning horizons. When regulatory frameworks are altered by ideology or narrative instead of long-term industrial strategy, investors step back.

Swiss allocators distinguish between:

• Policy that expresses values, and

• Policy that produces deployment conditions

The Labour government frequently delivers the former at the expense of the latter.

Switzerland notes this contrast not out of judgement but because it creates a comparative advantage. Swiss authorities communicate regulatory changes years in advance, consult industry, protect capital formation, and maintain cross-party consensus on taxation. This consistency attracts capital that London currently deters.

The Swiss Risk-Pricing Lens: The UK Just Became More Expensive

Switzerland’s financial institutions reprice jurisdictions continuously. Under Labour, the UK has acquired a higher implied risk premium, reflected in:

• Higher expected returns demanded

• More conservative underwriting assumptions

• Delayed private equity entry

• Reduced infrastructure appetite

• Stalled cross-border M&A

• Lower real estate development funding

• Reduced mezzanine and private debt issuance

• Minimal sovereign wealth participation

Crucially, Switzerland does not interpret this as permanent. It sees it as cyclical and political.

The financial conclusion is clear:

The UK is not a bad market; it is a temporarily unattractive one.

This is an important distinction.

The Swiss Expectation: A Post-Labour Surge in Deployment

Unlike media narratives which operate in weekly cycles, Swiss allocators model political cycles. The view held by many institutions in Zurich, Geneva, and Lugano is straightforward:

• Deployment now is unattractive

• Deployment later is compelling

• Timing depends on political transition

Swiss investment committees are already building post-Labour UK scenarios. Allocation plans are being drawn. Funds are preparing mandate revisions. Real estate operators are warming capital pools. Strategic acquirers are mapping distressed opportunities. Sovereign and pension funds are modelling entry timing.

There is no hostility to Britain — merely discipline.

When Labour falls, Switzerland expects:

• swift property reactivation,

• private equity re-entry,

• infrastructure capital injection,

• renewed sovereign wealth participation, and

• strategic corporate acquisition.

Billions in capital are not avoiding the UK; they are reserving for it.

What Switzerland Gets In The Meantime

The pause in UK deployment has produced an unintended benefit for Switzerland: capital is being temporarily housed in Swiss custodial, advisory, fund, and wealth platforms. Banks in Zurich and Geneva report higher liquidity retention and reduced deployment outflow toward London, which strengthens Swiss asset management and AUM bases.

Put differently:

If capital cannot deploy to London, it parks in Zurich.

This is not ideological. It is simply financial logistics.

Switzerland Sees a Paused UK — Not a Declining UK

From a Swiss vantage point:

• Capital has paused on the UK

• The pause is political, not structural

• The catalyst for re-entry is the exit of the Labour government

• Switzerland benefits interim through custodial inflow

• The UK will become deployable again once policy normalises

The UK still possesses extraordinary competitive advantages: common law, language, talent, markets, property rights, and global connectivity. These fundamentals have not eroded; they have merely been fenced in by a government that misunderstands how investment behaves.

When Labour is gone, Switzerland expects capital to flow back into Britain rapidly and at scale. The money is waiting. The committees are waiting. The strategies are waiting. The cycle is waiting.

The UK is not finished; it is deferred.

Drill Baby Drill: Why Expanding Oil Production Still Matters for Economic Growth, Security & Global Stability

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For more than a decade, public debate surrounding energy has been defined almost entirely by the imperative of decarbonisation, ESG screens, and the political urgency of transitioning toward renewables. Governments, sovereign wealth funds, and large institutional capital allocators have been encouraged — and in many cases compelled — to shift funding away from hydrocarbons and toward solar, wind, hydrogen, and batteries. Yet the hard reality that continues to assert itself is simple: global societies remain overwhelmingly dependent on hydrocarbons, both as an energy source and as the irreplaceable feedstock for industrial production and logistics.

The much-maligned “Drill Baby Drill” policy position, shorthand for expanding domestic oil and gas extraction,  is often caricatured as outdated, environmentally negligent, or backwards-looking. But stripped of the politics, the logic of increased oil production remains compelling on economic, national security, and industrial grounds. For companies operating within the energy supply chain, traders, producers, refiners, and logistical operators, this reality is especially clear: hydrocarbons are not disappearing, the world is still short of energy, and the opportunity to fund and profit from oil transactions remains structurally significant for at least the next three decades.

At IntaCapital Swiss SA, we specialise in structured collateral financing, trade finance, and capital facilitation for legitimate, well-documented transaction flows — including oil trading, allocation funding, shipping, and production-linked financing. From our vantage point in the capital markets, the pro-production energy thesis is not ideological; it is grounded in commercial practicality and global macro conditions.

