16 December, 2015
A hundred dollar oil and the rise of the Russian ruble are among the
events that would shock global markets next year, according to Saxo
Bank's thirteenth annual "Outrageous
Predictions" for 2016.
Among the 10 events that could significantly affect next year's
financial landscape analysts see would be oil's brief but drastic
return to $100 per barrel on the back of OPEC's turmoil.
According to Saxo Bank, the global geopolitical situation will make
the Russian ruble the most successful currency in 2016. The ruble is
predicted to rise 20 percent against the US dollar by the end of
Here are the rest of Saxo Bank's "outrageous predictions":
The euro will become a "stronger
currency and not a weaker one" in the euro/dollar pair,
according to the report.
"The race to the bottom has gone
full circle, meaning we are back to a weaker US dollar again
as the direct outcome of US interest rate policy."
Late 2016 will see a series of
aggressive rate hikes from the Federal Reserve. It would trigger a
huge selloff in all major bond markets similar to the Lehman
American politics will go through dramatic changes with the
Republican Party seeing weakness over its internal struggle, and
Democrats retaining the presidency and retaking Congress in 2016.
"Silicon Valley's unicorns brought
back down to earth," meaning that startups will delay
monetization and tangible business models in exchange for adding
users and trying to achieve critical mass.
Silver will regain public confidence in
2016, rallying by a third and leaving other metals behind. "The
political drive towards reducing carbon dioxide emissions by
supporting renewable energy will add to increased industrial demand
for the metal."
The upcoming Olympics in Brazil will boost emerging markets (EM).
"Stabilization, investment spending
on the Olympics, and modest reforms will see sentiment rebound
in Brazil, with EM exports helped by cheaper local currencies."
Saxo Bank also predicted
El Niño in 2016 surging inflation as it,
"will cause moisture deficits in
many areas of southeast Asia and droughts in Australia."
It also forecasted inequality's "last
laugh" on luxury with an unemployment rate of over 10 percent in
Last year's "Outrageous Predictions for 2015" from Saxo Bank
a volcanic eruption in Iceland
subsequent drop in yields in Europe
the devaluation of the Chinese yuan
a record increase in the price
The "predictions" are meant in fun, with the bank's official
"I do expect that the average price
of oil next year will be much higher than the present $35-$37
range. For me, oil over the next 10 years will trade basically
at $40 to $60," Chief Economist at Saxo Bank, Steen Jakobsen
told RT on Wednesday.
He added that the average price of oil
in 2016 will be probably at $50 a barrel.