Saxo Bank unveils “shocking forecasts” event list for 2020
The bank publishes a list of disconcerting events every year. Although they are considered unlikely to actually occur, their potential consequences would heavily threaten the stability of financial markets.
Saxo Bank analysts emphasize that their “shocking forecasts” cannot be considered official recommendations, but they nevertheless advise investors not to underestimate the likelihood of such events.
According to analysts, Russia and the OPEC “cartel” countries will respond to a slowdown in shale oil production in the United States and announce a new reduction in production. After that, the price of Brent brand fuel will rise to US$90 per barrel, which is beneficial primarily to Russia.
Moscow will also benefit from the development of green energy, experts say. Rising attention to climate issues leads to an increase in demand for "environmentally friendly" raw materials used to control carbon emissions that are generated from the transport sector. Due to the fact that palladium is popular for use in cars to improve air quality Russia stands to benefit as it is one of the largest suppliers of this precious metal.
America First Tax
According to experts, the protectionist policies of the US President Trump’s Administration will go as far as the introduction of an “America First” tax, which will call upon the restructuring of the entire tax system in order to stimulate domestic production.
"After seeing polls that predict a crushing election loss, Trump is losing patience, and his administration, in a recent attempt to tackle the protectionist theme, is pushing an “America First” narrative. The country's business tax system will be completely reconstructed in favor of domestic production on the principle of an ‘honest and free trade’," Saxo Bank analysts write.
Under this scenario, the White House will abolish all existing tax policies and introduce a 25% VAT on all gross revenue received by American companies from production abroad.
Trump will lose the election
Experts say that the current US president’s victory in 2016 was brought about by votes from older white citizens. Currently, most populous generation in the United States is the millennials - people from 20 to 40 years old, who are generally more liberal-minded, and so is the older part of "Generation Z".
According to Stein Jacobsen, Director of Investments at Saxo Bank, with the support from the younger voters, Democrats will win by a margin of 20 million votes. Massachusetts Senator Elizabeth Warren will likely become the next US President.
Hungary will leave the EU
Disagreement over values may lead to a split between Brussels and Budapest. Thus, the European Union launched a procedure against Hungary under Article 7 of the Union Treaty, referring to the increasingly draconian restrictions on freedom and independence of the press, justice system, and science that are introduced in the country.
New reserve asset in Asia
Amid US threats to turn the dollar into a weapon used in the trade war against China, a new reserve asset called the “Asian Drawing Rights” (ADR) may emerge. It will become the world's largest currency unit and will be equal to two US dollars.
Analysts suggest that ADR may become the main means of monetary currency in the Asia-Pacific region. According to them, in just a few months after the introduction of the asset, the dollar would weaken by 20