LONDON Dec 22 Oil is set to be 2016's top
market performer, with its near 50 percent gain an outcome few
would have predicted when it plunged to a 12-year low in
In a year of shocks, including Britain's vote to leave the
European Union and Donald Trump's election as U.S. president,
several major assets have been on a rollercoaster.
"(Given) the fragility that markets started the year with
and the events that then happened ... it is pretty remarkable
how resilient things have been," State Street Global Markets
head of macro strategy Michael Metcalfe said.
Crude surged from as low as $27 a barrel to just shy of $58
following two of its worst performing years on record. It
dovetailed with large gains from copper zinc and
tin, and in currencies like Russia's rouble and
Brazil's real which are both up 17 percent.
Many stocks have not done badly for investors.
On Wall Street, the S&P 500 and Dow Jones are
up 12 and 14 percent, respectively, with gains accelerating
after Trump's victory.
Tokyo's Nikkei is 5 percent higher in dollar terms
while a 7 percent gain for emerging market stocks will
end a poor three-year run.
The dollar has risen for a third straight year, with all its
4.5 percent gains against a basket of major currencies
coming since the U.S. election.
The yen is still clinging on to a 2 percent gain
despite a 12 percent plunge since the U.S. election. The euro
is down 4.5 percent.
Brexit-battered sterling had the worst year of the FX
majors. It has lost 16 percent on the dollar and 12
percent against the euro, never recovering from a plunge to a
31-year low the day after the EU vote.
That's less than the Mexican peso's 15 percent drop
and roughly the same as the Turkish lira which has had to
contend with a failed coup attempt, a crackdown on tens of
thousands of officials and a string of bombings.
London's FTSE has boomed since Brexit, up 18 percent
since the June vote, although almost flat on the year.
"Sterling's weakness has been very good for large-cap UK
equities and we expect that relationship to hold," said JP
Morgan Asset Management global market strategist Mike Bell.
"So we could have that slightly bizarre environment whereby
bad news for the UK economy is good news for UK equity market."
Benchmark 10-year U.S. Treasuries are level for
the year but have lost 5 percent since Donald Trump's election
and last week's quarter-point rise in U.S. interest rates.
Other fixed income markets have followed. German Bunds
have lost 6 percent since the U.S. vote, corporate
bonds have fallen 3.5 percent and emerging market dollar and
local currency debt have slid 4.2 and 6.5 percent respectively.
But for the year overall the story looks different. Emerging
market dollar and local debt have both earned investors around 9
percent and high-yield bonds have returned over 14 percent.
Analysts at Goldman Sachs say it is the best year since 2009
and has only been bettered 5 times in the past 30 years.
The clear winners though have been commodities and most
things linked to them.
Thanks to the stellar gains for metals, Europe's mining
firms have soared 60 percent with big names like Anglo
American and Glencore up 280 and 200 percent
Gold is up almost 7 percent despite being one of the
assets hit hardest since the U.S. election. In agriculture
robusta coffee has jumped over 40 percent and sugar
is up over 20 percent.
At the other end of the table has been one of last year's
star performers, Chinese A shares. Tighter regulations
and jitters about the China economy and the yuan have
driven an 18 percent slump in the stocks in dollar terms.
And if you thought it has been a bad year for Britain's
pound, it's been small change compared to Egypt's pound
which is down 60 percent having continued to slide after a 33
percent devaluation in November.
(Editing by Jeremy Gaunt)