No Body. No Bio. First of all, I am personally inclined to think ten-year US bonds would be a safe play in 2016 in contrary to most professionals' collective opinion that the expectation in yields to rise would bring down bond price, while the best place to put one's money would be the US equities market. Partially I agree, to the extend there is going to be a continued and heightened merger-mania and buyback programs for tax purposes and so, buying large US pharmaceutical and cable companies would be the way to go. However, US bonds have its merits in 2016 as I shall elaborate below. 2016 is going to be an interesting year. There are three different highly probable scenarios and I wonder which is going to play out. Scenario 1: Assuming oil is a critical variable. According to James Conca, Saudi Arabia can bear to sell at $15/barrel without going bankrupt. As the US tries to break from the oil addiction, it is only natural for Saudi Arabia to lower the prices to force the US oil producers to bankruptcy. Saudi Arabia – $21/bbl Middle East – $24/bbl North Dakota – $40/bbl (http://www.forbes.com/sites/jamesconca/2015/07/22/u-s-winning-oil-war-against-saudi-arabia/) From the above figure, this is a war lost, except the US congress lifted America's 40-year-old ban on oil exports in presumably an attempt to save domestic oil industry. An unattended consequence would be, the Fed would not be as free as otherwise to bring up the rate in 2016 as that would upset the bond market in which oil producers have a large percentage of financing. Some argue that even when US oil producers' hedging contracts continue to expire into the end of 2016, the US wells will still be there, the fracking technology and infrastructure will still be there, large US energy firms will mop them up on the cheap. The objective of the Saudi Arabia will be achieved regardless whether the latter happens. Oil price's implication on US bond yield will ultimately affect Chinese yuan, as the Fed will be reluctant to raise the rates and when does, raises it slowly, People's Bank of China will lower its interest rates and possibly reserve ratio. If PBC does it too mildly, it would not be able to save its metal and real estate industries- its bond market would unavoidably be in dire shape, if PBC does it too much, yuan would devalue enough to boost export however a large outflow of capital would be encouraged. Perhaps, as the old Chinese idiom goes, "bitter medicine is good", the best for the long-term Chinese economy would be fore Beijing to stop its intervene in the currency market and let Yuan fall to 7 to 1 USD and further free up the financial market for foreign sovereign fund to come in and buy up inefficient firms on the cheap. Beijing is not Icelandic government, the latter of the scenario could hardly happen, what is more likely to play out is PBC doing the Fed's job of slowing and mildly lowering Chinese rates indirectly raising the US rates, while at the same time trying to boost its export to "One Road, One Belt" partners to solve the excessive domestic production and guide Chinese economy into a soft landing. China's Asian partners would all have to depreciate their currencies to remain competitive in export. ECB would have to increase its quantitative easing too. Japanese and European stocks would both rise in this scenario, though without sustainability. Art collectibles and Swiss Franc would be a haven in this scenario. Scenario 2: Assuming critical variable to be US politics.The US wins the oil war, oil price rises, US inflation rate rises and the Fed raises rates at a faster pace, resulting in capital inflow from the rest of the world. EM markets would crash. Chinese export to the US would improve however, capital would be more expensive as supply of loanable funds would drop after capital outflow to seek attractive US assets. 200B flew out of Chinese market via illegal channels in August alone, it is not too unreasonable to expect 1-1.5 trillion to leave the Chinese market and the effects would be negative if not devastating when local governments struggle to issue bonds. There will be a flood of Chinese companies filing for bankruptcy. Beijing would ultimately give more freedom to its bond market, without sound legal system supporting market regulation, ahead of Beijing's plan. Neither Japanese nor European market would be a haven in this scenario. Art collectibles and American dollars would be, and very likely Norwegian Krone too, Norway producing oil at $40 bbl being one of a few reasons the currency would do less badly than others in this scenario. Scenario 3 Assuming Chinese economy to be the most critical variable, that is to say, US raises its rates most mildly and less frequently than most expect and ECB does not do another round of quantitative easing. But Euro to Norwegian Krone has fallen from roughly 1.35 to 1.05... Norwegian Krone would be too expensive in the scenario that oil does not drop further and ECB holds its monetary polices unchanged. Only should oil drop below $28 bbl would it be a good play to long Norwegian Krone and short Euro. According to IMF, the estimated oil price for Norway to balance its 2015 is $40 and that would partly explain Krone's current strength.