These 10 Geopolitical Risks Could Disrupt Markets In 2012

From BusinessInsider: Nomura recently published its Global FX Outlook 2012 report. In it, Senior Political Analyst Alastair Newton lists his top ten geopolitical issues that will drive markets in 2012. And he makes no secret that Eurozone and U.S.
policy decisions will by far be the most significant drivers of 2012. They are:

#4 Pakistani terrorists could attack India : "Security and the economic situation are continuing to deteriorate as the possibility of a terrorist attack in India emanating from Pakistan persists."

#5 Middle East and North Africa - The 'Arab Spring' could disrupt oil production - "While not denying the potential wider impact of events in Egypt and Syria, in particular, market focus will likely remain principally on the implications for the output and price of oil. Recent concern over Israel/Iran notwithstanding, following the US troop withdrawal from Iraq we believe that the biggest threat to production could prove to be in that country….

#3 China is still at risk of an economic hard landing: "Although we see a one-in-three probability of a hard landing commencing before end-2014, we believe that China’s leaders will do everything they can to sustain growth during the handover of power to the fifth generation leadership between October 2012 and March 2013."

#2 United States failure to extend jobless benefits and payroll tax holiday would hurt GDP. It is also at risk of another credit downgrade: "(a) Congress may fail to agree to extend the emergency jobless benefits and the payroll tax holiday, due to expire on 31 December, which could shave up to about 0.8pp off GDP growth in 2012; and (b) Moody’s, following in Standard & Poor’s’ August footsteps, could downgrade the US credit rating if political gridlock persists..

#1 Eurozone could face a euro break-up if Germany and the ECB don't step up: "Markets seemed to see (for the first time since early May 2010) an existential threat to the euro, pushing the sovereign debt crisis into its most dangerous phase yet. We therefore believe that early in 2012 – if not before – the German government and the ECB will have to relent and bring the latter’s balance sheet fully to bear if a euro break-up is to be avoided."

http://www.businessinsider.com/10-geopolitical-risks-affecting-markets-2012-2011-11