10 strikes that would turn world markets upside down

Reduction of world oil production, increase in rates of the European Central Bank (ECB) or the introduction of a new income tax on the sale of foreign goods by the USA. These are some of the 10 events that could have an impact on financial markets next year, as well as on national economies if they occur. Saxo Bank publishes these 10 shocking forecasts every year.

Predictions represent a set of unlikely and undervalued ones events which, if they took place, could lead to financial markets cause a wave of panic.

“We consider 2020 to be a year in which the current status quo must end up. 2020 could be a counterweight to current policy, monetary and fiscal, and last but not least the approach to the environment environment. If that happened, the populists would pay the hardest, because their talk of division would be replaced by mergers, “ notes Saxo Bank Chief Economist Steen Jakobsen.

Russia, OPEC, USA and oil

The first forecast is that OPEC and Russia will announce a reduction in production oil despite a slowdown in shale oil production in the US due to insufficient return on investment. Bank economists say the market would spiraled out of control because investors betting on falling oil prices and hedge funds would run out, resulting in rising Brent oil prices up to $ 90 per barrel.

“For Russia, it would mean a huge victory, because the Russian public finances in the original budget counted on a price of $ 49 per barrel, ”say Saxo bank economists. On the other hand, the green industry energy will face an obstacle in the form of low returns in 2020 investment. “Nevertheless, there will be a long-term political focus on electric vehicles and to regulate pollution by cars constantly increase. Commitments on climate protection will be fully developed deepen the world, ”predicts Saxo Bank.

ECB rates

Another possible scenario is for the ECB to raise interest rates. New President Christine Lagard, who had previously approved negative rates, could declare that monetary policy has exceeded its limits. In order to force euro area governments, and in particular Germany, to pursue fiscal policy on stimulating the economy, the ECB will reverse its monetary policy on 23 January 2020 policy and increase rates.

There could also be a change in the development of oil prices next year. “It will be OPEC continue to cut production, loss-making shale oil miners will bring a slowdown in production growth. On the other hand, demand will start to grow again from Asia. However, the winner will not only be oil and gas extraction. Also the industry clean energy will grow again, ”predicts Saxo Bank.

Trump’s new tax

Another prediction is that US President Donald Trump will announce a new tax on all income from the sale of goods from abroad, thereby distorting supply chain and pumps up inflation. “It will be a fundamental change US tax system in order to favor domestic production soil. Existing import duties will be abolished and replaced by a single tax of value added at 25% on all U.S. revenue market from foreign production, ”economists predict. Business partners will protest that these are old duties only in the new ones packaging, however, the response of officials will be that foreign companies are welcome when moving production to American soil.

Hungarian brexit

Saxo Bank also talks in the forecast about the possible departure of Hungary from Europe Union, despite the fact that after accession to the Community economic growth. “However, a 15-year marriage to the EU seems to be going on crisis. The Union has initiated Article 7 to restrict media freedom, judiciary, education and minority rights in Hungary. His political response The leadership is that the country only defends itself and its culture from the masses migration, ”suggests Saxo Bank.

New Asian currency

Asia could also introduce a new reserve currency to break away from dominance of the US dollar. “In order for Asian countries to reduce its vulnerability to the US dollar, Asian infrastructure the investment bank will create a new reserve asset. Local states will gradually approach the settlement of trades in this currency, including oil exporters such as Russia and OPEC countries. By the way a substantial part of the world trade separates from the US dollar, the US will leave it ‘dry’, “ Saxo Bank economists suggested.

Reduction of world oil production, increase in rates of the European Central Bank (ECB) or the introduction of a new income tax on the sale of foreign goods by the USA. These are some of the 10 events that could have an impact on financial markets next year, as well as on national economies if they occur. Saxo Bank publishes these 10 shocking forecasts every year.

Predictions represent a set of unlikely and undervalued ones events which, if they took place, could lead to financial markets cause a wave of panic.

“We consider 2020 to be a year in which the current status quo must end up. 2020 could be a counterweight to current policy, monetary and fiscal, and last but not least the approach to the environment environment. If that happened, the populists would pay the hardest, because their talk of division would be replaced by mergers, “ notes Saxo Bank Chief Economist Steen Jakobsen.

Russia, OPEC, USA and oil

The first forecast is that OPEC and Russia will announce a reduction in production oil despite a slowdown in shale oil production in the US due to insufficient return on investment. Bank economists say the market would spiraled out of control because investors betting on falling oil prices and hedge funds would run out, resulting in rising Brent oil prices up to $ 90 per barrel.

“For Russia, it would mean a huge victory, because the Russian public finances in the original budget counted on a price of $ 49 per barrel, ”say Saxo bank economists. On the other hand, the green industry energy will face an obstacle in the form of low returns in 2020 investment. “Nevertheless, there will be a long-term political focus on electric vehicles and to regulate pollution by cars constantly increase. Commitments on climate protection will be fully developed deepen the world, ”predicts Saxo Bank.

ECB rates

Another possible scenario is for the ECB to raise interest rates. New President Christine Lagard, who had previously approved negative rates, could declare that monetary policy has exceeded its limits. In order to force euro area governments, and in particular Germany, to pursue fiscal policy on stimulating the economy, the ECB will reverse its monetary policy on 23 January 2020 policy and increase rates.

There could also be a change in the development of oil prices next year. “It will be OPEC continue to cut production, loss-making shale oil miners will bring a slowdown in production growth. On the other hand, demand will start to grow again from Asia. However, the winner will not only be oil and gas extraction. Also the industry clean energy will grow again, ”predicts Saxo Bank.

Trump’s new tax

Another prediction is that US President Donald Trump will announce a new tax on all income from the sale of goods from abroad, thereby distorting supply chain and pumps up inflation. “It will be a fundamental change US tax system in order to favor domestic production soil. Existing import duties will be abolished and replaced by a single tax of value added at 25% on all U.S. revenue market from foreign production, ”economists predict. Business partners will protest that these are old duties only in the new ones packaging, however, the response of officials will be that foreign companies are welcome when moving production to American soil.

Hungarian brexit

Saxo Bank also talks in the forecast about the possible departure of Hungary from Europe Union, despite the fact that after accession to the Community economic growth. “However, a 15-year marriage to the EU seems to be going on crisis. The Union has initiated Article 7 to restrict media freedom, judiciary, education and minority rights in Hungary. His political response The leadership is that the country only defends itself and its culture from the masses migration, ”suggests Saxo Bank.

New Asian currency

Asia could also introduce a new reserve currency to break away from dominance of the US dollar. “In order for Asian countries to reduce its vulnerability to the US dollar, Asian infrastructure the investment bank will create a new reserve asset. Local states will gradually approach the settlement of trades in this currency, including oil exporters such as Russia and OPEC countries. By the way a substantial part of the world trade separates from the US dollar, the US will leave it ‘dry’, “ Saxo Bank economists suggested.