Marc Chandler, Managing Partner at Bannockburn Global Forex, dives into the major macro forces shaping 2026, including a near-term bounce for the US dollar amidst a longer-term bear market. He discusses the conflicting influences between Fed policy and global factors affecting interest rates. Chandler also highlights how politics intertwines with economics, particularly in the US and Europe. Plus, he delves into the promising commodity cycle driven by AI demand and identifies robotics and quantum computing as future market leaders.
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insights INSIGHT
Dollar To Bounce Then Resume Its Decline
Marc Chandler expects the dollar to start 2026 firmer but remain in a longer-term bear market due to overvaluation and eventual Fed cuts.
He forecasts a modest January bounce then further declines across 2026 similar to 2025's magnitude.
insights INSIGHT
Short End vs Long End Of The Curve
Short-term rates will reflect Fed policy while long-term Treasury yields are driven by global forces like Japan and European pension shifts.
Expect curve steepening as Fed faces pressure to cut while long rates remain influenced overseas.
insights INSIGHT
Politics Back At The Center Of Markets
Politics will be a central market driver across the US, Europe, and possibly a snap Japanese election that could reshape economic outcomes.
Populist gains in regional German and UK elections and shifts in Japan add renewed political risk to markets.
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In this KE Report Daily Editorial kicking off 2026, we’re joined by Marc Chandler, Managing Partner at Bannockburn Global Forex and editor of the Mark to Market website. Marc walks through the major macro forces shaping the year ahead, from currency markets and interest rates to global politics, commodities, and the evolving AI trade.
Key discussion points include:
US Dollar Outlook for 2026: Why the dollar may see a near-term bounce early in the year, but remains in a longer-term bear market driven by overvaluation, Fed policy, and shifting global growth dynamics.
Interest Rates & the Yield Curve: The disconnect between the Fed’s influence on the short end of the curve and global forces shaping long-term Treasury yields, including developments in Japan and Europe.
Politics as a Market Driver: From US midterm risks to European populism and potential snap elections in Japan, Marc explains why political power and economic outcomes are increasingly intertwined.
Commodities & Critical Minerals Cycle: Gold, silver, and strategic metals remain central to the macro story as supply-chain security, export restrictions, and AI-driven demand fuel what could be a multi-year commodity cycle.
AI, Valuations & Market Leadership: A balanced look at the AI trade - overcapacity risks, potential shakeouts, and where emerging areas like robotics and quantum computing may drive the next phase of leadership.
Investment disclaimer:
This content is for informational and educational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security or investment product. Investing in equities, commodities, really everything involves risk, including the possible loss of principal. Do your own research and consult a licensed financial advisor before making any investment decisions. Guests and hosts may own shares in companies mentioned.
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