StanChart see eight big risks ahead for 2021 . It is well worth being aware of these risks as we head into 2021. Here are the 8 underpriced risks that may be ahead:

1. Democrat’s win Georgia’s seats to take the US Senate

• Democrat’s start a legislative agenda to raise taxes and change tech regulation.
• Impact: Tech stocks fall and US Treasury yields surge on supply fears. In this scenario watch for a fall in the Nasdaq and key tech stock.

2. US and China find common ground

• China allows its currency to gain in effort to lift purchasing power for companies and consumers.
• Impact: USD/CNY falls to 6.00. The USDCNY pair has been falling hard on a Biden Presidency. This scenario will only accelerate these falls.

3. Monetary and Fiscal stimulus drives strongest recovery in a century

• Eager to capture gains in real assets investors and traders shift increasing amounts to markets like copper.
• Impact: Copper rallies 50%.

4. OPEC splinters

• In order to plug fiscal finances, oil exporters abandon supply quota and OPEC co-operation collapses.
• Impact: Oil to $20 a barrel.

5. European fiscal hopes dashed

• ECB’s ability to support the recovery is called into question with zero policy rates and 100% GDP balance sheet.
• Impact: EURUSD falls to 1.06.

6. US Treasury Secretary abandons strong dollar policy

• Congress fails to agree a fiscal package and Janet Yellen talks down the dollar.
• Impact: dollar down 15%. At the time of writing this outlook seems highly unlikely as a US stimulus bill is said to be ‘close.

7. Emerging market debt defaults

• Corporate debt defaults and then state sponsored entities lead to ratings downgrades.
• Impact : Emerging Market equities fall by 30% in worst year for EM since 2013.

8. US President Biden steps down

• Frustrated at the failure to bridge gap between Republicans and Democrats Biden resigns in favour of Kamala Harris.
• Impact: Sharp correction in U.S equities lower.

So, there we have it. Eight underpriced risks for 2021.