Surprises Abound: Geopolitics and Economy on Edge

The year has been filled with unexpected surprises that have shaken market expectations. The trade war between the US and other countries has had its share of twists and turns, while the US-Israeli attack on Iran was another major shocker.

However, despite these surprises, investors may be overlooking several key areas where more surprises are likely to occur in the coming months. One such area is geopolitics, specifically the relationship between China and the US.

The current phase of both sides seeking to avoid an escalation in disputes will probably continue for some time, but this could lead to dangerous military gambits by both sides in the near term, causing oil prices to spike. In fact, the escalating war between Russia and Ukraine is already affecting global energy markets, with exports of vital grains like wheat from the region expected to be reduced.

In other areas, there may be mild upside surprises in economic performance in countries such as China, India, and Thailand. China's property market is showing early signs of a possible turnaround, while bad debts are being gradually addressed. In India, private sector capital spending may be turning around, and Prime Minister Narendra Modi could move more quickly on the reform agenda.