Michael Collins, investment commentator at Fidelity Worldwide Investment, believes that Angela Merkel's political fortune is just one of the political and economic developments that could upend the core presumptions that investors are making as 2016 begins.
In an article posted on Morningstar Australia, he noted that the consensus is that Europe will keep muddling through its crisis intact and that, as tempting as it might be to leave, the U.K. will stay in the EU.
Other conventional views are that the U.S. economy can withstand higher interest rates and that the Federal Reserve won't raise the U.S. cash rate by too much too soon.
Other widely held opinions are that inflation will stay tame, centrist politicians will win elections in key advanced countries, especially the U.S., that independence movements in advanced countries will go nowhere and that China's economy will muddle through.
To be sure, the consensus views may prove largely true. Merkel, for instance, faces no obvious challenger, her party is still ahead in the polls and, to diffuse the refugee issue, she's promised to reduce the immigrant intake. So why worry?
It's true too that it's unforeseeable--even incomprehensible--events that often cause the most problems anyway. Just think of the consequences of political turmoil in China, a cyber-attack freezing global finance or Isis taking control of major oil fields in the Middle East.
And there could even be nice surprises. U.S. consumers are happy with the unpredicted plunge in oil prices and their better mood is good for the world economy.
But most of the time the biggest concerns aren't shocks. They were already well underway. There are plenty of developments already in train that could prove watersheds for the world economy and global markets.
Even if just one of them happens, other widely held assumptions could be in jeopardy.
