For 15 years, the Danish bank Saxo Bank has identified 10 events, the probability of which is greatly underestimated.
This year the list published in the annual report “Shocking Predictions”, the collapse of bitcoin, the triumph of corporate feminism, the weakening of Apple and the change in the mood of the American electorate.
In this research, the financiers tell about the events, which estimated by the majority of people in 1%, but in fact they can happen with a probability of 10% or even higher.
Saxo Bank call this list “Shocking predictions” – this is not a forecast, but only a reminder that one should not underestimate the probability of some negative events.
The collapse of Bitcoin
Bitcoin and other crypto-currencies are one of the most significant phenomena in the financial markets in recent years, notes Saxo Bank. The report says that the cost of bitcoin could fall sharply in 2018. The collapse may appear after Russia and China ban crypto-currencies, analysts say. Bitcoin will reach its peak of $ 60,000 and a capitalization of $ 1 trillion, and then the quotes will drop to the cost of mining – about $ 1,000 for bitcoin, the report said.
In 2018, the trend to increase the proportion of women executives will become “super-exponential.” The number of women in the list of Fortune 500 directors will grow by 2 times, the research said.
“Changes are coming, not just because it’s fair, for practical reasons, that women who are aware of their potential are the only remaining way to increase the pie without increasing the population of our low-productivity and aging economies,” the authors of the report wrote.
Left-wing mood in the US parliament
The US policy in 2018 will be strongly influenced by the demographic shift – an increasingly important role will be played by the ethnically mixed generation of those born after 1981.
In addition, many Democrats do not hesitate to resort to populist methods, the research said.
According to Saxo Bank analysts, all this may lead to the fact that, following the November congressional elections, Democrats will receive a majority in both chambers of the Congress.
Disagreements between the old EU members and Eurosceptic states in 2018 may become irreconcilable, the research says.
Relations between them deteriorate because of the migrant issue, the perception of democratic values and internal labor migration.
The center of influence may shift from France-Germany to the unification of the Central European states: Poland, the Czech Republic, Slovakia, and Hungary (the so-called Visegrad group). Austria can join these four states.
The new Austrian Chancellor Sebastian Kurtz is close to the Prime Minister of Hungary Viktor Orban, who is often reproached for populism. The resulting union of Eurosceptic states is increasingly reminiscent of the new Austro-Hungary, the authors of the report note.
Apple will take second place
The American manufacturer of technology Apple can lose the title of the largest company in the world. According to Saxo Bank, the capitalization of China’s Internet giant Tencent in 2018 will double, and Tencent will overtake Apple at market value.
The possible success of Tencent analysts is explained by the fact that Beijing opens its capital markets and conducts reforms, attracting investors’ interest. China is the most populous country in the world with a growing level of welfare, noted authors of the research.
Federal Reserve and Independence
The US Federal Reserve System in 2018 may become more dependent on the US government, Saxo Bank believes.
Budget discipline in the US is not important, new tax breaks will lead to the loss of budget revenues, write authors of the report.
As a result, politicians in an attempt to find the culprits can blame everything on the Fed, analysts believe, and the US Treasury will limit the yield of “long” government bonds to keep economic growth and spending at the same level.
The role of the yuan in oil transactions in 2018 may grow much more than expected. The largest importer of oil in the world – China – and many producers of raw materials are increasingly calculated among themselves in RMB.
Next year, the Shanghai International Energy Exchange will launch oil futures, nominated in RMB. The launch of the new instrument will have serious geopolitical and financial consequences, analysts write.
The collapse of the Yen
In 2018, the rate of Japanese national currency against the dollar could fall sharply due to rising inflation and yield on bonds.
The Bank of Japan at the end of September began targeting the yield curve of bonds – this measure involves buying up long-term bonds to keep their yields low.
This policy of the regulator depends on flexible interest rates and low profitability of bonds around the world, and in 2018 this condition is unlikely will be met, analysts say Saxo Bank.
As a result, the yen will fall in price – the dollar rate in Japan will grow to 150 yen, after which the regulator will launch a policy of “quantitative easing”, and the rate will return to the mark of 100 yen, the report of the Danish investment bank says.
The collapse of the Stock Exchange
In 2017, volatility in world Stock Exchange was low, which surprised many investors, analysts write.
Saxo Bank fears that the volatility is simply masked, and someday in 2018 a sharp collapse may appear on the Stock Exchange.
Experts note that various indicators of the Stock Exchange resemble the situation before the “Black Monday” in the late 80’s when the US Dow Jones index for the day felt by more than 20%.
According to the authors of the research, the same sharp collapse may occur in 2018 – the S & P 500 index may fall by 25% in one trading day.