Politics is always high up the news agenda and a major factor in how markets move, but rarely to the extent seen in 2016.
The first half of the year was dominated by the issue of Britain’s exit from the European Union, and that is still rumbling on of course. From around August onward however, it has be overshadowed in global terms by the race for the White House, with markets falling or rising in large part according to the perceived chances of a Donald Trump win.
The next date for your political diary is less than a month away; 4 December. Not one but two big votes take place that day.
In Italy, a referendum is being held on prime minister Matteo Renzi’s proposed constitutional reform package. If Renzi were to lose, it would send shockwaves through Europe at a time when it is knee-deep in dealing with Brexit. He would in all likelihood have no option but to resign, with the possibility of a populist, anti EU movement moving in to the power vacuum left behind. Britain has always been seen as somewhat detached from the rest of the EU but the prospect of losing Italy has never seemed possible before this year, so could hit markets hard.
The re-run of Austria’s presidential election also takes place that day, with a distinct chance that far right contender Norbot Hofer will win this time around after his narrow loss was overturned due to voting irregularities. While the implications of this are unclear, it would signal another move away from the centre ground and political consensus for a significant EU member.
A day later on 5 December, the Supreme Court hearing on whether the British government can trigger article 50 without a vote in parliament is expected to begin. While Brexit going through at some stage appears inevitable, the court’s decision could have major impact on the timeline and terms of exit.
We do not have to press too far into 2017 before the next political hurdles to clear come into view. On 15 March the Dutch general election takes place. Geert Wilders' populist, anti EU Freedom Party is tied for the lead with prime minister Mark Rutte’s VVD in recent polls, so a market-friendly outcome is far from guaranteed there.