Oil Remains the Dominant Energy Source — And it Will For Decades

The starting point is empirical reality. Despite unprecedented investment into alternative energy, hydrocarbons still account for:

  • Over 80% of the global primary energy supply
  • Over 95% of transportation fuel
  • Near 100% of aviation, maritime, and heavy machinery fuel

Even optimistic transition forecasts from major agencies — including the IEA, EIA, and OPEC — anticipate substantial oil demand well into 2050, driven largely by non-OECD population growth, shipping expansion, urbanisation, fertiliser needs, plastics, petrochemicals, lubricants, and synthetic materials.

The “energy transition” debate tends to assume that oil is primarily a motor-fuel problem. But one cannot build solar panels, wind turbine blades, semiconductors, medical polymers, or electric vehicle tyres without petroleum derivatives. Even renewables depend on hydrocarbons for extraction, smelting, transportation, composite manufacturing, and installation.

Oil is not just a fuel — it is a foundational industrial material.

Expanding Production Lowers Costs & Protects Consumers

The economics of energy supply are as straightforward as any other commodity market: when production lags consumption, prices rise. For the last decade, policy pressures and ESG capital restrictions have underfunded upstream development. As a result, reserves have not been replaced at the pace required to stabilise long-term pricing.

When oil supply is restricted, the effects cascade across the economy:

  • Transport costs increase
  • Logistics and freight inflate
  • Food becomes more expensive
  • Manufacturing input costs rise
  • Consumer goods absorb energy-linked price increases
  • Governments face inflationary pressures

Discipline in upstream investment may be popular with shareholders seeking dividend yield and with activists focused on decarbonisation, but it is economically regressive. The households most impacted by expensive energy are not the wealthy; they are lower-income consumers for whom fuel and food expenditures represent a larger share of disposable income.

Expanding production through offshore platforms, shale development, onshore drilling campaigns, and improved refineries throughout has the opposite effect: downward pressure on prices, improved logistics competitiveness, and reduced inflationary strain throughout the economy. In macro-economic terms, an expanded hydrocarbon supply is profoundly pro-consumer.

Energy Security Cannot Be Outsourced

Perhaps the most powerful argument for expanding domestic oil production is geopolitical. Nations that rely on imported energy — particularly from adversarial or unstable regions — incur strategic vulnerabilities. Europe learnt this lesson twice in modern history: first with the geopolitical leverage of Russian natural gas, and more recently with global LNG and diesel supply constraints.

Energy is strategic sovereignty. If a nation cannot feed, fuel, and defend itself without foreign supply chains, it does not control its own outcomes. For this reason, countries including the United States, Saudi Arabia, UAE, Qatar, Brazil, Angola, and Canada are increasingly expanding their upstream capacity despite public climate rhetoric. The “Drill Baby Drill” position — when recast in strategic language — simply states: Domestic energy production equals national security.

From an investor and lender standpoint, energy security translates into long-duration capital commitments, infrastructure build-out, and predictable export revenue streams. These are precisely the conditions under which private corporate funding, trade finance, and structured collateral facilities thrive.

Oil Revenues Fund the Transition — Not the Other Way Around

Another uncomfortable truth: every successful renewable transition in history has been funded by fossil fuel prosperity. Nations that possess hydrocarbons — particularly Saudi Arabia, UAE, Norway, and the United States — are not abandoning fossil fuels. They are monetising them to accelerate modernisation, diversification, and future energy integration.

The slogan could be inverted as: Drill Baby Drill = Finance Baby Finance. It is not oil vs renewables; it is oil funding renewables. When oil is scarce and expensive, consumer acceptance of energy transition weakens, and governments lose the fiscal room to subsidise innovation. When oil is abundant and competitively priced, governments can directly channel cash flow into infrastructure, EV charging networks, nuclear modularity, and battery chemistry R&D. The global transition requires capital, and hydrocarbons remain the financial engine that provides it.

Market Liquidity in Oil Trade Creates Funding Opportunity

For firms like IntaCapital Swiss SA, the significance of expanded oil production is not merely theoretical; it directly influences transaction demand. The global oil and refined products sector is characterised by:

  • High-value spot and forward trades
  • Allocation-based offtake agreements
  • Refinery output contracts
  • Shipping and storage operations
  • Letters of credit utilisation
  • Collateralised performance obligations
  • Intermediated allocation structures

Where barrels are moving, there is demand for:

  1. Allocation funding
  2. Performance bonds
  3. Trade finance lines
  4. Collateral transfer facilities
  5. Warehouse & shipping finance
  6. Refinery output pre-financing
  7. Syndicated export structures
  8. Commodity-backed funding instruments

Historically, energy traders and allocation holders have faced funding gaps due to collateral requirements, KYC/AML scrutiny, or misalignment between banking risk appetites and commodity settlement cycles. Structured private capital has filled that gap — and continues to do so globally. Expansion in upstream production directly increases this flow, creating a larger universe of transactions requiring structured funding and credit enhancement.

