Probably the most anticipated (and entertaining) reads of the 12 months within the FX and CFDs buying and selling world is the annual Saxo Financial institution Outrageous Predictions for the approaching 12 months. Saxo Financial institution’s Outrageous Predictions are the brainchild of Saxo Chief Funding Officer Steen Jakobsen, and are available at the start of December – and right this moment is the day!
Saxo Financial institution calls its annual Outrageous Predictions record a collection of unlikely however underappreciated occasions which, in the event that they had been to happen, would ship shockwaves throughout the monetary markets. Whereas by Saxo’s personal admission its Outrageous Predictions record is supposed to be simply that – outrageous – in addition to provocative and entertaining, Saxo did level out that a few of its earlier predictions over the previous 15 years have certainly to a point come to cross, equivalent to:
- The plan to finish fossil fuels will get a rain verify (OP for 2022)
- Germany enters recession (OP for 2019)
- Volatility spikes after flash crash in inventory markets (OP for 2018)
- Bitcoin triples in worth, from the present $700 degree to $2,100 (OP for 2017)
- Silver breaks golden shackles to rally 33% (OP for 2016)
- UK seen leaning towards 2017 exit from the EU (Brexit) on UKIP election landslide (OP for 2015)
- Brent crude drops to USD 80/barrel as producers fail to reply (OP for 2014)
- Gold corrects to USD 1,200 per ounce (OP for 2013)
- S&P500 falls 25% from its 2007 excessive to 1182 (OP for 2008)
For 2024, Saxo Financial institution has titled its record as “The Finish of the Street” for Complacency. Coming into 2024, Saxo Financial institution sees a world at an inflection level, with the acquainted highway of the final decade coming to an finish. Commenting on this 12 months’s Outrageous Predictions, Steen Jakobsen stated:
“The sleek highway the world has travelled on for the reason that Nice Monetary Disaster, with steady geopolitics, low inflation, and low rates of interest, was disrupted through the pandemic years, indicating a shift in direction of a future full of unpredictability.”
Saxo Financial institution famous that though these predictions usually are not its official market forecasts, they’re a reminder to buyers to contemplate all potential outcomes, together with people who appear far-fetched. Outrageous Predictions are a deliberate effort to push the boundaries of market members’ imaginations and put together them for any eventuality.
And now right here, with out additional ado, is what Copenhagen based mostly Saxo Financial institution has launched for this (actually subsequent) 12 months. Take pleasure in!
Saxo Financial institution’s 2024 Outrageous Predictions
1. With oil at $150, Saudis purchase Champions League franchise
As oil costs soar, Saudi Arabia extends its affect by buying probably the most coveted franchises in sports activities to create a World Champions League: “Saudi Arabia’s radical restructuring of its economic system away from its dependency on oil revenues in direction of changing into a tourism, leisure, and leisure powerhouse, receives an added enhance from a meteoric rise in oil costs, which attain $150 per barrel round mid-year on stronger-than-expected demand. Now holding the keys to the cherished soccer competitors, the Saudis instantly transfer to rework it into a worldwide membership competitors.”
The Manchester United inventory worth doubles and Brent crude goes to $150 per barrel.
2. World hit by main well being disaster as weight problems medication make folks cease exercising
GLP-1 weight problems medication are seen as an answer to the world’s weight problems epidemic, however the ease of taking a tablet makes folks cease exercising and improve their consumption of junk meals: “As provide of GLP-1 weight problems medication is expanded, costs come down and governments select to designate the weight problems medication as important for enhancing well being and stopping the weight problems epidemic… Nevertheless, in a flip of occasions, provide of GLP-1 weight problems medication is unable to fulfill the widespread demand, and sufferers want to attend for years to get their injections. In the meantime, they cease exercising or holding to a nutritious diet now {that a} tablet can preserve weight in verify, fuelling a significant well being disaster. World grownup weight problems charges shoot up from the present 39% to 45% in 2024.
The processed meals business sees a big demand carry, McDonalds and Coca-Cola inventory costs outperform broader markets by 60% every.
3. US heralds the top of capitalism with tax-free authorities bonds
The US adopts a radical fiscal technique to deal with its financial challenges by incentivizing funding in authorities bonds. “The US authorities is compelled to extend fiscal spending exponentially amid the 2024 elections to maintain the economic system going and keep away from social unrest. On account of lingering inflation pressures and overseas buyers repatriating capital, demand for US Treasuries stays sluggish, upsetting a spike in US Treasury yields. In a determined try to normalise borrowing prices, the US authorities makes revenue from authorities bonds tax-free.”
US Treasuries rally throughout all tenors, and the yield curve bull-flattens as buyers can lock within the highest yields in many years with out tax burdens. The inventory market tumbles, however a specific group of cash-rich corporations profit from an inverted yield curve.
