Asset Allocation for October 2016

Despite problems in European banking sector and the stagnation of US economy, markets remained stable near year-to-year heights.

Investors keep an eye on Deutsche Bank’s equties that fell to historical lows on uncertainty whether German government would support the bank or it shall file for bankruptcy. It’s more likely we can become witnesses of ‘European Lehman Brothers”.

OPEC members reached an agreement on oil production cut. Such a factor should keep oil prices near 50 USD/bbl but traders asks a lot of questions about how this cut could be implemented in practice.

In October macro statistic data should not be a surprise as well as central banks actions are predictable. Therefore, investors will focus generally on US elections war of words and corporate earnings releases.

Threat and challenges in world markets:
  -  Presidential Elections in US (8th November 2016)
  -  Systematic economy crisis China
  -  BREXIT aftermath – EU disruption and political crisis
  -  Monetary policy tightening by US FED

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