Why ESG Capital Boycotts Created a Funding Vacuum

Over the last five years, major banks and sovereign funds adopted stringent ESG restrictions on hydrocarbon investments. While politically fashionable, this capital withdrawal has created a financing scarcity that private lenders, hedge funds, commodity houses, and structured intermediaries are now exploiting.

The irony is unavoidable:

  • Oil demand increases
  • Oil supply is constrained
  • Capital is restricted from upstream investment
  • Price volatility rises
  • Private capital steps in at a premium

Far from eliminating oil, ESG has made oil more profitable for those willing to fund it. For financing firms who understand the sector, this environment has created attractive margins, strong collateralisation structures, and heightened demand from credible counterparties seeking allocation funding or offtake financing.

The Global South Will Drive Oil Demand, Not the West

Another misconception often embedded in Western policy discourse is the assumption that energy demand patterns are uniform across the globe. They are not. Over the next 25 years, population growth and middle-class expansion in Africa, South Asia, Southeast Asia, and the Middle East will drive incremental consumption of:

  • Diesel
  • Jet fuel
  • Marine bunker fuel
  • Chemicals and plastics
  • Fertilisers
  • Asphalt
  • Petrochemicals

Even if OECD nations reach aggressive EV penetration and renewable diversification targets, the Global South is only beginning its industrial build-out. This difference is not ideological; it is demographic and developmental. The global oil industry will therefore not contract — it will re-centre.

Conclusion: Expanded Oil Production Is Rational, Beneficial & Bankable

The “Drill Baby Drill” energy thesis is not a relic of the past. It is an economically rational, strategically necessary, industrially indispensable, and financially attractive proposition anchored in material demand. The global economy still runs on hydrocarbons, and it will continue to do so for decades. Transition will occur — but it will not eliminate the need for oil; it will simply change the demand profile.

For companies involved in the sector — from upstream production to trading, refining, shipping, allocation management and distribution — the implication is clear: the real bottleneck is not rhetoric, it is capital.

Funding Oil Transactions — IntaCapital Swiss SA

IntaCapital Swiss SA facilitates structured financing for credible oil and refined product transactions globally. We support:

  • Allocation funding
  • Performance bonding & collateral transfer
  • Refinery & pre-export financing
  • Offtake funding
  • Collateral-enhanced trade finance structures

Applicants seeking oil transaction funding, allocation financing, or credit enhancement are invited to present their proposal for review, including:

  • Allocation or supply documentation
  • ICPO, SPA, or equivalent
  • Transaction flow structure
  • Counterparty details
  • Required financial instruments or facilities

To discuss funding options in confidence, contact our transaction structuring team.

UK Economic Outlook: Navigating the Era of ‘High-Tax Stability’

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The UK’s economic landscape is undergoing a fundamental shift. After years of market shocks, the current trajectory is moving toward a period of “High-Tax Stability.” For investors and business leaders, this means the risk of a sudden financial crisis has dropped, but the challenge of slow growth has increased.

This outlook reflects the current Labour government’s strategy of combining strict fiscal rules with historically high taxes between now and 2026.

The Core Shift: Stability Over Dynamism

The primary fear for the UK is no longer a sudden bond market crash, but rather a “slow-bleed” in private sector investment. Because the UK is facing a 70-year high tax burden and significant public debt, there is very little room for traditional economic stimulus. Instead, the government is pursuing a strategy of defensive consolidation, prioritising solvency and institutional safety over aggressive growth.

Assessing the Risks and Policy Mix

To understand where we are heading, we look at the key drivers of the UK economy:

  • Institutional Stability (Strong): The UK remains a safe harbour for capital because its legal and financial institutions are respected and predictable.
  • State-Led Investment (Execution Risk): The government is leaning on an activist, state-guided industrial strategy, using initiatives like the National Wealth Fund and GB Energy, to offset weaker private investment. However, the success of this approach depends heavily on effective execution.
  • Labour Market & Tax (High Risk): Increased costs for employers, such as the rise in National Insurance, are cooling the jobs market. We expect unemployment to hover around 5% as businesses adjust to the higher cost of doing business.
  • Green Transition (Sector Risk): While ambitious green targets are a priority, mechanisms like the planned carbon border tax could unintentionally hurt energy-intensive sectors, such as steel and chemicals, if not carefully designed.

