The Key Global Events In 2016

At the end of each year, analysts review significant events that occurred in the prior 12 months and their impact on the World.

No one can forecast the future with certainty, what we do is assign probabilities to events and their consequences.

Below are 8 important events that will be Key events in Y 2016, their relation to some events that occurred in Y 2015 and their global impact in the future, as follows:

1. In February 2016, FIFA will run its presidential elections. Unfortunately, this event does not necessarily mark the start of an honest and reliable governing body. Following the FIFA corruption case disclosure in May 2015, most of the presidential candidates were either involved in criminal acts or held suspicious due to controversies over their business dealings and involvement in scandals.

2. The United Kingdom European Union membership referendum bill was unveiled in the Queen’s speech in May 2015. David Cameron promised that the referendum will take place by the end of Y 2017. Since then, Cameron has been working hard to reach a deal with the EU leaders, as soon as possible, before scheduling the referendum date. The government ruled out holding it with the elections in May 2016, but whether the UK will remain a member in the EU or not is a game changer.

3. In August 2016, the Summer Olympic Games will begin in Brazil, a country which is going through a severe economic crisis. In December 2015, thousands of protesters took to the streets to demand the ouster of President Dilma Rousseff.

4. The United States will have a new President this year. November 2016 is the scheduled time for the US presidential elections. According to public opinion polls, Hillary R. Clinton is likely to be the Democratic Party candidate. Yet, she is facing serious headwinds over a number of scandalous issues. It appears now that Republican National Convention will nominate Donald Trump as the GOP candidate.

5. United Nations secretary general Ban Ki-moon will conclude his term in December 2016. Generally, the appointment of the UN secretary general is criticized for lack of transparency and public discussions to present candidates’ views and qualifications. The former 7 Secretarie’s General were men, so will the first female hold the post in Y 2016? Perhaps…

6. There is a realistic prospect of the Indian Elephant overtaking the Chinese Dragon this year. In August 2015, China’s exports and imports dropped 5.5% and 13.8%, respectively, from last year. In September 2015, they further fell by 3.7% and 20.4% respectively Y-Y.

7. Y 2015 was the most active year for M&A in our history. The total volume of deals in Y 2015 exceeded that in Y 2007 to reach $4.3-T. Most of the deals were in the technology and healthcare sectors. Generally, the M&A activity pick-up is a good sign for the economy and its growth. Nevertheless, I doubt M&A activities will keep the momentum through Y 2016, because it’s hard to get a deal through regulators in an election year in the US and the Fed indicated that the era of low interest is coming to an end, but maybe not.

8. Crude Oil price was 120 bbl in June of Y 2014, then it fell sharply. In Y 2015, the Crude Oil price continued falling into the low 30’s and high 20’s, and since then it has been headlining the economy sections of newspapers and financial journals. Probably this continues in Y 2016.

If the world works with conventional wisdom and cheap Crude Oil boosts the global economy and its growth, then the demand for Crude Oil will grow and the price will rise. If cheap Crude Oil is the true reflection of the global economy, then a worldwide recession will, probably, hit by the end of Y 2016.

By Ahmed Sharaway, risk management analyist

Paul Ebeling, Editor

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