Key points
- We see three key takeaways from a topsy-turvy 2016 characterized by big market reversals in the second half.
- The Federal Reserve raised interest rates for the first time in 2016. Emerging market assets took a hit from higher U.S. yields.
- The Bank of Japan's (BoJ) statement and its outlook on growth and inflation will be in focus during a quiet week.
This year started on a fraught note with worries about China, plunging oil prices and sliding shares. Then reflationary expectations in the U.S. helped drive a second-half global growth pick-up and big market reversals. What stands out in the chart below: many risk assets' strong returns in a year of significant political upheavals. U.S. equities sit just below record levels, the 35-year bull market in government bonds likely ended and oil prices have doubled from 13-year lows. We see three takeaways from this topsy-turvy year.
Chart of…
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