Markets Enter 2026 With Focus On Rate Cuts, Growth Risks, And Liquidity

Global markets opened 2026 with a cautious but constructive tone as investors shifted their focus toward the key themes expected to dominate the new year: central bank rate cuts, slowing global growth, and the return of liquidity after the holiday lull.

With major economies showing signs of cooling momentum, markets are increasingly aligned around the view that 2026 will mark the beginning of a coordinated easing cycle across major central banks. The Federal Reserve, ECB, and Bank of England are all expected to move toward lower rates, though the timing and pace remain highly data-dependent.

Equities enter the year near elevated levels following strong year-end rallies, leaving valuations sensitive to early economic surprises. Investors appear optimistic but selective, favoring sectors that benefit from lower rates while remaining cautious on areas exposed to weakening demand.

In fixed income, bond markets are expected to play a central role in shaping sentiment, with traders closely watching yield movements for confirmation that policy easing is approaching. FX markets are also poised for renewed volatility as expectations around policy divergence begin to shift.

Gold starts the year well supported as a hedge against macro uncertainty and policy risk, while commodities more broadly will be influenced by the balance between slowing demand and potential supply discipline.

As liquidity gradually returns in the first full trading sessions of January, markets are likely to move quickly to reprice expectations. The initial data releases of 2026 will be critical in determining whether optimism around rate cuts can translate into sustained risk appetite or gives way to renewed caution.