[Quarterly comment] The political turmoil is not astounding, and there are still many hidden dangers in 2017.

Huitong.com December 30th - 2016 is coming to an end, the gates of 2017 will also be opened, and the fourth quarter of "The Fall of the Year" has buried countless "bombs" for the new year. Let's review it together, this quarter is a lot of stories.

[Central Bank articles: In the fourth quarter, the major central banks have a large multi-dimensional stability, and the Fed’s interest rate hikes are expected to return]

The following are the major central bank policy changes in the fourth quarter and the 2017 monetary policy expectations:



[Political articles: Trump miracle, Korean fire anti-theft anti-mite]

After the twists and turns, the final election of the US election was settled



After Trump was elected, market risk appetite rose, and US stocks, bond yields and the US dollar both rose to record highs. However, Trump’s radical policy stances, such as trade protection and restrictions on immigration, have completely obscured the market outlook by “uncertainty”. If it is put into practice, the global pattern will be rewritten.

South Korea’s “闺门门” scandal

In the past few years, Cui Shunshi, a close friend of South Korea’s President Park Geun-hye, has improperly reviewed the documents of the relevant cabinet meeting and revised some of the president’s speeches. This has triggered a strong protest from the public opinion in Korea. The "闺蜜门" incident broke out.

After the incident continued to ferment, more people were suspected of illegal participation in politics. On December 9, the South Korean National Assembly passed the impeachment case against South Korean President Park Geun-hye with 146 votes to 56 votes overwhelming votes. At present, Park Geun-hye has been suspended from the presidency, and South Korean Prime Minister Huang Jiaoan replaced his administration.

Austrian presidential election

In the second round of the Austrian presidential election, which was reconvened on December 4, former Green Party leader Van der Belen won with a clear advantage and was elected as the new Austrian president. Analysts believe that in the context of European populism and isolationism, Van der Belen’s election prevented the far-right parties from taking office in Austria and sent a positive signal to the troubled Europe.

Italian constitutional referendum failed

On December 4th, the Italian constitutional reform referendum failed, and Renzi officially resigned on December 7. On the 11th, the new Italian Prime Minister Paolo Gentiloni took over and announced the new government list on the 12th. Almost all the ministers of the previous government were retained, which was designed to give financial markets peace of mind.

New Zealand Prime Minister's flash

On December 5, John Key suddenly announced his resignation as Prime Minister of New Zealand and the ruling party of the New Zealand National Party. On the 12th, Deputy Prime Minister and Minister of Finance Inglich officially took over as Prime Minister. Some analysts believe that the resignation of John Key and the blood exchange of the cabinet will, to a certain extent, prepare the party for the parliamentary election scheduled for 2017.

[Oil City: OPEC and non-OPEC reached a joint production reduction agreement, the oil market outlook is optimistic]

On November 30, the Organization of Petroleum Exporting Countries (OPEC) reached an agreement on production reduction for the first time in eight years, stipulating that the oil production will be reduced by 1.2 million barrels per day, and the new Nissan target will be 32.5 million barrels per day. The production reduction agreement will take effect on January 1, 2017, with a deadline of six months. At the same time, non-OPEC countries agreed to reduce production by 600,000 barrels per day, and Russia also promised to cut production by 300,000 barrels per day. OPEC will establish a special committee to supervise the reduction of production; temporarily suspend the OPEC membership in Indonesia. OPEC will meet again in May next year to reassess the agreement and decide whether to extend the production.

Since the oil-producing countries reached a production reduction agreement, oil prices have climbed more than 15%. At present, the market believes that the oil market will be balanced in 2017, and there will even be a short-term supply shortage, which means that oil prices are expected to continue to rise and look at the $60 mark.



[China article: RMB joins SDR and falls, Shenzhen-Hong Kong Stock Connect officially starts]

The yuan has fallen

This round of RMB plunging in the fourth quarter began in October after the RMB was officially included in the IMF Special Drawing Rights basket. From the beginning of October to the beginning of November, the RMB plummeted from the 6.70 mark to the 6.80 mark in just four weeks. Since then, due to the impact of the US dollar index, the exchange rate of the RMB against the US dollar has fallen for more than 10 consecutive days, breaking through the two integer points of 6.8 yuan and 6.9 yuan.



The news on December 28 was even more frightening to investors. The Bloomberg quotation system showed that the RMB was broken at the bank, but Bloomberg clarified this as a quotation error. The People's Bank of China also clarified the Weibo overnight, and the RMB exchange rate against the US dollar in the domestic inter-bank foreign exchange market was running smoothly in the range of 6.9500-6.9666 yuan.

For the trend of the future RMB, analysts said that the RMB exchange rate and China's economic situation are inseparable. Although various factors have led to the recent depreciation pressure of the RMB, the final decision of the RMB exchange rate is still the Chinese economy, only the Chinese economy remains. With steady development, the RMB exchange rate will eventually stabilize.

Shenzhen-Hong Kong Stock Connect officially opened

Shenzhen-Hong Kong Stock Connect officially opened on December 5, 2016. Regarding the impact on the market after the opening, the industry believes that the capital "southern" will be more than "north", the positive impact on Hong Kong stocks will be greater than the A shares, but will not increase the pressure of capital outflow, in addition, it is conducive to opening up and upgrading China's capital Market quality, A shares are one step closer to MSCI. However, some analysts said that Shenzhen-Hong Kong Stock Connect will not have the immediate effect of “opening the floodgates”. The impact on the stock markets of the two places is more than a long-term flow, from quantitative to qualitative.

[Middle East: Terror is not scattered]
At the time of the handover of the US regime and the resignation of the world, the situation in the Middle East is still turbulent and spreads to the whole world. The following is an incomplete inventory of recent related events:

1. On December 10, two bomb attacks occurred in Istanbul, the largest city in Turkey, killing 38 people, including 30 policemen and 155 others.

2. A church in Cairo, Egypt, was attacked on December 11, killing at least 25 people and injuring 49 others.

3. A car bomb attack occurred in Mogadishu, Somalia on December 11. The number of casualties was 29 deaths and 50 injuries.

4. On December 19, the Russian ambassador to Turkey, Karlov, attended a photo exhibition in Ankara, the capital of the country, and gave a speech. The gunmen were shot from behind and eventually died.

5. On December 19th, a large truck in Berlin, Germany, suddenly rushed into the Christmas market on Bright Square in the vicinity of the West Berlin Memorial Church, killing more than 50 people and injuring more than 50 people.

6. On December 19, Zurich, Switzerland, a gunman sneaked into a mosque in the city center on the same day and randomly shot at the crowd who was praying, injuring at least three people.

7. On December 23, the Security Council adopted a resolution reaffirming Israel’s settlement activities in the Occupied Palestinian Territory as “violating international law” and urging Israel to cease all settlement activities. Israeli Prime Minister Benjamin Netanyahu summoned the ambassadors of the 10 countries to protest at Christmas, and then announced that he would suspend his working relationship with the 12 countries. He also rebuked Obama for "secretly manipulating" the resolution. The situation in the Middle East has once again become tense.

8. On December 28, Turkey and Russia reached a ceasefire agreement with Syria and it is expected to implement an armistice plan throughout Syria on the 29th. However, this ceasefire plan is limited to the Assad government and the Syrian opposition, not including terrorist organizations in Syria.

9. On December 29, US President Barack Obama announced that he would impose sanctions on Russia for allegedly interfering with the US presidential election through the Internet. This included the expulsion of 35 Russian diplomats and the closure of Russian institutions in two buildings in New York and Maryland. The international situation is once again turbulent. Trump responded by saying: "It is time to look forward."

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