Saxo Bank Forecasts 20% Growth Of Ruble In 2016


Translated by Ollie Richardson for Fort Russ

16th December, 2015


Saxo Bank, one of the largest Forex brokers in the world, has released its annual, the twelfth, “Shocking forecasts” for the coming year. In the current work of the Bank, experts see a variant with a jump in oil prices to around 100 dollars per barrel and growth of the ruble by 20%. Also, a possible increase of the Euro to 1.23 U.S. dollar and the rise of silver prices by a third.

Democrats in the US would retain the presidency and win Congress in 2016, sales of luxury goods in the world will fall to 50%, and the ocean during El niño will cause a rise in inflation, experts at Saxo Bank  predicted.

However, this is only shocking predictions of events that may not occur. Analysts don’t deny that the probability of their occurrence is small. As noted by chief economist of Saxo Bank Steen Jakobsen, by presenting their scenarios, analysts are trying to predict and identify trends that may cause any “black swans”, as they are called among market participants.

Panic in OPEC will bring the price of oil to $100

Too cheap oil will produce, among the participants of the cartel, doubts about the strategy of “deliver-and-conquer”. Finally,  the long-awaited signs of reducing production in countries outside OPEC will appear.

At a convenient moment the cartel will catch the market off guard by the unexpected production decline. In this case, the price will quickly begin to recover, investors will rush to take long positions on oil and the prices again will come nearer to the psychologically important level 100 dollars per barrel, believes Saxo Bank. By the end of 2016, the growth in oil prices and an unnecessarily slow increase in rates by the fed will allow the Russian currency to strengthen by about 20% against the bi-currency basket (0.45 euros and 0.55 dollars), Saxo Bank also said.

Euro will rise to $1,23

In Europe there is now a huge current account surplus, combined with low inflation. Macroeconomic logic should lead to strengthening and not the weakening of the European currency. Consequently, the Euro may rise to 1.23 to the dollar.

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The “Bottom” for the Euro may already have been achieved, the circle is closed, and this means that now  the time has come again for the depreciation of the dollar in the framework of reactions to expect to maintain a soft policy of the U.S. rates, according to Saxo Bank.

Olympics in Brazil will give impetus to the recovery EAT

Stabilization and investment costs for the Olympics and the moderate reform in Brazil will maintain a positive economic mood in the country and cheap local currencies will contribute to the growth of exports from developing countries.

As a result, the share of emerging markets (EM) prepared a brilliant year and the victory over the bonds and other stock exchanges.

Silver will rise in price by 33%

In 2016, the silver will regain the confidence of investors. The desire of politicians to reduce harmful emissions into the atmosphere by supporting renewable energy supports industrial demand for this metal, which is used to produce solar cells. As a result, the silver price will rise by a third, leaving the rest of the metals, and especially precious, far behind, believes Saxo Bank.

El niño will trigger inflation

Next year in the Pacific, during El niño, will have the most powerful in all history of observations and will lead to a shortage of moisture in many areas of South-East Asia and drought in Australia. Low crop yields will result in a drop in supply on the background of growth of demand in terms of global economic expansion. As a result, the Spot index Bloomberg Agriculture will grow by 40%, providing long-awaited inflationary pressures in the global economy, signalling the global GDP growth, estimated Saxo Bank.

Inequality will laugh at the luxury

Faced with rising inequality and unemployment above 10%, Europe plans to introduce a single basic income, which guarantees all people the ability to meet basic needs. In societies with more egalitarian values, the demand for luxuries will fall dramatically, which will lead to a collapse in the sector. As a result, sales in the sector of “luxury” in the world will be reduced in 2016 by half, according to Saxo Bank.

The Democrats will keep their President in the USA

The cycle of alternation of the Democrats and the Republicans among the presidents of the United States can be broken. The Republicans will be overthrown, because the split in their ranks will grow because of the strife caused by the discussions about the future of the party. This will lead to the victory of the Democrats without a fight thanks to a successful campaign aimed at increasing voter turnout and high activity of Millennials for the past eight years, who are tired of the political stalemate and the lack of jobs. In the end, the Democrats will retain the presidency and win the Congress in 2016, according to Saxo Bank.

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