Global markets have started 2026 with confidence, but the themes that matter have not changed since the last central bank week of December. Price is still doing what it always does. It rewards positioning and punishes assumptions.
This week in one breath: US stocks finished 2025 with solid double-digit gains, the dollar ended 2025 with its sharpest annual drop in eight years, the FTSE 100 opened the year through 10,000, oil is trying to stabilise after its worst year since 2020, and Bitcoin closed 2025 down on the year. Silver did not just win gold in 2025, it lapped the field, broke the record, and still finished the year sprinting.
The mood: strong hands, but the calendar is a trap
Year-end flow can make markets look cleaner than they really are. Equity funds closed 2025 with back-to-back weeks of big inflows, and that tells you risk appetite is still alive.
But early January is where good prop traders get tested. Liquidity improves, headlines come back, and the market starts running stops again.
Prop trader reminder: January does not reward “new year, new me” trading. It rewards boring discipline.
FX: the dollar had a rough 2025, and 2026 starts with big questions
The US dollar fell 9.4% in 2025, the steepest annual drop in eight years, while the euro and pound posted their strongest years since 2017.
The yen is still the outlier. It barely rose against the dollar in 2025 even after two BOJ hikes, and the market is still wrestling with how fast Japan can normalise policy.
Sitting behind all of this is a very live 2026 risk: Fed leadership. Powell’s chair term ends in May, and the successor choice is expected early in the new year.
Prop trader angle: FX is where traders blow rules by revenge-trading “macro opinions”. Trade levels and reactions, not predictions. If the first move is messy, step aside and let the second move show you intent.
Index Markets: the US closed strong, the UK just printed a historic level
US indices ended 2025 with strong annual gains (S&P 500 about +16%, Nasdaq about +20%, Dow about +13%).
In the UK, the FTSE 100 broke 10,000 for the first time today, after rising nearly 22% in 2025, helped by banks, miners and defence.
Prop trader angle: new highs are not a sell signal. They are a volatility signal. If you are trading indices, expect sharper pullbacks and faster mean reversion. Keep stops logical, not emotional.
Oil: trying to bounce, but supply is still the story
Oil has started 2026 slightly higher, but only after a near 20% drop in 2025, the biggest annual loss since 2020.
OPEC+ meets on January 4, and the expectation is they keep output policy steady while the market remains focused on oversupply.
Prop trader angle: oil is where traders get chopped by headline spikes. If you trade it, reduce size into key meetings. One clean setup beats three messy impulses.
Metals: Silver’s big moment, and what decides if it is over
Silver (XAG/USD) has not just rallied, it has gone vertical. Reuters notes silver surged around 147% in 2025, hit an all-time high near $83.62 in late December, then pulled back before bouncing into early January.
Has the rise ended? Not necessarily. But it has likely moved from “easy trend” to two-way risk.
What matters now is structure, not opinions:
- $70 to $71 is the first line in the sand. If it keeps holding, the bull case stays alive.
- Below that, $66 to $68 becomes the next magnet if selling accelerates.
- $80 to $84 is the ceiling. Reclaim and hold that zone and the trend can reassert.
Prop trader angle: trade the reactions, keep size small, and do not let a parabolic market bully you into breaking your daily loss rules.
Crypto: the risk barometer is still selective
Bitcoin was set to finish 2025 down more than 6%, its first annual loss since 2022, after struggling to recover from its late-2025 slide.
That does not mean risk is “off”. It means risk is more selective. The market is choosing what it rewards.
Prop trader angle: crypto moves fast, spreads widen, and stops get hunted. If you trade it during evaluations, treat it like a specialist market, not a casual side quest.
The next catalysts that actually matter
- NFP US Jobs Report (Dec 2025): Friday, January 9, 2026 (08:30 ET). Markets are sensitive here, with expectations for modest job growth and unemployment already elevated.
- US CPI (Dec 2025): Tuesday, January 13, 2026 (08:30 ET). Another key checkpoint for rate expectations.
- Tariff and policy risk: investors are also watching a Supreme Court ruling tied to Trump-era tariffs and broader policy direction.
Trading takeaway: January is a rules month
If you are in a prop challenge, treat the first two weeks like a stress test of discipline:
- Do not widen stops to “make it work”
- Keep risk per trade consistent
- Avoid trading the first spike on major data
- If you hit a daily loss limit, you are done for the day. No hero trades.
PropIQ focus: trade the bigger picture, but earn entries
The macro backdrop is useful, but your account lives or dies on execution. Build your bias from the big themes, then only take trades when price confirms. No confirmation, no trade.
Disclaimer
This market commentary is provided for educational and informational purposes only. It reflects the opinions of the author at the time of writing and should not be taken as financial or investment advice.
Funded Trading Plus operates evaluation and simulated funded challenges, not live trading accounts. All references to trading, strategies, or market opportunities relate to simulated trading environments. Past market performance or individual trader results are not indicative of future outcomes.
About Andrew Lockwood
Andrew Lockwood is a seasoned professional trader with over 40 years of experience in financial markets. Starting his career on the floor of the London International Financial Futures Exchange (LIFFE) in the 1980s, Andrew has traded through multiple market cycles and volatility regimes. Today, he specialises in prop trading strategies, focusing on technical setups, risk management, and trader psychology. As the founder of PropIQ and a leading mentor, Andrew is dedicated to training the next generation of prop traders with proven, real-world trading methods.