As we enter 2026, the global capital markets are experiencing a significant shift in logic. Renowned analyst David Woo pointed out that under the pressure of midterm elections, the US government is actively promoting the cost-of-living agenda. This policy shift has directly changed this year's trading theme—from pure re-inflation to a more aggressive deflation strategy.

Specifically, the core focus is on energy. By exerting strong control over oil and gas resources, the goal is to push oil prices and gasoline prices down to psychological bottom lines before the election. This is not only about combating inflation but also a practical move to compete for middle-class votes. The direct impact on the market: crude oil faces clear downside risks.

Meanwhile, the Venezuela incident reflects a substantive adjustment in the post-war international order. In this era of the return of power politics, traditional rule frameworks are being reshaped. What is the result? Gold receives strong support, and defense-related assets benefit.

However, the situation for emerging market stocks is entirely the opposite. When small economies lose the traditional safety premium, the risk of valuation re-evaluation follows. In other words, in the game of power reallocation, risk premiums for small economies surge significantly. For traders allocating to emerging market assets, this warrants serious consideration.