A look back: How did we see 2016 unraveling when it started?

It's that time of the year and time for me to go back and review my thoughts (ex-post) on 2016. Attached is a piece I wrote in January 2016 (2016 (continue to) expect the unexpected) about what unconventional things financial markets might have held for us in 2016.

All in all out of the 5 major points I made; 4 seem to have been relevant (at various degrees):

1) In 2016 we did end up hearing a lot about QE and definitely saw more of what was considered to be unorthodox measures become more mainstream: the ECB extended its asset purchase to include many types of securities other than sovereign bonds (asset-backed, corporates, etc.) and Bank of Japan went as far as come up with a new approach by purchasing bonds to target a specific rate at a specific points of the curve (near zero for 10 year rates),

2) The US dollar continued its secular rally (and there is a high probability for it to continue, more on this in my thoughts on 2017),

3) Though the Cyber security risk materialized, it was in a shape and form I (and many others) did not expect, with the hacking of DNC and Ms. Clinton emails and alleged effects on US elections,

4) Crude oil did the unexpected - a 85% rally - and the futures curve was (once again) not a good indicator of the actual future level of oil (was pointing to an oil price at $35 for December 2016 while it is trading at $52),

5) However, I did underestimate the ability of the oil patch to heal and mend its balance sheet.

I will be summarizing my thoughts for 2017 and share them soon.

(Some of my personal thoughts on 2017 - not those of PMAM - are reflected in my last post Of Trumponomics and markets)