The unexpected events of the past week in Venezuela have shone a light on a potentially more muscular geopolitical approach of the US government in 2026.

Indeed, the first year of President Trump, marked by exceptional policy uncertainty, has seen largely becalmed markets, with the only spillover occurring in the immediate aftermath of the ‘Liberation Day’ tariffs in April.

However, the Venezuela episode does highlight the continued risks to the economy and markets in an increasingly fragmented global environment, particularly a European economy stuck in the middle of the hard power players.

The EU also continues to let a ‘good crisis go to waste’, with little progress on advancing the structural reforms recommended in the 2024 Draghi and Letta reports to boost the internal market.