What This Means for Investors

The era of “volatility plays”, betting on big, sudden market swings, is ending. We are now entering an era of efficiency and complexity. In this environment, opportunities are most likely found in assets that benefit from regulation and complexity, such as structured solutions, cross-border planning, and alternative capital. Success will require navigating a “Eurozone-style slog” where growth is modest (projected at 1-2%), but the environment is predictable.

The Bottom Line

The UK’s economic architecture is sound, but the engine is currently being throttled by a high tax and regulatory burden. For capital allocators, the UK offers the rare premium of predictability, provided you have the expertise to navigate a more regulated and sophisticated landscape.

A Brief Summary of the UK Economy under the Current Labour Government

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To date, the UK economy is showing mixed signals. Real wages have improved, but have been countered by rising unemployment and a softening labour market. There are significant fiscal challenges (some inherited) where government policies, such as rising minimum wages and increased National Insurance (NI) rates, have negatively impacted business investment and future growth. These factors are now jeopardising 50% – 60% of the UK pub industry. The government has received mixed reviews, mainly negative, resulting in politically damaging U-turns, and whilst the economy has experienced modest growth, the country is suffering from weak productivity.

While recent data shows a slight improvement in GDP, growth remains fundamentally weak and hampered by long-term low productivity. Furthermore, negative forecasts have now overtaken previous optimism, suggesting that future growth will be slower than initially projected. On the jobs front, despite some vacancies, the labour market is still showing signs of weakening, together with a cooling in the jobs market.

The impact of government policies has harmed businesses with rises in employer NI, which has increased hiring costs and increased the minimum wage, also raising concerns for business costs. The government is struggling to balance and restore investment, which has declined due to a lack of confidence in its fiscal responsibility and integrity. When combined with persistently low productivity, this weak investment leaves the UK economy facing significant headwinds in the years ahead.

Outlook for Global Currencies 2026

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Experts in the currency markets suggest that in 2026, projections show that the US Dollar will be weaker against most major currencies, primarily driven by easing from the Federal Reserve, as other central banks normalise policies, suggesting a narrowing of interest rate differentials. The Pound is expected to be on the volatile side and may see modest gains against the US Dollar, the Japanese Yen may appreciate gradually, whilst the Australian Dollar and the Euro are expected to firm modestly.

GBP/Sterling – GBP

Analysts in the sterling arena expect the pound to experience headwinds in Q1 and Q2 of 2026, mainly due to interest rate cuts, weak growth and political uncertainty. Cable (GBP/USD) may well strengthen if the new chairman of the Federal Reserve decides on a faster rate-cutting cycle, whilst GBP/EUR may well trend lower as the US Dollar weakens, and monetary policy divergence could well benefit the Euro. However, experts warn speculators that markets could be infused with volatility due to geopolitical problems, especially between Russia and Europe.

Several financial experts and commentators have suggested that the BOE’s (Bank of England) MPC (Monetary Policy Committee) decisions in 2026 could be the primary risk to Sterling. If financial conditions worsen in 2026, the BOE has stated that it will further loosen monetary policy, and experts suggest that if inflation eases, growth and the labour market remain slow, and there could be multiple rate cuts across 2026, resulting in a negative impact on the pound, whilst also dampening its appeal.

US Dollar – USD

Analysts suggest that the financial market outlook for the US Dollar for 2026 remains bearish for Q1 and Q2, but the greenback may rally slightly in the second half of the year with only a modest decline by year’s end. These forecasts are based on analysts’ persistent concerns regarding the independence of the Federal Reserve, plus the possibility of lower interest rates. The DXY* is expected to face a turbulent time with considerable headwinds in Q1 of 2026. Whilst it enjoyed a high point at the start of 2025 (above 110), it was down 9.1% by the close of business 31st December, and it is expected to hit the mid-range 90’s by the end of this year.

*The DXY (US Dollar Index) – This index was created by the Federal Reserve in 1973 after the Bretton Woods** system ended and is now maintained by ICE Data Indices (the Intercontinental Exchange, which provides a comprehensive suite of global financial benchmarks). This index measures the US Dollar’s strength against a basket of six currencies: the Canadian Dollar, Euro, Japanese Yen, Pound Sterling, Swedish Krona, and the Swiss Franc. The index rises when the US Dollar strengthens and falls when it weakens, serving as a key benchmark for traders, businesses and central banks to gauge dollar performance.

