Interesting Market News and Views from Global Financial Markets-13

1) What’s really important about China’s stock market disaster, and what’s not

From www.washingtonpost.com - Today, 9:45 AM

What you need to know about the latest decline in China.

2) Gold near 7-week high as stocks retreat | Intra...

From www.scoop.it - Today, 9:44 AM

Gold traded near a seven-week high on Thursday as investors channelled money into the safe-haven metal amid a global stock market rout, worries over the Chinese economy and heightened geopolitical tensions.

3) Fears for world economy wreak carnage on stocks and oil

From www.dailymail.co.uk - Today, 9:39 AM

World stock markets tumbled and oil plumbed new lows Thursday as investors feared for the global economy on signs of a dramatic slowdown in powerhouse China....

4) Loonie sinks to lowest level in 12 years as Canadian oil price drops to record low

From www.cbc.ca - Today, 9:39 AM

The Canadian dollar hit its lowest level in more than 12 years as the main Canadian oil blend dropped to a record low price and stock markets tumbled.

5) Chinese stock market plunges again: For how much longer can China hold back the tide?

From www.telegraph.co.uk - Today, 9:39 AM

China used new rules to suspend stock market trading overnight after another
set of disappointing factory production figures. But for how much longer can
it keep up the pretence?

6) George Soros warns China market meltdown ominously echoes 2008

From www.dailymail.co.uk - Today, 9:43 AM

For the second time this week, trading was halted in Shanghai sending investors into a tailspin after the CSI 300 slipped a staggering 7 per cent just 30 minutes into the day on Thursday.

Predictions for 2016

Here are my predictions for 2016:

1) 2016 is finally the year when the Euro breaches parity to the Dollar:

2) 2016 will prove to be a year of significant under performance of risk assets, particularly global stock markets and emerging market currencies:

3) 2016 will prove to be the year where carry trades get liquidated as significant Yen strength resumes:

4) Volatility surges in 2016 as global risk aversion increases significantly:

Update on Those Predictions for 2015

At the beginning of 2015 I made some predictions for grins. Here's how they played out:
The original post containing the predictions can be found here: 

1) Dollar strength continues after a brief pause against all major currencies except the yen. With the Euro decisively breaking the long term support of 1.20.
This indeed was the year of dollar strength with the Euro below 1.10 and the trend may continue well into 2016.

2) Yen strength should result in a bout of carry trade liquidation that is a major negative for risk assets such as emerging market currencies and commodities.
While the dollar was broadly strong against the yen, the Yen was relatively strong against most other majors and 2016 promised to be year of Yen strength. This year saw a massive down move in commodities as expected.

3) Despite slowing growth in most emerging economies, policy makers have their hands tied and spend a whole lot of resources defending their weak currencies unsuccessfully with higher interest rates.
Emerging market currencies saw major take downs ( The Real & Rand being notable examples) across the board and the trend is set to continue in 2016.

4) This in turn sparks a major exodus of FII money flows out of emerging economies like the BRIC countries which causes their stock markets to significantly under perform despite their terrific performance in 2014 and greedy analysts calls for more.
BRIC stock markets under performed significantly in 2015 except China and more weakness is likely in 2016.

5) Volatility surges in 2015 as the Vix index doubles following a major take down of stock market indices across the globe.
The Vix crossed 50 briefly in August before retreating. A big up move in the Vix is likely in 2016.

6) Risk free assets will be among the safer bets in 2015 as risk appetites significantly wanes with treasury yields continuing to plummet with QE forever still continuing but without the desired outcomes.
Risk free assets outperformed risky assets globally but US long term yields rose as the FED began tightening Monetary policy. Risky free assets will continue to outperform in 2016.

Happy New Year!

Interesting Market News and Views from Global Financial Markets-12

1) The Rate Hike Stock Market Crash Has Thrown Gasoline Onto An Already Raging Global Financial Inferno

From theeconomiccollapseblog.com - Today, 7:03 PM

If the stock market crash of last Thursday and Friday had all happened on one day, it would have been the 7th largest single day decline in U.S. history.

2) Portugal's anti-austerity Left take power in watershed moment for the euro

From www.telegraph.co.uk - Today, 7:02 PM

AEP: The president threatened to sack the new government if it
challenges the EU's Fiscal Compact, deemed a formula for economic depression
by Keynesians

3) India pips US, China as No. 1 foreign direct investment destination - Times of India

From timesofindia.indiatimes.com - Today, 6:57 PM

India rises 16 places in Ranking Of Competitiveness

4) Buy the ETF, Not the Mutual Fund

From blogs.wsj.com - Today, 6:55 PM

On Dec. 10, Third Avenue Focused Credit Fund suspended its investors’ right to ask for their money back whenever they wish. That drastic step wasn’t unprecedented, however.

5) 2016: Why the bull market in stocks isn't dead yet

From money.cnn.com - Today, 6:55 PM

The U.S. stock market faces lots of threats in 2016. But market pros polled by CNNMoney think Wall Street will claw its way past these obstacles to reach new heights.

6) China to Extend Yuan’s Trading Hours, Widening Currency’s Appeal

From www.wsj.com - Today, 6:53 PM

China’s central bank, the PBOC, said it would increase the yuan’s trading day by seven hours, opening the currency to more foreign investors and narrowing the gap between the onshore and offshore foreign-exchange markets.