For several years now, Saxo Bank traders have surprised the world with their non-standard forecasts, which they publish in December of each year. Their humor is that they in their essence seem absurd (for that matter, calculation), but they have sufficiently weighty rationales. Moreover, the argument is so strong that some of these predictions turn out to be true. Most traders are accustomed to thinking in a standard way, based on classic factors. But the forecasts of Saxo Bank are so cardinal that they seem fantastic. And they are popular because there is some truth in them.
What happened in 2017: Saxo Bank forecasts last year
- The forecast for Brexit has not yet been realized, but it’s too early to cross it. According to the forecasts of Saxo Bank, the EU should have made concessions on the migration issue and the exit of the UK would have been canceled. In practice, while we see a clear delay in the negotiation process. And it is quite possible that it will not really happen.
- The Shanghai Composite will add 55% and rise to 5000 points. Prospects for the index were quite good, but spoiled everything May. Recover after a drawdown, the index completely failed and collapsed again in December 2017. The total increase for the year was less than 10%;
- The collapse of copper due to the fact that demand for metal from China will fall on the metal and Trump’s policy on industrial development will not bring results. The forecast of Saxo Bank was not fully justified – the trend has a clearly upward trend, and Trump’s policy, on the contrary, raised the stock market to historic highs.
- The growing popularity of cryptocurrency due to the replacement of the US dollar, which is waiting for problems due to the growing national debt. Saxo Bank forecast was justified, but only due to the fact that traders decided to capitalize on speculation. The growth of quotations by 100-3000% looks like a bubble and cryptocurrencies will collapse rather than the dollar becomes cheaper.
- Italian banks are 100% more expensive. Another unfulfilled forecast, but having a background for the future. A year ago, Italian banks with more than 30% of distressed assets (non-performing debts) were considered a time bomb. And the ECB has preferred to distance itself from the problem, abandoning recapitalization. According to Saxo Bank, recapitalization should have helped banks survive, which would lead to an increase in stocks. In fact, nothing happened: neither recapitalization, nor high-profile bankruptcies. And this suggests that banks will get out of the forces of shareholders, and the growth of their securities is still ahead.
Major SaxoBank forecasts for 2018:
- The Fed will lose independence by transferring responsibility to the Ministry of Finance. The US economy is not growing at the desired pace, but the government debt is growing. However, the probability of an event is small;
- China will switch to Nefteyuani, after which the USD exchange rate to the yuan will fall;
- US stock market drawdowns of 25% or more. The fact that the stock market has bubbled up has been talked about for a long time, but still not enough to lose more than a quarter of the cost. Recession by analogy with 1987 with the current growth of the economy is impossible;
- Europe is facing geopolitical conflicts, due to which the euro will fall in price against the US dollar. A start in the form of Catalonia has already been made, the UK’s withdrawal from the EU will aggravate the situation;
- Bitcoin will rise in price to 60 thousand dollars. US capitalization will rise to 1 trillion, after which there will be a collapse to its cost of $ 1,000. United States;
- rand (South Africa) will grow by 30% against the dollar amid military conflicts in Africa and against the background of the emergence of South Africa as an economic center;
- Tencent will overtake Apple. Shares of the Chinese technology company grew by 120% in 2017 and will overtake many American competitors in the future.
Like previous forecasts of Saxo Bank, it is difficult to believe in the “black swans” of 2018.