**Bretton Woods – This system was a post- World War II international monetary framework that established a system of fixed exchange rates by pegging major currencies to the US Dollar, which was in turn convertible into gold. The system aimed to foster global economic stability and prevent the competitive currency devaluations and protectionism that contributed to the Great Depression and the previously mentioned war. The US Dollar was the world’s primary reserve currency and the only one directly convertible into gold for foreign governments and central banks at a fixed rate of $35 per ounce.

The system collapsed due to persistent American balance of payments deficits, rising inflation from Vietnam War spending and the resultant surplus of US Dollars held by foreign central banks (which eventually exceeded the US gold reserves) and eroded confidence in the dollar’s convertibility to gold. As such, on August 15th, 1971, President Richard Nixon unilaterally announced the suspension of the US Dollar direct convertibility to gold.

The independence of the Federal Reserve is a key factor as to where the US Dollar will go in 2026, and many market experts have their eyes on not only the replacement of the chair of the Federal Reserve (a President Trump pick) but also whether or not President Trump is successful in his attempts to oust Fed Governor Lisa Cook. If he is successful, experts advise that there will be more outflows from US assets, particularly in AI and fixed income, placing more negative pressure on the greenback, especially if the President is then emboldened to try and remove further Fed governors.

While some expect the US Dollar to weaken, a contrary argument suggests that this dip will be temporary. Analysts believe that by Q3 2026, the combined impact of government spending and new trade tariffs will likely drive up inflation. This would force the Federal Reserve to raise interest rates, which would, in turn, push the value of the US Dollar higher.

Despite the predicted uptick in the US Dollar, the currency will still face many roadblocks, such as dealing with the massive debt limit, a potential AI bubble burst and increasing challenges from member nations of BRICS***

***BRICS – Is an intergovernmental agency and is an acronym for Brazil, Russia, India, China, (all joined in 2009) followed by South Africa in 2010 as the original participants. Today, membership has grown to include Iran, Egypt, Ethiopia, the United Arab Emirates and Saudi Arabia, with Thailand and Malaysia on the cusp of joining. Russia sees BRICS as continuing its fight against Western sanctions, and China, through BRICS, is increasing its influence throughout Africa and wants to be the voice of the ‘Global South’. Several commentators feel that as the years progress, BRICS will become an economic and geopolitical powerhouse and will represent a direct threat to the G7 group of nations. Currently, this group represents 44% of the world’s crude oil production, and the combined economies are worth in excess of USD28.5 Trillion equivalent to 28% of the global economy.

The Euro – EUR

In 2025, the Euro managed to record one of its strongest rallies since 2016 against the sterling and the US Dollar, its strongest rally since 2017. President Trump’s tariff policy proved to be extremely beneficial for the Euro*, and despite several interest rate cuts, the ECB’s (European Central Bank) boosting of the local economy was considered most beneficial. Some analysts favour another rate cut in 2026, but most appear to favour the ECB remaining on the sidelines as ECB President Christine Lagarde and her board of governors seem content with both the outlook for growth and inflation.

US Tariffs Beneficial to the Euro – Whilst tariffs were not inherently beneficial to the Euro (they often hurt EU exporters), they could indirectly strengthen the Euro by making EU goods reactively more expensive for U.S. buyers or causing US consumers to buy cheaper EU goods when tariffs were applied to other countries –  thus improving the competitive field for EU products in the US market leading to potential Euro strength.

A number of analysts have a bullish stance for the Euro in 2026, expecting the currency to gain against most currencies, except those in Scandinavia, with reservations against the pound sterling. Exchange experts have predicted that by year-end 2026, the EUR/USD will stand at 1.22, expecting the majority of US Dollar weakness to emerge after Q1, whilst projections for sterling and Japanese yen are EUR/GBP 0.84 and EUR/JPY 189. Analysts suggest that positive impacts on the currency will emerge post Q1, such as German fiscal policy, Chinese stimulus measures and currency hedging activities.

Adding to the bullish sentiment for the Euro, experts advise that foreign investors have returned to the European equity and bond markets, and with the ECB currently happy with inflation, 2026 should see a continuation of the inflow of capital. Analysts suggest that the inflow should increase if Russia and Ukraine manage to sign a peace accord to end the war. On 23rd February 2025, a German government coalition was formed, and later they passed a Euro 1 trillion spending package, which experts feel will continue to support the Euro. One downside is France and the country’s ongoing political turmoil, which did limit gains in 2025, and analysts believe this will carry on into 2026.

Japanese Yen – JPY

Currency experts advise that the demand for Yen in 2026 will remain modest, leaning towards tepid in response to the BOJ’s (Bank of Japan) raising interest rates by 25 basis points to 0.75% (the highest level since September 1995) on 19th December 2025. Currency experts suggest that the soft response to the increase in interest rates is that financial markets are worried about Japan’s fiscal sustainability, especially as they feel there is an unfavourable policy mix of expansionary fiscal policy with loose monetary policy, which continues in real terms to keep yields low in Japan.

