Saxo Bank's 10 Outrageous Predictions for 2015

PR58929

LONDON, Dec. 10, 2014 / PRN=KYODO JBN/ --

    Saxo Bank [http://www.saxobank.com ], the online multi-asset trading and

investment specialist, today releases its annual set of 'Outrageous

Predictions' for the year ahead. These are 10 unlikely events, even if their

risk is under-appreciated, that would have significant consequences for global

markets should they come to pass.

    This year's predictions include the notion of a UK exit from the EU after a

landslide gain by the UK Independence Party in the country's general election.

Other outrageous predictions include Mario Draghi quitting the European Central

Bank to become Italian president, a UK housing market crash, and the eruption

of Icelandic volcano Bardarbunga, which could cancel Europe's summer in 2015.

    Steen Jakobsen, Chief Economist at Saxo Bank, comments:

    "2015 will be a tough year, but potentially also the year we look back at

as the low point in everything. Inflation has fallen to its lowest in decades,

interest rates have followed and energy prices are sharply lower. The lack of

volatility in data and in asset markets has given investors a false sense of

security and that could lead to the biggest upset in 2015. We saw a possible

preview of coming attractions during one week of mayhem in October of 2014. If

that's anything to go by, we are in for a rollercoaster ride in 2015."

    "Saxo Bank's Outrageous Predictions remain an exercise in finding ten

relatively controversial and unrelated ideas which could turn your investment

world upside down. By imagining the most negative scenarios and events, whether

a Russian default, volcanoes spreading havoc, or an internet Armageddon,

investors have a chance to stress test their assumptions about the future and

what these events might mean for their own investments. We must remember that

while the predictions outline rather extreme market scenarios, over the years,

a number of them have unfortunately come true."

    To see more please go to the Outrageous Predictions website:

    To follow Outrageous Predictions or to make your own, join the conversation

on Twitter by using the hashtag #2015OP and don't forget to follow

TradingFloor.com and Saxo Bank on @tradingfloorcom and @SaxoBank.

    Saxo Bank's Outrageous Predictions 2015

    1. UK housing sector to crash

    Surveys are already showing that momentum is fast leaving the UK housing

market, particularly in London. The impending Bank of England rate hike will

see the UK suffer a housing crash with prices falling as much as 25% in 2015.

    2. Japanese inflation to hit 5%

    Incessant Bank of Japan money printing crushes confidence in the yen as

Kuroda-san finds that his policy to bring inflation back to his country is met

with too much "success" - a symptom of Japan losing control of its currency.

    3. China devalues yuan 20%

    China will be looking for any way it can to ease the enormous deflationary

pressures that are the downside of a credit boom. As deflationary risks loom

China tears a page from the BoJ policy playbook and moves to devalue the yuan

by 20%, joining Japan in its fight to import inflation and demand.

    4. Draghi quits ECB

    To bring the Germans fully on board with the European Central Bank's move

to QE, Draghi steps aside to allow for full ECB quantitative easing to proceed

under a new president, Jens Weidmann of the Bundesbank. Draghi sees greater

opportunity for his skills in Italy, where President Napolitano requests that

he succeed him.

    5. Russia defaults again

    Plunging oil prices and a cold financial shoulder from Russia's geopolitical

antagonists see large Russian companies or the government itself defaulting on

foreign debt. A default, like in 1998, is what is needed to secure the

country's future, together with a diplomatic solution on the Ukraine question.

    6. Internet hacks smash e-commerce

    In 2015, new attacks on e-commerce's largest players become even more

widespread and aggressive, sending shockwaves through the web and cloud service

providers. Amazon.com, the largest e-commerce retailer and dominant player in

web-based services, suffers a decline of 50% on the widespread fallout to the

e-commerce industry and also because of its overvaluation.

    7. Volcanic eruption cancels Europe's summer

    Like the volcano Laki in the year 1783, the already active Icelandic volcano

Bardarbunga erupts in 2015, leading to a massive release of noxious sulphur

dioxide and other gases that cloud the skies over Europe. The eruption shifts

weather patterns and brings fears of a weak harvest across Europe, with grain

prices doubling even as the volcano's fallout proves more modest than feared.

    8. Cocoa futures hit a record USD 5,000/tonne

    Demand for chocolate is rising globally as Western preferences shift

towards darker chocolate and Asian appetite increases. With supply affected by

concerns over the Ebola virus and underinvestment in key West African

production regions, the world is consuming far more cocoa than it is producing.

This leads to a record high price for cocoa above USD 5,000 per tonne in 2015.

    9. UK seen leaning toward 2017 exit from the EU (Brexit) on UKIP election

landslide

    The UK Independence Party (UKIP) wins 25% of the national vote in Britain's

general election on 7 May, 2015, sensationally becoming the third largest party

in parliament. UKIP joins David Cameron's Conservatives in a coalition

government and calls for the planned referendum on Britain's membership of the

EU in 2017. UK government debt suffers a sharp rise in yields.

    10. High-yield corporate bond spreads double

    After a sentiment shift on high yield bonds, investors heading for the

exits in 2015 discover sparse liquidity and steep price declines. With an

ultimate washout in high-yield credit, shock waves will once again shake the

foundations of Europe's weak economy. The Markit iTraxx Europe Crossover

doubles to 700 basis points in 2015.

    Please remember to use #2015OP.

    About Saxo Bank

    Saxo Bank is an online multi-asset trading

[http://www.saxobank.com/forex?csref=b1744_Link_boilerplate_pressrelease ] and

investment specialist, offering private investors and institutional clients a

complete set of tools for their trading and investment strategies. Its

financial community portal, TradingFloor.com [https://www.tradingfloor.com ],

is the first multi-asset social trading platform. A fully licensed bank in

Europe under supervision of Danish FSA, Saxo Bank enables clients to trade FX,

CFDs, ETFs, Stocks, Futures, Options and other derivatives on our award-winning

SaxoTrader platform, accessible on PC

[http://www.saxobank.com/trading-platforms/saxotrader ]s, tablet

[http://www.saxobank.com/trading-platforms/saxowebtrader ]s or smartphone

[http://www.saxobank.com/trading-platforms/saxotrader-apps ]s through a single

account and available in more than 20 languages. The platform is white-labelled

by more than 100 major financial institutions worldwide. Saxo Bank also offers

professional portfolio and fund management as well as traditional banking

services through Saxo Privatbank. Founded in 1992, Saxo Bank is headquartered

in Copenhagen and has offices in 26 countries throughout Europe, Asia, the

Middle East, Latin America, Africa and Australia.

Source: Saxo Bank