Political events move markets like never before.
You just need to look at the market fallout from Brexit, Donald Trump’s election as US president, and Emmanuel Macron’s first round victory in the French presidential election to see that politics and markets are inextricably intertwined with one another.
This isn’t expected to change going forward with North Korea tensions, ongoing Brexit negotiations, and the volatility of Trump’s government all causes for market concern over the next year.
That’s why analysts at Japanese banking giant Nomura have compiled a handy infographic that compiles the political and economic risks that could have major market impacts over the coming 12 or so months.
“Politics are clearly clouding the macro trading environment. If it were not for the recent set of political surprises the US outlook would be less dependent on Twitter alerts, the pound a lot higher and perhaps less concern over a possible nuclear escalation,” Nomura’s team writes.
“The politics can really catch markets off-guard. Earlier this year the potential of an upset in the French election weighed on the euro, but that was precisely the moment when the European data picture started showing strong upsides. And at the start of the year the “Trumpflation trade” was in full swing, but the dollar lost its stride.”
Check out the full infographic below:
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