Saxo Bank's Q4 2013 Outlook: Destined for Global Growth Slow Down

Hellerup, Denmark (ots/PRNewswire) -

With or without the support of further quantitative easing from
the major central banks, global growth is headed for a slowdown, say
Saxo Bank's analysts in the Bank's financial outlook for Q4. They
don't expect a sustainable comeback for growth until policymakers
stop supporting the parts of the economy that don't need or deserve
support and start supporting the most important engine of job and
economic growth: small and medium-sized enterprises (SMEs).

With the intensifying need to reset interest rate expectations
after the Fed's non-tapering of its asset-buying programme, there is
a perfect storm brewing on the economic horizon. This would be good
news, Saxo Bank pointed out in the Quarterly Outlook published on 8
October. The only way to stop the unprecedented monetary experiment
is for it to fail to show that it is generating what should always be
the number one priority: more jobs and rising incomes.

Saxo Bank argues that a weak economy and in particular the
struggling labour market will force the Fed's hand, and instead of
tapering it will have to increase its QE next year as the economy is
too weak to weather a pullback in Fed support. As the markets adjust
to the prospect of more QE rather than less, we may see another bout
of hope that extend and pretend will continue to pump asset
valuations ever higher. However, further ahead, likely sometime early
in 2014, the QE cycle - or at least the markets response to it - will
begin to falter as Fed policy will increasingly risk losing
credibility. In the end, all major historic shifts in policy have
only come as a result of massive stock market declines or
unemployment rates becoming too high and painful to ignore. In other
words, QE will only be threatened as a policy tool when the markets
roundly reject it, rather than celebrating it.

Steen Jakobsen, Chief Economist, Saxo Bank,comments: "The global
economyis running on empty. 2014 will see a bigger discussion on what
is the real exit strategy from the current 'extend and pretend'.
Right now the market only sees two paths: Inflating the economy to
reduce the burden of debt, or writing off the debt between treasuries
and central banks.But I believe there is a third way: A repeat of the
1940s - the last time fed was this involved in so-called helping the
market. Back then, the Fed got saved by disinflation and a recession
brought on by the very same policy which today slows the path towards
recovery too much easy money. History is about to repeat itself only
because we fail to learn and to embrace the need for change"

Saxo Bank advises to prepare for a good start to Q4, but for
headwinds in asset markets to build as we roll in to 2014. Steen
Jakobsen added: "2014 will be the year to clean up and prepare for a
world that is increasingly more balanced, less leveraged and more
proactively helping the one part of the economy we have kept outside
the loop throughout this cycle: the SME."

The full report can be downloaded here:
http://www.tradingfloor.com/blogs/quarterly-outlook

About Saxo Bank

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complete set of tools for their trading and investment strategies. A
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lerplate_pressrelease ], ETFs, Stocks, Futures, Options and other
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downloadable SaxoTrader and the SaxoTrader app. The platforms are
available in over 20 languages and are white-labelled by more than
100 major financial institutions worldwide. Saxo Bank also offers
professional portfolio and fund management as well as traditional
banking services through Saxo Privatbank. Founded in 1992, the Saxo
Bank Group is headquartered in Copenhagen with offices in 25
countries throughout Europe, Asia, Middle East, Latin America, Africa
and Australia.

ots Originaltext: Saxo Bank (Switzerland) SA
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Contact:
Media enquiries: Kasper Elbjørn, Head of Group Public Relations,
Saxo Bank, +45-3065-4300, press@saxobank.com