What to Consider in 2021 Global Financial Markets?


While the year is not over yet, everyone looks at what lies ahead. But how to better prepare for the next year’s trading opportunities without looking back at the events that marked 2020?

So many things happened that it is impossible to discuss them all in this article. Instead, let’s have a look at what influenced financial markets in 2020 and can also have a say in what the markets will do in 2021.

COVID-19 Pandemic

Unfortunately, 2020 will be a year remembered for the coronavirus pandemic and everything that it brought with it. Caught completely by surprise, the world reacted with a lag. Lives were lost, and industries were disrupted. Small businesses were affected the most, with many closing their doors indefinitely.

Governments and central banks reacted the only way they knew – by printing money and offering loans to incredibly low interest rates. Brave wannabe entrepreneurs took a chance in the hope that 2021 and beyond will be better.

Hope does exist. Vaccines are rolled out all over the world. Studies show that the efficacy of the many vaccines that already exist is enough to stop the pandemic in the second half of 2021.

What to Consider in 2021 Global Financial Markets?

2020 Financial Events to Impact 2021

For financial markets, 2020 brought some incredible developments. First, it brought the fastest dive from a bull to a bear market in history. By definition, when the stock market corrects more than 20% from the highs, it reaches a bear market – in March 2020, the drop came so fast as never before.

Second, the price of oil settled into negative territory. For the first time in history, investors learned that the price of a commodity could settle for negative values. Basically, producers paid for someone to come and take the oil off their hands as no storage facilities existed anymore.

Third, the global negative-yielding debt surged close to $20 trillion. As the chart above shows, the trend stalled somehow during 2015 and 2017 but closed the year at record highs. Debt with negative yields show investors willing to lend money to an entity (e.g., sovereign, corporation) that pays them back less than the original amount invested.

Fourth, Brexit came to an end a few days ago. The United Kingdom and the European Union reached a trade deal that was responsible for much of the price action swings in the GBP pairs for the entire year. Starting with January 1st, 2021, trade between the two takes a new dimension. It is hard to envision now the benefit of Brexit for both the United Kingdom and the European Union. Perhaps it will become obvious somewhere in the future, perhaps not – but at this point, Europe looks weak.

Finally, the United States prepares for a new administration at the White House. It brings new air after four years of controversial policies run by Trump’s administration. It also brings a new head of the Treasury, none other than the former chairwoman – Janet Yellen.

If and when the pandemic ends, the world’s economies have a long way to full recovery. The events mentioned above left deep wounds that cannot heal easily.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Financial Market News

Weekly Market Wrap With Gary Thomson: Inflation, EUR/USD, S&P 500, OIL US Government Shutdown: Assessing Economic Impact and Recession Risks Inflation Still Dogs the Economy: What Are the Central Banks Doing About It? Economic calendar: NASDAQ 100 May Keep Falling, High Volatility in Oil Markets, Potential Appreciation of the US Dollar Financial Markets Waking Up after a Turbulent Week: Important News

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: Inflation, EUR/USD, S&P 500, OIL

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. Inflation Still Dogs the

Forex Analysis

Market Analysis: Dollar Falls from 10-month High

EUR/USDThe euro rose on Thursday as the dollar retreated since investors remained cautious ahead of key inflation figures due on Friday. Data on Thursday showed the US economy maintained fairly strong growth in Q2, with an unrevised annual rate


US 30 Analysis: Dow Jones Finds Support

September is likely to be the second month in a row that the Dow Jones (US 30) stock market index declined. The last time this happened was... also in September, a year ago. Important economic data was published yesterday: → According

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.