In many ways, the early weeks of 2016 can be seen as a kind of microcosm of the preceding year – the headlines have been dominated by a further decline in the Chinese stock market and intervention from the Chinese government, weaknesses in the automotive sector, and the price of oil has continued its game of ‘how low can you go?’.
The outlook for the months ahead is not good, either. The oil price collapse, which some analysts believe could level out at as low as $18 per barrel, will cause further damage to the economies of producer countries. Western stock markets are on high alert for economic data from China, and may take a turn for the worse if the news is unfavourable. With interest rates still at very low levels in most developed economies, policy-makers have fewer tools to ward off a recession.
