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While black swans are impossible to predict, Nomura analysts have put nine "grey swans" for 2019 on their radar.
The firm says so-called grey swans, close cousins of black swans, are foreseeable risk events that end up having a much more drastic impact than expected. A few of those in 2018 were the emerging markets currencies retreat, the volatility spike in February and the global equity sell-off.
"None of these are our base case, and instead are more an exercise in forcing us to think outside our usual base scenario-risk modes of thinking," said the team of currency, fixed income and economic analysts at the firm.
There's a low probability that another oil slump may be on the road, due to excessive supply, shifting consumer preferences and environmental considerations, Nomura noted. However it's "plausible" that oil prices drop as low as $20 per barrel in 2019, Nomura said.
Oil prices have a recent history of moving from boom to bust and in ways that oil analysts have not expected, Nomura analysts pointed out in the note. They fell to a 13-year low of around $26 per barrel in January 2016 from $60 per barrel in June 2015 and $100 per barrel in June 2014.
Brent Crude closed around $60 a barrel on Tuesday.
"Currently, there is arguably a big glut in the oil market, partly thanks to rising oil production in the U.S. Less production restraint from Iran of late, combined with lingering tensions between OPEC and Russia supply responses could leave that oil glut larger for longer in the period ahead," they said.
The mini market quakes in 2018 — the emerging markets currencies collapse, trade wars, Brexit and U.S. stock correction — could be precursors for a big one in 2019, Nomura said.
There are three possible market quakes, according to Nomura: a collapse in stock price, a contagious sovereign crisis in Europe and Chinese defaults. They cited U.S. stock valuations, Italian sovereign risk and China's mountain of private debt as the catalysts.
"In such an environment, cash would likely be king, risk markets would underperform and safe-haven currencies such as the yen would do well," the analysts wrote in the note.
"It's easy to paint a picture of a market crisis in 2019, market liquidity conditions worsening with lingering effects of Fed hikes and continued balance reduction, the European Central Bank and Bank of Japan scaling back their quantitative easing measures and China continuing its deleveraging policies," they added.
Populism may have reached its peak in 2018, Nomura noted.
This political approach, made prominent by Chinese President Xi Jinping's corruption crackdown and the centralization of power, has been adopted around the world — by U.S. President Donald Trump, Brexit forces, President Erdogan of Turkey, and President Putin of Russia, Nomura said. But the world might start to realize populists fail to deliver growth, they noted.
"Already we are seeing signs of this. The Republicans have lost control of the House in the US midterms, and stock market weakness appears to have influenced President Trump's trade policy to become more conciliatory," Nomura said.
Other grey swan calls on the Nomura list include an Italian recovery, hyperinflation in the U.S. and a comeback in the Chinese Yuan.