Some analysts suggest that the narrowing interest rate differential between Japanese bonds and their counterparts in the United States represents a fundamental driver in 2026 for an increase in the strength of the Japanese yen. If the Federal Reserve proceeds with expected interest rate cuts in 2026 and the BOJ proceeds with expected interest rate hikes, analysts advise that there should be downward pressure on USD/JPY during 2026. Financial markets are also aware of Yen carry trades, and sharp currency movements in either direction could precipitate an unwinding of these positions, currently valued by some analysts at USD 1 trillion.

Swiss Franc – CHF

The outlook for the Swiss Franc in 2026 is that investors will still view the currency as a very strong haven in times of global economic volatility and geopolitical upheavals. However, some experts suggest that if global economic and geopolitical conditions begin to stabilise in 2026, the currency could gradually weaken against the Pound Sterling and the Euro, especially if interest rate differentials come into play.

Other key drivers for the CHF  are economic growth divergence, where analysts forecast that the Euro may appreciate slightly against the CHF if, during 2026, a modest recovery occurs in the Eurozone and other key trading partners, reducing the premium on Switzerland’s haven status. Monetary policy divergence is another driver, and analysts advise that the SNB will probably keep interest rates low or even move to 0.00%, whilst the Federal Reserve and maybe the ECB will adjust their policies, which in turn can affect exchange rates.

Overall, the main arguments in favour of the Swiss Franc are low inflation, low debt, political stability, a high current account surplus and a highly innovative economy. Couple the above with the recent agreement on tariffs with the Trump administration, which has eliminated a serious threat to the country’s competitiveness, the Swiss Franc stands out as a top safe-haven currency. Several forex analysts predict that in 2026, the EUR/CHF will edge higher, whilst it is felt that the USD/CHF may stabilise around the 0.78 mark.

Chinese Renminbi  – CNY

A number of experts and analysts have forecasted a slight appreciation of the Renminbi against the US Dollar in 2026, with the USD/CNY ending the year in a range of 6.85 and 7.05. Such predictions are based on a persistently large current account surplus, the PBoC’s (People’s Bank of China) priority on currency stability and narrowing yield differentials with the USA. With regards to currency stability, the PBoC is expected to utilise policy tools such as the daily fixing, which manages volatility and to continue with gradual monetary easing, which includes rates and RRR (Reserve Requirement Ratio)* cuts in order to support domestic growth.

*Reserve Requirement Ratio – This represents the portion of deposits that banks in China must hold in reserve, and ifthe  PBoC cuts the RRR, it will boost liquidity and support economic growth. Interestingly, the RRR is not uniform, with larger banks having a RRR of 9% and smaller banks 6%.

On the domestic front, challenges like the current property market downturn, deflationary pressures and weak consumer demand could negatively impact appreciation pressures on the currency, whilst geopolitical pressures such as trade tensions between China and the United States (currently enjoying what may be a temporary truce*) could also put negative pressure on the Renminbi. However, further fiscal policy will be seen by the issuance of front-loaded 2026 bonds in Q1 of this year, plus the implementation of two RMB 500 billion stimulus packages introduced at the end of Q3 and beginning of Q4 last year.

*Trade Truce – The current trade tensions between the United States and China are currently enjoying a one-year sabbatical, which could be thrown into disarray as President Trump is threatening 25% tariffs on goods from all countries that trade with Iran.

Australian Dollar – AUD

Experts suggest a fairly positive outlook for the Aussie Dollar in 2026, with potential appreciation against a number of currencies, especially the US Dollar, with drivers suggested as strong commodity prices and diverging monetary policies. The RBA (Reserve Bank of Australia) has, amid upward inflationary pressures, adopted a somewhat hawkish stance with financial markets pricing in an early rate hike in 2026, whilst the Federal Reserve are again expected to implement one or two rate cuts this year with experts predicting a negative impact on the US Dollar and a positive impact on the Australian currency.

On the commodity front, the AUD and commodity exports are closely tied together (e.g. Iron Ore $116 Billion, Oil and Gas $82.5 Billion, LNG $72.6 Billion, Coal Mining $71.4 Billion), and significant support for the currency is expected to come from continuing strength and an across-the-board recovery in global commodity prices. Furthermore, the health of China’s economy is an important driver of the AUD (not the primary driver that it used to be) as it is Australia’s biggest trading partner. Foreign exchange experts are predicting that by the close of business in 2026, AUD/USD is expected to be near the 0.68 level.

