Allocation for January 2016

In December the main financial markets showed volatile dynamic on global central banks rate decisions.

The main resonance was caused by ECB chief Mario Dragi on the future policy of the bank. He said that ECB will hold low rates further and will not increase the volume of repurchase program in European government bonds market. The decision had a positive impact on euro currency that grew up sharply against US dollar.

FED has begun a rising rates cycle in first time since 10-year break. As expected, the US interest rate was increased to 0.5% (up to 0.25-0.5%). Further rates hike seemed to be slower than expected. As a result some buyers has come back to the stock markets.

Threat and challenges in world markets:
-  Liquidity crisis in global markets could become the 4th wave of crisis (the last one in current crisis cycle).
-  Acceleration of economic slowdown in China.
-  Aggressive rate hikes from FED.
-  Rapid destabilization in the middle East and jump in oil prices.
- The start of the 3rd World War on the territory of Syria (military of Russia, USA, Europe, Turkey, Persian Gulf states)