Worst Case Scenario
Angel Merkel is not able to form a new coalition government, she calls new elections. The extreme right (ADF) win over 20% of the votes, Angela resignation put Germany and Europe in chaos.
95% participation in next Sunday Catalonia referendum. The Catalonia government force Madrid to sit at a table to discuss Catalonia succession from Spain. Basque Countries call for their own Independency Referendum. Spain and Europe in chaos.
French Unions block with violence the Labour Reform of Macron Government. Macron starts to fell weak and the expected French reform will never happen.
Trump is not able to pass the Tax Reform. The expected fiscal stimulus associated with the reform will not materialise, consumer and companies reduce their critical pre-Christmas spending. S&P and Nasdaq declined by 15% in the next 3 months.
The central bank of England increase interest rate by 0.25% in the next November meeting. The decision create panic in mortgage holders and credit card borrowers that reduce the Christmas spending.
Best Case Scenario
CDU, FD and Green form a coalition by the first week of October. German companies and consumer feel confident on the political landscape and start to invest and spend money. 1m of refugees are integrated and trained to become the growth engine of German industrial powerhouse. Euro grow 10% vs. Pound and Dollar by the end of 2017.
Catalonia participation in the referendum is weak (less than 50%). This is the end of the road for the dream of Independence.
Trump is able to pass both Healthcare and Tax Reform. Yellen keep the interest rate stable. Consumer and companies are cheerful. S&P to grow by 10% in the next 3 months.
Bank of England keep interest at the current level.
Macron is able to stuck a deal with the French Union and pass the Labour reform. French Union are acting responsible (ok maybe this is more Improbable Case than Best Case……)
Most Probable Outcome
US Tax reform pass. Trump is jubilant, the market cheerful, S&P close at record level in December 2017.
US Healthcare reform is not passed. Democratic party is jubilant, Obama re-appear in public (really where is him??).
After several challenge, CDU, FD and Green form a coalition by the end of November. Angela Merkel is weakened, the financial markets feel it, the uncertainly raise, the Euro fell by 5.0% vs. Euro and USD by the end of the year
Catalonia have a 75% turnaround at the Sunday polls. Madrid Central government declare the Referendum unsuccessful but is happy to sit at a table with the Catalonia government to discuss more political and economic authority for the Region. No impact on Spanish growth, expected at 3% for both Q42017 and 2018.
Macron changes some articles of the Labour Reforms (hopefully not the most relevant one), the Union declare victory.
The UK retails data of October are bad, the England Central Bank decide to keep the current interest rate but warn that a rise is almost certain in the 1Q2018.