Wine, turkey, pudding and countless cakes later, safe to say this is the toughest article of the year, not merely because of the quiet market activity leading up to the New Year but due to the blood flow concentration my stomach requires following the Christmas festivities.

With little activity in financial markets in the final week of 2016, reminiscing on the current year seems to be trending before turning the page and facing what 2017 has to bring.

Faced with an over-supply crisis, the oil market in 2016 brought together Opec and non-Opec members in reaching a production agreement to curb oil production, as the lifting of Iran’s trade embargo by the West in January added supply to a fragile market already trying to cope with overproduction.

The Russian Ruble was a major winner this year and even more so was the Micex Russian index which year-to-date returned ca. 24% as many Russian corporations operate in the energy space, greatly affected by persistently low oil prices since the supply glut began in 2014.

In the financial sector, the year ends with Banco Monte Dei Paschi di Siena (MPS) in Italy facing a government bailout of over 8 billion euros. The bank, one of Italy’s oldest financial institutions is considered ‘too big to fail’, as its impact on the broader Italian economy would be catastrophic to say the least, given the country’s fragile political and economic environment. The nationalisation of MPS would most certainly come at the detriment of junior subordinated bond holders, who would participate in the burden sharing of the amount of losses being faced by the Italian bank, whose liquidity situation has deteriorated sharply since late November, exceeding initial forecasts.

The New Year will require political cohesion in the form of reform approvals, if Italy is to emerge successful in overcoming the Non-performing loans crisis affecting the majority of its financial sector. The core European nations have optimistic views for the New Year, with consumer confidence in Germany, for one, higher on expectations of higher future income, as real wages, employment and moderate inflation continue to improve, supported by persistently low borrowing costs.

The UK on the other hand has bleaker forecasts for the New Year. The current account has widened over recent months and despite improvements in the last quarter of the year, weaker trade and lower investment inflows paint a less optimistic 2017 picture. The uncertainty around the triggering of article 50 following the Brexit vote earlier this year is certain to add volatility to an already fragile economic environment.

US consumer confidence seems to be the highest heading into the New Year. Donald Trump’s election and reform proposals are being perceived favorably by investors in an economy already benefitting from increased home sales and housing starts. The Federal Reserve will hope GDP growth does improve under Donald Trump and that economic data, notably out of the labour market, remains supportive to justify the three rate hikes the Fed plans to carry out in 2017.

2017 should bring improved consumer confidence, although the rich political agenda worldwide promises to be the leading risk factor affecting global growth. We will wait and see what the first few months of 2017 have to bring.

Until then … Happy New Year!