2019 was quite a tumultuous year on the financial markets. We saw the oil oversupply crisis continue, the trade war between the US and China worsened, then improved, and Brexit was never quite off of investors’ minds. But as 2020 is just around the corner, it is time to look ahead and see what could be the most important events of the year coming up.
To begin with, the US-China trade war is likely to dominate the markets next year as well. Though the two countries recently agreed to scale back on some of their mutual tariffs and are preparing for the signing of a phase-one deal, the main issues between them are still unresolved.
China has been reluctant to implement the reforms that the United States demands (especially where intellectual property is concerned). Plus, the bulk of the tariffs are still in effect, weighing the global economy down. Investors are doubtful that the US and China will manage to find enough common ground to put an end to their dispute.
Another highly important event are the Presidential elections, which would take place in November 2020. In the months leading up to that, the Democratic Party will have to announce which candidate will be opposing Donald Trump. Then, there will be debates, polls, and other predictions. It will be interesting to watch how the Federal Reserve plans to handle the election and if the bank chooses to be inactive until after it is done.
Oil prices are also expected to remain under pressure in 2020. Because the likelihood of the trade war ending is pretty low, the global demand for oil will continue shrinking. Thus, even at the lower output levels that OPEC is trying to enforce, the market is still close to being oversupplied again, preventing prices from rising.
Lastly, Europe will offer an interesting battleground, where the interests of the bloc will come head-to-head with the United Kingdom’s plans for leaving the bloc. The UK will manage to get out of the EU on January 31, but then it will have just 11 months (courtesy of Boris Johnson’s policy-making) to negotiate a far-reaching agreement on trade, immigration, security, and other issues. If the two sides fail to compromise, there might still be something akin to a hard Brexit at the end of the transition period.