4. Generative AI deepfake triggers a nationwide safety disaster
Generative AI, hailed as a productiveness boon, turns into a nationwide safety menace after a daring AI deepfake heist towards a high-ranking official in a developed nation. Governments crack down on AI with new laws, puncturing the AI hype as VCs flee the business:
“In a high-stakes sport, a legal group deploys essentially the most misleading generative AI deepfake the world has ever seen, phishing a high-ranking authorities official handy over top-secret state data from a developed nation. The daring transfer and success set off the most important nationwide safety disaster since WWII, ushering in a brand new period of far-reaching AI regulation. In a historic transfer to take care of the catastrophic unintended effects of generative AI, the US and EU declare that each one content material produced by a generative AI ought to have the label ‘Made by AI’. The generative AI deepfake incident goes from nationwide safety disaster to full-blown public mistrust in data delivered on the Web, as AI-produced content material swells to 90% of all data.”
Conventional media corporations accredited by their governments for disseminating public information soar in worth, with shares in The New York Instances Firm doubling. Adobe shares plunge as authorities penalises the corporate, because the catastrophic deepfake was made utilizing its software program.
5. Deficit international locations kind ‘Rome Membership’ to barter commerce phrases
A coalition of deficit international locations goals to restructure world commerce dynamics of their favour:
“Because the US debt scenario has grow to be uncontrollable, a bunch of six deficit international locations kind a ‘Rome Membership’ to cooperate on lowering deficits by collectively negotiating new world commerce phrases with the excess international locations. The argument goes that resetting the deficits by means of gradual pegged revaluations of the excess international locations would allow a worldwide reset, making a extra equal and steady financial mannequin. The six founding international locations of the ‘Rome Membership’ are the US, UK, India, Brazil, Canada and France. Adjusting the divergence of the present account between the important thing international locations goes to be a painful adjustment for the very best surplus international locations that are China, Germany, Norway, Japan, the Netherlands and Singapore.”
The truth that the world’s reserve forex is spinning uncontrolled reduces religion within the fiat cash system, establishing huge good points for gold, silver, and crypto currencies.
6. Robert F. Kennedy Jr wins the 2024 US presidential election
In a surprising political upset, RFK Jr. captures the presidency, ushering in a brand new political path for america: “In 2024, for the primary time within the historical past of the USA, a third-party candidate, Robert F. Kennedy Jr, wins the US presidential election. His populist platform towards the war-mongering Democrats and towards the company elites resonates with each disgruntled conventional Democratic and Trump supporters. A brand new political period within the USA begins with the dramatic pivot away from plutocracy, as voters demand an finish to drastic inequality and injustice and the top of ceaselessly wars.”
Kennedy’s pro-peace message and promise to finish the abuses of the US healthcare system and break up extra company energy sees protection, drug and healthcare corporations nosedive, and the web and info-tech monopolies commerce nervously on considerations {that a} wider conflict towards monopoly corporations will comply with.
7. Japan’s ‘fortunate 7%’ GDP development charge forces BoJ to desert yield curve management
Japan experiences a stunning financial surge, resulting in a big coverage shift by the Financial institution of Japan. “The deflation period in Japan has ended, bringing wage development again. With a yield curve management coverage in place, the Japanese economic system is over-stimulated as actual charges decline with nominal yields capped however inflation expectations rising. The BoJ is due to this fact compelled to finish its yield curve management coverage in 2024. This causes a rout in world bond markets, as Japanese buyers transfer a reimbursement residence.”
Yen strengthens as Japanese buyers repatriate cash to home property, pushing USDJPY beneath 130, EURJPY beneath 140 and AUDJPY beneath 88.
8. Luxurious plunges as EU goes Robin Hood, introducing wealth tax
The European Union’s new wealth tax results in a downturn within the luxurious market, with main repercussions for high-end manufacturers: “It’s a nice irony that the EU, which is the world’s greatest welfare system, has created 499 USD billionaires who’re paying the bottom quantity of private tax in proportion of wealth in comparison with billionaires from North America and East Asia.
As social unrest in Europe is consistently on the fringe of eruption, and as prices related to the inexperienced transformation, the conflict in Ukraine and common inflation rise, the EU Fee commits to the July 2023 European Residents’ Initiative (ECI) entitled ‘Taxing nice wealth to finance the ecological and social transition’.
The EU Fee implements a legislation that yearly taxes 2% of wealth on billionaires. This contemporary model of Robin Hood sends shockwaves by means of the European luxurious business, as latest research have proven a powerful correlation between the pursuit of luxurious gadgets and ranges of revenue and wealth inequality.”
LVMH shares plunge 40% on the EU Fee’s new wealth tax and different components of the luxurious section together with Porsche and Ferrari see their share worth struggling badly.
