22
is exposed to significant tailwind from ultra-loose
monetary policy.
Conversely, the factors needed to raise political
tensions in Europe exist as well. In the not too distant
future, the European Union may have to distribute
many more hundred thousands of Syrian refugees,
which will require a tougher stance by Brussels.
In Berlin, some politicians are even talking about
imposing "economic sanctions" on countries such as
Poland if they fail to comply - read the Bloomberg
article,
Hungary's Orban Says Germany Struck `Secret' Turkey Refugee Deal .Indeed, this is a perfect
environment
for
policy
mistakes
and
fatal
misunderstandings – read also The Guardian article,
Polish PM rounds on European parliament head over 'coup' remark .Indeed, the European stock market
stands in front of a very bumpy road in 2016!
In the developed countries, the Japanese stock market
in particular may be exposed to the biggest downside
risk. First of all, foreign investors are heavily exposed to
this market. In addition, increasing global market jitters
in 2016 may trigger yen repatriation, which could
strengthen the yen dramatically to the disadvantage of
the stock market.