Earlier last week, Saxo Bank analysts released their yearly forecast of major economic-related events for the upcoming years. “From a Russian default to a UK housing shock and a market-decimating volcano eruption to an online-shopping hijack, we think we’ve mixed the brilliant with the outlandish to, at the very least, offer food for thought and perhaps to flavour your trading portfolios in 2015.” stated the website on the day of its release.
If we take a look at the simplified overview, some of the predictions might seem shocking, but with the current global events that have been unfolding in the past year, it looks like some of the predictions just might come true.
Here is the list of the ‘Outrageous Predictions’ for 2015:
1) Russia defaults again
2) Volcano eruption decimates crops
3) Japanese inflation to hit 5%
4) Draghi quits ECB
5) Corporate bond spreads to double in 2015
6) Internet hacks smash online shopping
7) China devalues yuan 20%
8) Cocoa futures hit USD 5.000/tonne
9) UK house sector to crash
10) Brexit 2017
While Russian companies need to repay $134 billion in debt between 2014 and 2015, the fall of the crude oil price standing now at $55.91 a barrel and the sanctions imposed by the U.S. and European Union, it comes to no surprise that Russia’s economy has lost its pace. According to ABC News Moscow correspondent Kirit Radia “At lunch and the waiters just removed price tags from the wine bottles on the table. Watching inflation in real time”
Trading Floor are not the only ones predicting that Draghi might quit as the head of the ECB this year, according to the Fiscal Times “Draghi appears set to leave Frankfurt and return to his native Italy the first chance he gets. This could be as soon as January, depending on a variety of circumstances in Frankfurt and Rome, according to well-placed sources who include a prominent private investor and a senior journalist in Rome”
It also comes to the surprise of many that Juncker’s possible resignation as President of the European Comission is not on the list. At the beginning of November, leaked documents showed that the Luxembourgian government gave more than 300 companies “sweetheart deals” in tax breaks while he was prime minister, reported the Daily Mail.
With general elections coming up next year in the UK, a referendum for the country to leave the European Union might only be possible if the current conservative government maintains its majority, since the labor party does not seem to have an in-out referendum amongst their campaign promises. According to a recent article by AFP regarding a recent poll “If a referendum was held immediately, 42 percent of Britons would support leaving the EU, compared to 31 percent who would opt to stay in”.
Whether any of these predictions may come true or not, if only a few of them do, we really are “in for a roller-coaster ride in 2015”, as Saxo’s Bank chief economist Steen Jakobsen says.
To take a look at the original predictions, make sure you click here.
S. de la Presilla