Insightperspectives January 1, 2016 v3

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Global economic
and political
update
In 2016, the world economy is headed towards
significant uncertainty due to an overwhelming number
of destabilising factors. In the Middle East, Western and
Russian interference has yet again ended up with
creating new and more dangerous security vacuums. In
this region, the in particular
reinforced existing conflicts (Syria, Yemen, Libya i.e.) –
read the Insightperspectives article,
(April 2015). Unfortunately, this may soon end up
with a direct military confrontation between sunni-led
Saudi Arabia and Shia-led Iran – read the BBC-article,
or click to see the distribution of Muslims in the
Middle East.
The world is also exposed to uncertainty after the
majority of central banks have spent all monetary
ammo since late 2008 to avoid a repetition of the
– read more in the article,
on page 17.
On the positive side, the monetary strategy appears to
have been a success in the United States, which was
also why the Federal Reserve decided to raise policy
rates in December – read more in the
In China, policymakers still have room for more
monetary easing even though Beijing is now
The next monetary leg,
however, could have serious global implications, as
more monetary easing needs to be combined with
steeper yuan depreciation (read the Insightview
article,
. This risks creating more jitters in emerging market
countries and may refuel the ongoing global currency
war – read more in the
In the Euro-zone, policy rates are already negative. In
December, this did not prevent
deeper into negative
territory, even though the European economy shows
visible evidence of gaining momentum – read more in
the Indeed, the Euro-zone is