Canadian Dollar – CAD

Along with the United States, both countries are signatories to the US-Mexico-Canada Trade Agreement (USMCA – replaced the North American Free Trade Agreement – NAFTA in July 2000), which is up for renegotiation this year, with President Donald Trump threatening to withdraw even though it makes up 25% of trade with the USA. Whilst no one can predict the outcome of the review, this is a potential wild card that can impact both the Canadian and Mexican currencies.

Analysts expect the Canadian Dollar (AKA the Loonie*) to strengthen against the US Dollar if, as expected, the Federal Reserve continues its monetary easing cycle by cutting rates again in 2026, whilst the BoC (Bank of Canada) has signalled the possibility of halting monetary easing in 2026. As a result, several forex analysts have suggested that at the end of Q2, the USD/CAD could be sitting at 1.3488 and at the end of 2026, it is projected to sit at 1.3507.

*The Loonie – The Canadian Dollar is also affectionately referred to as “the Loonie” because in 1987 a popular $1 coin was introduced into the monetary system featuring a “common loon” (a distinctive waterbird) on its reverse side.

Experts are expecting the Canadian economy to enjoy a modest positive impetus in 2026, projecting a growth of circa 1.4% with support coming from government investment/spending initiatives, plus a potentially improving trade outlook, giving the Canadian Dollar a boost in Q3 and Q4. A negative review of the USMCA could result in an escalation in current trade tensions, weighing negatively on the currency, whilst a fall in oil prices is expected to have the same effect.

Mexican Pesos – MXN

In 2025, the Mexican Peso closed out the year 22% higher than the beginning of the year against the US Dollar, and underlying the increase were higher interest rates in Mexico, whilst the Federal Reserve engaged in monetary easing, and companies exporting to the USA moved their manufacturing base to the United States. Further positive impacts on the Peso were strong wage growth, new records for international visitors and tourism and stable economic conditions under the current President, Claudia Sheinbaum Pardo.

Experts advise that continued high rates relative to interest rates in the United States into 2026 will make Mexican Assets attractive under the carry trade scenarios, which will provide a positive impact for the Peso especially if the Federal Reserve continues on its dovish monetary path. If continued international tourism increases, plus ongoing nearshoring* together with continued FDI (Foreign Direct Investment) into Mexico, such factors will continue driving strong demand for the currency. According to a number of analysts in the peso arena, they expect the currency to remain around 19 pesos per dollar in 2026, though there are those analysts who predict that the peso will end the year in the upper 17-peso range.

*Nearshoring – is a business strategy where a company moves its base of manufacturing or services usually to a country that is geographically close or shares a border with the country the company is exporting to, e.g. Mexico/USA.

Emerging Market Currencies Overview

Experts from emerging markets (EM) suggest the outlook for currencies in 2026 is fairly positive, with the expectation that they will appreciate against the US Dollar due to a dovish Federal Reserve monetary policy. Capital inflows into EM assets will be encouraged by the anticipated Federal Reserve interest rate cuts, improving EM economic fundamentals and moderating inflation. Currently, EM assets are trading at a discount to their counterparts in the developed economies, which is attracting capital inflows, especially as investors seek yield and portfolio diversification.

What are the Consequences of a United States Invasion and Takeover of Greenland?

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A Shift from Rhetoric to Reality

Once unthinkable, today the staggering reality is that the United States of America, under the leadership of President Donald Trump, could actually invade and claim ownership of Greenland, a country owned by its European ally, the Kingdom of Denmark. Last Friday, 9th January, President Trump increased his rhetoric by saying, “I would like to make a deal, you know, the easy way. But if we don’t do it the easy way, we are going to do it the hard way.” In other words, he is willing to secure the territory by abusing international law by marching into Greenland and taking over.

The Shadow of Venezuela and the NATO Crisis

In the past, the musings of President Trump about taking over Greenland were not taken seriously by his European allies (members of NATO* – North Atlantic Treaty Organisation). The recent invasion of Venezuela has brought home the stark reality that President Trump could easily live up to his word and invade Greenland. As usual, when it comes to geopolitical and global economic surprises, the leaders of the EU (European Union) have been found wanting. Indeed, Mette Frederiksen, Prime Minister of Denmark, said an attack by the United States on Greenland could spell the end of NATO.

*NATO – the North Atlantic Treaty Organisation is a political and military alliance of 32 countries from Europe, North America and Great Britain. Founded in 1949 for collective security and mutual defence against aggression, NATO was created primarily to counter Soviet aggression, with its core principle being Article 5: an attack on one member is an attack on all, obligating members to assist. NATO provides a forum for defence consultation and cooperation, managing crises and ensuring the security of its members. Today, we have a scenario where the strongest member (the United States) potentially attacks a weaker member; the consequences to geopolitics and global economics are potentially devastating.

