If 2016 was the year of the breakthrough, 2017 could see the status-quo fightback, with Europe likely to form the battleground ahead of pivotal elections. And, while next month's general election in The Netherlands may not be the biggest showdown of the year, the outcome could set the tone for 2017.
These questions are not spoken about openly in the fierce pre-election presidential debate raging in France. The question is not politically correct. But in these times of expanding Islamism, they weigh silently in favor of Marine Le Pen.
S&P equity futures followed Asian and European stocks lower, driven by weakness in Franch and Italian markets, as French political concerns returned; the pound tumbled after UK monthly retail sales unexpectedly dropped pushing the dollar higher and Euro lower.
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European and Asian stocks, S&P futures, bond yields, the dollar and commodity metals are rose, in some cases making new all time highs, lifted by the latest reemergence of the "Trump trades" as hopeful investors once again bet that the U.S. president's tax reform plans will boost economic growth and corporate profits, despite another warning from Goldman that the president's fiscal plan is about to be derailed.
S&P futures rose further into record territory, European shares rose to within striking distance of their highest levels in more than a year while bonds fell and the dollar rose as investors cheered a surge in Chinese trade data amid hopes of "phenomenal" tax cuts by Donald Trump, all of which have rekindled the Trumpflation trade.
Asian stocks hit their highest level in 18 months, with positive momentum lifting European shares which were helped by Societe Generale earnings. Yields fell on some of the euro zone's battered low-rated bonds as investors put aside the political risks that have dominated markets this week. After trading flat, S&P futures bounced as US traders walked boosted by a spike in the USDJPY.
The dollar rebounded from a key support level, strengthening against all major peers, pushing S&P futures higher as European shares rose, led by basic resources and real estate, while Asian stocks fall. Gold fell from its highest level since November as demand for some haven assets ebbed while global bonds declined. Oil dipped, pressured by a stronger dollar.