​SAXO Enlist Its Wild Prophecies That Come True

Saxo Bank examined its archives to see which previous Outrageous Predictions were much more accurate than expected.

“All significant market changes are fueled by something that outperforms expectations - sometimes spectacularly.” “The core of our annual Outrageous Predictions is crystal gazing with this in mind, as we try to suggest what events that seem unlikely right now could unfold and cause outrage in our world and financial markets - and provoke you to think differently along the way,” says John J. Hardy, Head of FX strategy at Saxo.

“Our Outrageous Predictions are not our baseline predictions for what will occur in the New Year.” “Rather, they are intended to provoke contemplation on what unexpected circumstances may jolt our globe and financial markets,” adds Hardy.

Outlandish Prediction for 2013: Gold will correct to USD 1,200 per ounce

“At the time of writing, our $1,200 prediction suggested a one-third reduction in the price,” says Ole S. Hansen, Head of Commodity Strategy, who made the first right Outrageous Prediction in 2013.

Here's what he said about it: “Gold fell below USD 1,200 per ounce in 2013, as investors shifted their focus to equities and the currency as central banks backed a post-GFC rebound in global GDP.” “A crucial trigger was the April 2013 break below important support at $1,525 - a move that heightened the probability of a bear market sending the price down below $1,100 in our opinion,” Hansen adds.

Outlandish Prediction for 2015: Brexit in 2017

Saxo's Strats predicted that the UK Independence Party (UKIP) will receive 25% of the national vote in Britain's general election on 7 May 2015, making them the third biggest party in parliament. UKIP would then form a coalition government with David Cameron's Conservatives and campaign for the scheduled referendum on Britain's EU membership in 2017. The yield on UK government debt has risen dramatically.

The time was somewhat wrong, but the circumstances were very correct. “We had a very strong feeling that 'protest votes' would be coming, both in the US election and, eventually, in a Brexit vote,” said Steen Jakobsen, CIO at Saxo. “To some degree, we were accurate in talking about the social compact being broken,' which meant that monetary policy no longer benefited society as a whole, generating an expanded disparity in equity.”

“This was a premature call, but the context and logic were dead on.” The Tory Party division could not be mended, and the tactic of 'talking down to the people was a glaring error that we adopted for this call.

Outrageous Prediction for 2017: Huge Gains for Bitcoin as Cryptocurrencies Rise

As cryptocurrencies, notably Bitcoin, gained popularity in the public eye, Saxo's Strats anticipated that the then-leading currency would see a significant increase in value. The basis for the hike was the Trump regime's excessive spending, which caused the high national debt to climb and inflation to explode. When this is combined with the worldwide public's desire to move away from the currencies of central banks, Bitcoin will emerge as a preferable option. The Outrageous Prediction came true and then some, with the price of Bitcoin reaching almost USD 20K at its peak in 2017.

However, the circumstances behind the forecast were not exactly accurate at the time. The speculation around Bitcoin, rather than the macroeconomic moves of the Trump period, propelled Bitcoin's early spectacular climb. However, when considering current cryptocurrency price increases, notably Bitcoin in 2021, the arguments provided in the 2017 Outrageous Prediction remained true.

2018 Outrageous Prediction: Stock market volatility surges following a flash collapse

“We didn't receive a 25% loss in a single 1987-like event,” says Peter Garnry, Head of Equity Strategy.

“We got the idea regarding this Outrageous Prediction in late 2017 when the year was about to conclude with astoundingly little volatility and Bitcoin had gone from just around $1,000 in late 2016 to approximately $10,000 in November 2017 (Bitcoin finally went to over $20,000 before year's end),” he says. Everyone was speculating on Bitcoin, and selling volatility in currencies and stocks was lauded as easy predictable money. That's when we got the incredibly unpleasant impression that the whole exhilaration and these sorts of situations may have devastating consequences if circumstances changed even slightly.

The plan to phase out fossil fuels in 2022 receives a reprieve.

According to Ole S. Hansen, Head of Commodity Strategy, politicians will postpone climate objectives and boost fossil fuel investment to combat inflation and the danger of civil unrest while reconsidering the way to a low-carbon future.

“Lack of investment and a rising need to favor gas over coal prompted us to develop the 'The plan to eliminate fossil fuels receives a rain check,' which essentially imagined a more investor-friendly climate for (until then) stigmatized investment in so-called 'dirty energy production.” “It was a step that reinforced the EU's decision to categorize gas and nuclear as green investments,” he adds.

Not all of Saxo Strats' forecasts come true, but they are always outlandish. If you want to see what Saxo thinks about 2023, be sure to come back on December 6, 2022.

You can find more of Saxo News here: https://www.wikifx.com/en/dealer/0001734976.html

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