Strategic Objectives: Security and Resources

Experts now suggest that since the invasion of Venezuela, President Trump is now willing to deploy the U.S. military to achieve his foreign policy goals, with Greenland currently top of the President’s shopping list. In both his presidential campaigns, Trump’s table-thumping mantra of “America First” has never been more pertinent to both his enemies and his allies, but what is it about Greenland that has given President Trump his thirst for invasion? Experts say that the President wants America to own Greenland for national security reasons and not for rare earth minerals; however, in recent years, both Russia and China have become interested in the minerals that can be found in Greenland, not to mention the potential bonanza of oil and gas reserves.

The China-Russia Security Threat

In the United States, many Republican lawmakers agree with President Trump that China and Russia pose a significant security risk—a threat that would increase dramatically if either country gained controlling influence over Greenland. Consequently, experts foresee two potential paths: President Trump could reach an economic agreement with Denmark for joint control, or he could simply leverage the military might of the United States to secure the territory, given that few could realistically stand in the way.

The European Response and Territorial Integrity

However, the Danish Prime Minister, Mette Frederickson, has warned that any attempt to take over Greenland would result in the end of the long-standing transatlantic alliance. Furthermore, she recently announced on Danish TV that Greenland belongs to Greenlanders, whilst European leaders have urged President Trump to respect the island’s territorial integrity and said it falls under the bloc’s collective security umbrella. 

The consequences of a move to Greenland by the United States will be far-reaching. Currently, in Europe, political analysts advise that the continent is paralysed, with no set strategy to address the threats from President Trump. Experts suggest that if the situation deteriorates even further, with one member of NATO turning against another, NATO will not survive. The EU (European Union) is not designed to step in militarily if NATO collapses. 

The “Donroe Doctrine” and Global Instability

President Trump has already deposed the President of Venezuela (citing the Munro Doctrine*), citing influence from Russia and China, plus drug flows, as his reasons. The United States has coveted Greenland on and off for over 150 years, and as President Trump ups the ante over Greenland, one expert suggests that transatlantic relations are now on the brink of a fundamental breakdown. On top of this, the Prime Minister of the United Kingdom, Keir Starmer, has suggested putting British troops into Greenland. Imagine two NATO allies in direct conflict over Danish territory; the geopolitical implications are unthinkable.

*The Munro Doctrine – Declared by President James Munro in 1823, this was a U.S. foreign policy stating that the Americas were no longer open to European colonisation and warned against European interference in the Western Hemisphere, whilst the U.S. pledged non-interference in European affairs, establishing distinct spheres of influence and becoming a cornerstone of centuries of U.S. foreign policy. Key tenets include non-colonisation, non-intervention in European politics and separating American and European political systems and later expanded to justify intervention in “Latin America”.

Global Repercussions: Russia and Taiwan

On the global front, experts suggest that the United States/Greenland saga must be music to the ears of Russia’s President Putin, and not only will it legitimise in his eyes the Russian invasion of Ukraine, but also embolden him to further increase military and political pressure on the country’s leaders, hoping that they will sue for peace. Elsewhere, and as most people know, China’s leaders have always thought that the independent and sovereign state of Taiwan belongs to China, and the potential takeover by the United States of Greenland will surely embolden them to invade Taiwan. Several experts have agreed that these scenarios are a distinct possibility, and with the President of Venezuela already deposed, both China and Russia may view the potential invasion of Greenland as a green light for their own political ambitions.

The Semiconductor Crisis and the Cost of “America First”

Interestingly, Taiwan manufactures over 60% of the world’s semiconductors and more than 90% of its most advanced chips. Some experts suggest that, emboldened by President Trump’s actions in Venezuela or a potential move into Greenland, China may decide to invade Taiwan. Such a move would grant China control over nearly 90% of the global microchip supply, effectively making the United States and Europe dependent on China for everything from mobile phones and electric vehicles to basic household appliances like washing machines and tumble dryers. 

Analysts suggest that in order to compensate for this, the United States would have to develop increased chip-making facilities, which would need circa 50 critical minerals. Yes, Greenland has about 30 of these minerals, but with no industrial infrastructure or workforce, how long would it take the United States to catch up? All in all, President Trump’s ‘America First’ may well turn out to be a pyrrhic victory with China holding the trump cards on critical minerals and semiconductors/microchips. What concessions will then have to be made by the West to the potential upcoming political demands from China?

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