The ViewIn turbulent year, mainland stock rout takes centre stage as global market mover
Political upsets in Britain and Italy had an impact on an already wobbly Europe but for worldwide fallout, Trump’s win in the US election and share rout take top honours
Which event, more than any other, had a decisive impact on global markets this year?
The word global is the key because many events hit individual markets really hard but to qualify for a global market changer, we need something more profound.
Let’s start however with some pretty substantial local events that, perhaps in other circumstances, would have had a more profound global impact. Earlier in the year Japan decided to lower interest rates to less than zero; by any standards that was a pretty bold decision but its global impact – in a very low rate environment – was underwhelming.
More recently the decisive referendum rejection of Italy’s then-Prime Minister Matteo Renzi’s reform plans and his subsequent resignation might have sent shock waves throughout European markets but in a zone where Spain, for example, barely has a government it proved not too unsettling not least because Britain’s decision to pull out of the European Union gave rather more cause for upset.
So why did the Brexit vote not qualify as one of the more substantial events of the year? It certainly made an enormous impact on the market for sterling and the initial response to Brexit did indeed provoke a global flurry but the flurry subsided, not least in Britain itself.