Top Market Themes of 2020

Top Market Themes of 2020

The new year opens a new decade. Will the trends we observed in 2019 continue in 2020? Here we look at the major economic and political events that could shape up the global economy this year.

US-China Trade Deal

 After more than a year of negotiations, billions of dollars in tariffs and moments of intense escalation, the United States and China signed “phase one” of a trade deal. The first trade deal which the US and China reached in December, will serve as a foundation for broader talks aimed at finally resolving the two-year-long trade war and cool the tensions between two economic superpowers. The US has retained some of the existing tariffs on around $375 billion of Chinese goods, aiming to ensure that China complies with further negotiations. Given the difficulty of last year's negotiations, the second round is not likely to be quick or smooth. Under these circumstances, there is plenty of downsides for markets to be expected this year, as the talks will undoubtedly hit road-blocks.

United States Presidential Election

The biggest event of the year, 2020 United States presidential election will take place on November 3, 2020. Donald Trump’s attempt to win a second term is likely to dominate the headlines for much of the next 12 months as he will most likely re-enter the battle on the Republican side. Uncertainty following the result, no matter what it is, could weigh on the U.S. stock market. Overall, the United States presidential election will have a significant influence on various spheres including the US-China trade war, sanctions over Iran and Turkey, and the US Stock market.

Brexit, the United Kingdom Leaves the EU

Attention now turns to phase II of Brexit. Boris Johnson, as the leader of the Conservative Party, now has a majority in parliament to deliver Brexit by the January 31st, and enter the transition phase with the EU. The transition, phase, due to end in December 2020, is to allow for trade negotiations between the UK and the EU to establish the terms of future trade once the UK leaves the single market at the end of the transitional phase.

The only question that remains are Johnson and the EU really on the same page? Any doubts about that will affect the GBP.  

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