There is an undeniable correlation between geopolitics, market sentiment and the macro trading environment. In an era when a possible geopolitical escalation could be triggered by a single tweet, developed markets are beginning to behave more and more like emerging markets, with politics as a major influencer.
To help investors navigate what’s set to be increasingly politically-driven markets, we have created an event risk calendar focusing on event risks .
Here are five market moving events that should be on your radar:
China 19th National Congress: Will President Xi greenlight state-owned enterprise (SOE) restructuring and corporate deleveraging? This could be a potential turning point in the outlook for global growth (Calling time on Asia's sweet spot).
Escalation in US trade tensions? NAFTA negotiations may fail to come to a conclusion and roll into the New Year. President Trump is also expected to visit China and/or Japan around November which could lead to more aggressive trade actions against China (US reported to soon begin investigation into intellectual property violations by China).
Italian election risk: Most expect a snap general election to be called during the first quarter of 2018 with 20 May 2018 the latest date it can be held. The anti-establishment Five Star Movement (M5S) is currently neck-and-neck with the current ruling PD party (Rewinding the summer lull).
FOMC Chair Yellen’s term could end in February: Chair Yellen’s subtle rebuke of the Trump administration’s approach to financial regulation at Jackson Hole makes her reappointment marginally less likely. Gary Cohn is still the media’s most expected replacement; however, it’s still not clear.
BOJ Governor Kuroda’s terms could end in April: General opinion polls amongst market participants indicate Mr Kuroda’s reappointment is likely hence the Bank of Japan’s (BOJ) current policies are likely to continue (Policy implications of BOJ governor candidates).
For a full list of events we’re watching out for, please read Nomura’s Event Risk Radar.Read more