Features of 2015 will probably be:
– A high level of risk and uncertainty: economic problems of the BRICS and Japan, stagnation of global trade, destabilisation of some countries by the fall in the price of oil and other commodities, and economic and political risks in Europe;
– A high level of liquidity, due to quantitative easing in Japan and the euro zone, and the very gradual transition to more restrictive monetary policies in the United States and the United Kingdom;
– No inflation, given the “end of Phillips curves”, while global growth will be lower than that which would stabilise commodity prices, resulting in low risk-free interest rates also due to plentiful liquidity. Investors will therefore, on the one hand, be pushed towards risky asset markets by liquidity and the very low level of risk-free yields, but on the other hand discouraged from investing in risky assets by high levels of risk and uncertainty: this is of course conducive to continuing high volatility, with investors moving in and out of the markets for risky financial assets.
