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All goes according to plan. Saxo Bank introduced the "outrageous predictions" for the year 2020
Material posted: Publication date: 03-12-2019
"Outrageous predictions" from Saxo Bank touch unlikely and underestimated event, which, however, the financial markets may cover "a very powerful shock wave". In 2020, the world Bank researchers threaten an exit of Hungary from the EU, the loss of Central banks and governments control over the situation in the world, the new pan-Asian currency and losing elections Donald trump. But Russia will benefit from higher prices for oil to $90 per barrel and global interest in green energy.

When publishing its 'outrageous predictions' Saxo Bank every time emphasizes that they are not official forecasts of the Bank to investors and other market participants. But the Bank does not exclude that "many investors make the mistake of estimating the probability of occurrence of the events is negligibly small". "This is an attempt to explore the limits of the possible, though not always probable. Of course, the most destructive (and thus shocking) events of the most unexpected"— like Saxo Bank.

The leading theme of 'outrageous predictions' for next year Saxo Bank marked "undermining the foundations".

"The current state of Affairs will inevitably change. Not because we want to, but simply because a continuation of the trends of the last decade has plunged the society would be at war with himself: the markets would have been replaced by governments, monopolies would be the only business model, and public debate is extremely polarized, fragmented and completely biased..." said Bank chief economist Steen Jakobsen.

Saxo Bank does not exclude that the ECB could make a sharp turn and abandon the policy of ultra-low rates. In connection with the difficult situation faced by European banks for low rates, and more regulation under the rules "Basel IV" a new President of the ECB, Christine Lagarde, at the beginning of the year will be announced that the monetary policy has exhausted its possibilities. It will indicate that long-term preservation of negative interest rates on deposits can seriously damage the banking sector of Europe. To force Eurozone governments, particularly Germany, to advance to the fiscal stimulus, the ECB will deploy its monetary stance, bringing the discount rate to zero, and by the end of the year, even in small plus.

In the political sphere of Europe expect no less radical event.

Saxo Bank does not exclude the exit from the EU of Hungary, which is already in conflict with the European Commission.

The EU has launched against Hungary the procedure under article 7 of the Union Treaty, referring to the newly constructed increasingly severe restrictions on the freedom and independence of the press, courts, science, minorities and human rights defenders. The Hungarian leadership says that the country is only defending itself — first of all their culture from mass immigration. This situation is unstable, and in 2020, as the slow progress of procedures under article 7 through the bureaucratic system of the EU, will become even harder to negotiate. Prime Minister Viktor Orban will start to speak openly about the "blood brotherhood," with Turkey as opposed to the rest of Europe, and this abrupt change in tone coincides with the minimizing of the European tranches in the next two years.

In the markets of Asia can also turn around the dramatic events. New Asian reserve currency backed Asian infrastructure investment Bank (AIIB), will reduce the dollar by 20%, and relative to gold will bring down the dollar by 30%. Due to a deepening trade conflict and vulnerability to threats to the United States will make the dollar (and control over the world's finances) in weapons, the AIIB will create a new reserve asset called "Asian drawing rights" — Asian Drawing Right, or ADR, one ADR is equal to two US dollars, making it the world's largest currency unit. This step will obviously be aimed at eliminating the U.S. dollar in regional trade. The local economy will enter into a multilateral agreement on the transfer of all trade in the region, only ADR.

Major oil exporters — Russia and OPEC — would be to the agreement, aware of its growing dependence on the Asian market. Pregenancy a significant share of international trade from the U.S. dollar to another currency will leave US even less money you need to Finance both the deficits — both trade and budget. Just a few months the USD weakening by 20% relative to ADR and 30% against gold, so the spot price of the latest in 2020, will significantly exceed $2000.

The change in the balance of forces will not be able to pass US. Despite a possible truce in a trade war between China and the United States, the American economy will begin to suffocate, and the trade deficit with China will improve as China will no longer be able to increase the volume of purchases of agricultural products. Seeing these polls, he predicted a crushing defeat in the elections, the US President Donald trump will lose patience, and his administration in a last attempt to intercept a protectionist theme to impose a tax under the slogan "America first". The system of business taxation in the country completely rebuilt in favor of domestic production on the principle of a supposedly "fair and free trade". All existing tariffs will be eliminated, instead they will introduce a flat 25% VAT on all gross revenues in the U.S. market, which is obtained from production abroad. Trading partners will begin hotly to protest against this, in fact, the old duties in a new way, but the administration will argue that foreign companies are free to move production to the United States and avoid tax.

However, Saxo Bank believes that such measures will not help to Donald Trump to get re-elected in 2020.

The last time his victory had ensured older white voters, and their share in the population decreases: the U.S. is now the largest generation are people from 20 to 40 years, much more liberal-minded. And Millennials, and the older part of the "generation Z" become increasingly hostile to injustice and inequality related to the pumping of assets by Central banks, and against climate change. President trump, as a denial of the past, will be the main lightning rod. Left-wing voters will be more because of the aversion to Trump, which is especially expressed by women from the suburbs, and Millennials. The Democrats will receive in the presidential election a margin of more than 20 million votes, strengthen the control of the house of representatives and, although with difficulty, but will capture the Senate.

For Russia in 2020, the researchers Saxo Bank give the most favorable of all the "shocking predictions".

They believe that in 2020, OPEC and Russia seeing a slowdown in the shale oil in the US due to low profitability of investment, will announce a new strong production cuts. Taken by surprise, the oil market will rush to cover short positions, and hedge funds will try to close positions, poorly protected from high prices. Brent crude will return to $90 a barrel. For Russia this is a huge benefit (budget 2019 were balanced based on the price of Urals at $49), the shares of "Rosneft" will soar by 50%.

Russia will be able to benefit from the growing impact of green energy. The increase in long-term interest in electric vehicles and control of transport emissions will lead to the fact that Russia will benefit as the world's largest supplier of palladium, used in cars to improve air quality. In 2019, the palladium was one of the fastest growing commodities. To a new stage in 2020, it will lead to the triumphant arrival of the Democrats in the White house and the tightening of emissions standards in India.

Another direction is the transfer of batteries for electric vehicle with cobalt to Nickel.

Demand for Nickel in 2020 will rise to heaven. Governments in developed countries subsidize sales of electric cars, and major automakers in Germany, starting a full-scale transition to them, will require the reliable supply of batteries. While Indonesia January 2020 would limit the export of Nickel ore to maintain its metallurgy, Russian MMC Norilsk Nickel will enjoy rising demand and prices.

Eugene Tail


Source: https://www.kommersant.ru/doc/4179760


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