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-6

1)What You Missed In The Stock Market Last Week - Motley Fool

From www.fool.com - Today, 11:14 AM

TrueCar and Devon Energy were both winners this week after third-quarter results, but FireEye had a much rougher week for investors."

2) As 'Fedexodus' Looms, Big Stock-Market Gains 'May Be Behind Us' - Wall Street Journal (blog)

From blogs.wsj.com - Today, 11:13 AM

At first, the market seemed so, well, mature. The market didn't tank on Friday, in the face of that strong jobs report and rising odds that the Fed would hike rates. The market's maturity is getting tested on Monday."

3) Former Gordon Brown Advisor Damian McBride Says ‘Stock Up On Water, Market Crash Is Coming’

From www.nowtheendbegins.com -Today, 11:13 AM

A former adviser to Gordon Brown has urged people to stock up on canned goods and bottled water as stock markets around the world slide.
Damian McBride appeared to suggest that the stock market di..."

4) Is BRIC Investing Losing Its Appeal? - Bloomberg

From www.bloomberg.com - Today, 11:13 AM

Jeffrey Kleintop, Charles Schwab's senior vice president and chief global investment strategist, discusses corporate earnings and the outlook for global stocks with Bloomberg's Mike Regan and Betty Liu on "Bloomberg Markets." (Source: Bloomberg)..."

5)12 investing books to read if you want to get rich - Business Insider

From uk.businessinsider.com - Today, 11:11 AM

If you want to get rich, the single most..."

6) Central banks rescuing the stock markets? - Forex Crunch

From www.forexcrunch.com -November 7, 10:29 PM

This morning on the Tip TV Finance Show Clem Chambers, Founder of ADVFN, joined Nick Batsford to discuss how central banks are influencing the stock market, as"

Interesting Perspective on the Chinese Yuan Devaluation

While the Chinese Yuan devaluation has taken the global markets by storm this week, it certainly is not the first of its kind and pales in comparison to the 50% devaluation in the Yuan in 1994. A very interesting chart from dailyfx below provides insight into the fluctuations in the Yuan.

It also appears that the #Yuan is yet to catch up with the deteriorating macro economic back drop in China as per the next chart from dailyfx and the current devaluation may not help matters in the long term.


Regardless the contagion effect on the  #BRIC and other emerging economies can't be ignored as the threat of cheap Chinese exports flooding the market place is alive and well in the near term. The mere prospect of this has sent some BRIC currencies and stock markets sharply lower and this is likely to continue in the short term:

Interesting Perspective on the Yuan Devaluation http://t.co/TaHaJQo43u pic.twitter.com/SWDO52FyeD

— samuelR (@RajveerRawlin) September 7, 2015

Why I am Bearish on the Indian Stock Market Nifty Index?

BRIC Currency Crisis Bad for Indian Banking Stocks?

Weakness in the Indian #Rupee will most often translate into weakness for the Indian banking space as potential hawkishness forced on the #RBI in defense of the Rupee could hurt bank margins. The Rupee has weakened considerably since Russia raised interest rates to defend the slumping Ruble and more recently with China devaluing the Yuan.

Recent  topping action in the bank index could suggest a possible sell off in this space in anticipation of further Rupee weakness and potential hawkishness from the RBI. Just going back to August 2013 banks corrected over 30% when the Rupee fell to over 68 Rupees to the dollar and the RBI embarked on some serious tightening raising the overnight lending rate from 7% to 9%.

BRIC currency crisis bad for Indian banking stocks? http://t.co/SFzBN5BwiL pic.twitter.com/GvUnswEwGO

— samuelR (@RajveerRawlin) September 7, 2015