The final stretch

With the Italian referendum out of the way, the market’s focus will turn once again on Central Bank activity, particularly Thursday’s key ECB meeting this week and next week’s FOMC meeting in the US.

2016 has been laden with key events, from central bank activity but more importantly political events and geopolitical tensions and it has been anything short of mundane. Well it depends on what mundane means to most.

Brexit, US Presidential Elections, Italian Referendum, tensions in Turkey, the Fed and ECB meetings coupled with the endless list of economic data across all regions of the world.

The improvement of US economic data, an uptick in inflation in the Eurozone, the strong recovery in EM (in the first nine months of the year), the continuous slowdown in Chinese economic activity, the strong dollar, a strong recovery in commodities, stability in the price of oil. These are all but a few of the events which characterised and continue to shape what’s left of 2016.

Volatility as measured by the VIX index indicates that markets were pretty volatile this year, with the measure recorded having been registered above the 15 mark on a number of times and for persistently longer...