January 16, 2014 1288 VIEWS

Thursday, January 16, 2014 3:44 PM / alastair.newton@nomura.com


Key Judgments (An 'Issues which keep me awake at night' Interim Update)


Markets’ interest in politics in 2014 is, I believe, likely to be rooted principally in country-specific – rather than systemic – risk, in particular:


MENA (Issue #1): Although Iran  (page 5) is likely to remain the major political (and potentially systemic) issue bearing on the oil price, other countries also have the capacity to move markets, eg, Iraq (page 6), Libya (page 11).


EM elections: Brazil (Issue #2, page 13), India (page 14), Indonesia (page 15), South Africa (page 16), Turkey (page 18) and, possibly, Thailand (page 17) all hold potentially market-moving elections in 2014.


China/Japan (Issue #3 and #4): The recent sharp uptick in frictions around China’s declaration of an air defence zone could have economic repercussions.


United States (Issue #5)/Eurozone (Issue #6): My base case of stability notwithstanding, sclerotic governance could trigger a crisis in the US or the EU.


Civil unrest (Issue #7): Ongoing events in Thailand (page 18) and Ukraine (Issue #9) highlight the vulnerability of a range of economies to civil unrest.


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