Here’s wishing you a Happy New Year in 2015! If you’re looking at starting the hopeful New Year with resolutions to become a better trader, you’re in luck. Call levels is here to help.
Major themes to watch out for in 2015:
1) Oil Turmoil
Crude oil prices fell by more than 45% this year, making 2014 the worst year for petroleum since 2008. The oil glut was a combined result of greater extraction of shale oil in the USA which reduced its erstwhile huge imports and reduced demand worldwide due to slower growth of economy. This has been good news for oil-importing countries who find a great reduction in their import bills, although the drop was not appreciated by shareholders in energy companies.
However the oil debacle has had a tremendous adverse impact on oil and natural gas exporting Russia which was already weighed down with sanctions from the USA and the EU because of its incursions in Ukraine. How Russia responds to the looming economic crisis depends on how oil prices fare in the coming years and will affect markets and geopolitics worldwide.
2) The Difficulties of Quantitative Easing
With QE3 showing positive economic signs for the USA, it remains to be seen when the Fed will taper the programme. Although the ambiguous statements by the US Federal Reserve did not help with the uncertainty, most analysts estimate that the Fed will hike the interest rates from the current near-zero values sometime in mid-2015.
Meanwhile, the EU is facing its own challenges with the Eurozone showing a lack of economic growth. The fear that Greece may roll back its reform policies introduced as part of the deal with international lenders does not help. The European Central Bank seems to have no way ahead except Quantitative Easing, although no concrete announcements have been made about the structure of such a programme if indeed there is one.
3) Clash of Currencies
As most major currencies in Asia head for devaluation, the situation seems ripe for a full blown currency war. The Bank of Japan seems intent on continuing its fiscal stimulus programme leading to devaluation of the yen; however its status as a currency haven has prevented its value from falling drastically for the last few months. In spite of holding the voter’s confidence in the latest elections in Japan, Abenomics has yet bear fruit to save the recession-wrecked Japanese economy.
There has been a currency sell-off in most emerging market countries like Indonesia, India, Thailand and Malaysia, prompting China to engage in quantitative easing. A slowing growth in Chinese economy, in tandem with the measures taken by the government to make market forces a greater influence in the economy, may define the direction that Asian markets take next year.
With this, we want to wish all our readers and users a successful trading year ahead.
Call Levels Team