While market liquidity typically diminishes in December as year-end approaches, Sinead Colton of Mellon Capital thinks the final weeks of the year could prove interesting.

“The next 12 months is particularly interesting because while elections are usually the [market] drivers, we’ve got a number of elements that are more politically driven that are outside the election process,” Colton told ThinkAdvisor.

Colton is managing director and head of investment strategy at Mellon Capital, one of the largest boutiques within the Bank of New York Mellon stable. Mellon Capital had about $340 billion in assets under management at the end of September.

At Mellon Capital, Colton develops multi-asset solutions designed to provide attractive return outcomes within a clearly articulated risk framework.

During a recent visit to ThinkAdvisor’s offices, Colton outlined several events in December and into the coming year that advisors should be aware of as potential market-movers.

Dec. 4: Italian referendum vote.

On Dec. 4, Italians will vote on a referendum to reform Italy’s constitution. The proposed constitutional changes aim to curb the power of Italy’s Senate and strengthen the power of its prime minister, by reducing the number of senators to 100 from 315, of which five will be appointed by the president and 95 will be appointed by regional bodies.

“The indications from the polls – to the extent that we still look at polls – are that the no vote is going to win,” Colton told ThinkAdvisor. Adding, “that’s the first thing to watch. It maybe isn’t going to generate as much uncertainty as was initially thought, given that the polls are indicating a no vote, given what we saw in the UK [and given] what we’ve seen in the U.S.”

Italy’s prime minister, Matteo Renzi, has said that he would resign if there was a no vote, although Colton said that “rhetoric been toned down a little bit.”

“It is not necessarily clear that Renzi will step down if there is a no vote. It would be entirely feasible for him to take the view that having continuity in a time of uncertainty is more important for the economy,” Colton said.

If he were to resign, the party that would likely gain support in a subsequent election is Italy’s anti-establishment Five Star Movement.

And because of this, it’s been speculated that a no vote could lead to Italy’s exit from the European Union. Because Italy is a “much larger country in terms of EU membership,” discussions of an Italy exit could “become much more disruptive,” Colton said.

Dec. 5-8: U.K. Supreme Court hears Article 50 appeal

Starting on Dec. 5, the U.K. Supreme Court will hear the government’s appeal against the High Court’s ruling that Parliament must have the final say on when Article 50 of the Lisbon Treaty can be triggered, formally beginning Brexit negotiations.

“It’s interesting because [Prime Minister] Theresa May has wanted to press ahead without Parliament having a view. Many of the MPs are — at least at an individual level — less positive on Brexit,” Colton said.

Colton called this a “very notable decision.”

“It’s going to govern how quickly the timetable for Brexit can move ahead and indeed perhaps some of the decisions around how much of a hard Brexit there will be,” she added.

Colton said U.K. growth is being marked down “quite significantly” on the assumption that it’s going to be a hard Brexit.

“We have seen a recovery in recent weeks in part due to the outcome of this court case … If you were to see that decision overturned, I would anticipate you’re going to see sterling fall back to $1.21, $1.20, that kind of level,” Colton said.

Dec. 8: European Central Bank’s monetary policy meeting

On Dec. 8, the Governing Council of the ECB has its monetary policy meeting in Frankfurt.

Following the meeting in December, ECB President Mario Draghi is widely expected to announce an extension to the ECB’s quantitative easing program, which is scheduled to expire in March.

“It’s anticipated you’re going to see an expansion of the QE program,” Colton said.

In October, Draghi confirmed that the monthly asset purchases of €80 billion are intended to run until the end of March – or beyond, if necessary.

Colton does not think tapering will be discussed at the December meeting, but rather “much farther down the track.” Draghi also said in an October press conference that the ECB had not discussed “tapering or the intended horizon … of our asset purchase programme.”

“Given that the program is due to end in March 2017, and given where the EU economy is at present, it doesn’t make sense to us that they would start to taper at this point,” Colton said. “It’s much more likely that you’re going to see an extension of the program.”

Dec. 9-16: Congress’ continuing budget resolution expires and Congress adjourns

At the end of September, Congress passed a short-term spending bill that would keep the government running through early December. This continuing budget resolution expires on Dec. 9. Congress has a short timeframe to pass another continuing resolution as it is scheduled to adjourn on Dec. 16.

In a mid-November press release, the House of Representatives Committee on Appropriations said it would “begin working immediately” on a continuing resolution at the current rate of funding to extend the operations of the government through March 31.

Dec. 13-14: FOMC meeting

The Federal Open Market Committee will hold its final meeting of the year on Dec. 13-14, where it is highly anticipated that Federal Reserve officials will raise rates.

“Markets are pretty much fully pricing in a 25-basis-point rate hike,” Colton said. “…the certainty around the Fed rate hike has definitely increased.”

According to the minutes from the FOMC’s November meeting, most participants expressed a view that it could be appropriate to raise the target range for the federal funds rate “relatively soon.”

“Some participants noted that recent committee communications were consistent with an increase in the target range for the federal funds rate in the near term or argued that to preserve credibility, such an increase should occur at the next meeting,” the minutes stated. Jan. 20: President-elect Donald Trump’s inauguration

Trump’s inauguration as president will provide more information for market participants to digest.

The indications are that there’s going to be a lot of activity in the first 100 days, Colton said. The U.S. could potentially see tax cuts, mooted infrastructure programs, and clarity around immigration and trade policy.

“Trade policy is one of the few areas where the president can take action directly as opposed to having to go through Congress,” Colton said. “It would seem pretty clear at this point that the U.S. will not be proceeding with [the Trans-Pacific Partnership].”

Some of the statements Trump made during the campaign about renegotiating the The North American Free Trade Agreement could also be on the table.

“And you’ve certainly seen a strong reaction in the Mexican peso and also the Canadian dollar,” Colton said.

March 16: U.S. federal debt limit reinstated

The federal debt limit, which was suspended by Congress and the president in November 2015, is set to be reinstated on March 16. At that time, the debt limit, which caps the amount of money the Treasury Department can borrow to pay for federal obligations, will come back into effect at about $20.1 trillion, according to new projections from the Bipartisan Policy Center’s Economic Policy Project.

BPC’s projections also show that the use of available extraordinary measures would allow the federal government to continue meeting all of its obligations until at least midsummer 2017.

End of March: UK potentially begins the process of leaving the EU

The end of March was the deadline that May gave for triggering Article 50 of the Lisbon Treaty for the UK to begin the process of leaving the EU.

“That is a two-year process, so if she does indeed stick to that timetable, then potentially the UK will be exiting the EU by the end of March 2019,” Colton told ThinkAdvisor.

April-May: France’s national elections

The two-step election in France is scheduled for April 23 and May 7.

On Thursday, President Francois Hollande announced that he would not run for a second term in the presidential election. The Socialist Party will now select its candidate in primaries in January.

Earlier this week, Francois Fillon won the center-right Republican party’s nomination for president in a primary. Marine Le Pen, leader of the far-right National Front party, is the third frontrunner in France’s upcoming presidential race.

August-October: Germany’s federal elections

A date has yet to be set for Germany’s federal elections, but it is expected to take place between August and October. Chancellor Angela Merkel announced recently that she would seek a fourth term. Merkel has served 11 years as chancellor.

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