Saxo Bank Warns Investors to Price in the Limits of "Planned Economy" Model

Hellerup, Denmark (ots/PRNewswire) -

Saxo Bank, the online multi-asset trading and investment
specialist, has published its Q2 outlook warning investors of the end
to the current cycle of "extend and pretend" as the planned economy
model of the past eight years comes to breaking point.

Saxo Bank Chief Economist Steen Jakobsen's Q2 outlook for the
global economy is dour. He believes that the current cycle of extend
and pretend is nearing its end. For too long, policymakers and
central banks have bought time by pumping asset markets with zero
interest rates and QE, forcing investors to take greater risks on the
lack of alternatives and allowing companies to boost share prices
with huge buybacks, often with cheaply borrowed funds. From Q2, look
for an increased risk for asset re-pricing and a period of zero or
even negative returns.

Predicting a rupture with the past, Steen Jakobsen, Chief
Economist, Saxo Bank, said: "The global market is closer to the
Soviet Union in 1989 in its political and economic structure than to
a freely traded market. The inability to move all the printed money
into the real economy remains the central issue and solution to the
economic dilemma. The ECB's move into negative rates in 2014 could
turn to be the catalyst for change, especially since 35% of all
European government debt is now trading at negative yield.

"If you are a company, it is difficult to keep sales volumes going
up when your consumers are not taking part in the recovery. The
conclusion should be that an economic system which does not allocate
capital to the highest marginal cost of capital, and which continues
to support the one per cent versus the 99 per cent ultimately comes
full cycle to a point where the expected return of everything is zero
again."

Against this backdrop, the bank publishes its outlook for the
market and its key trading ideas for the next quarter.

- Commodities

The collapse of the oil price in the last six months has stunned
the global economy with the implications of a near 50% fall in the
major benchmarks still unwinding says Ole Hansen, Saxo's Head of
Commodity Strategy. This environment has left the market open for
some contango opportunities in Q2, expectations based on the premise
that prices will rise in the future, especially in the US market. In
Q2, focus will be on restoring a proper balance between supply and
demand of the black stuff.

Saxo Bank expects the gold price will continue to depend on the
dollar, the direction of US bond yields and the timing of the first
US rate hike with no major positive impact expected.

Trade 1: A bullish exposure to precious metals

Trade 2: Shorting WTI crude

- Macro

The tailwind from lower energy prices, a weaker euro, and an
overall less weak economy result in a meaningful upward revision to
euro area growth to 1.5% in 2015. "In the US, I maintain the outlook
for growth of around 3% while I remain below-consensus with a 6.7%
forecast for China", says Mads Koefoed, Saxo Bank's Head of Macro
Strategy.

"There are plenty of event risks in Q2 waiting to raise volatility
in the markets. The Greeks may find themselves with their backs
against the wall again in late June and in the US, the FOMC is
preparing for the first rate hike since 2004 with June and September
the most obvious candidates." adds Koefoed.

Trade 1: Stay long European high-yield corporate bonds on ECB QE

Trade 2: Buy long-term US Treasuries on FOMC rate-hike
postponement

- FX

In currencies, Head of FX Strategy John Hardy is looking for
potential mean reversion in the extremes of NZD strength and SEK
weakness in Q2. Elsewhere, the USD rally looks set to continue in Q2,
though the pace is likely to slow significantly after the incredible
advance of the previous six months. And the JPY outlook is a big
question mark, as USDJPY has remained in a technical limbo in late
Q1, which is the end of Japan's financial year. GBP may stay under
pressure as the elections approach in May.

Trade 1: Shorting NZD vs. AUD and USD

Trade 2: Shorting GBPSEK

- Equities

Peter Garnry, Saxo Bank's Head of Equity Strategy expects capital
to be flowing again into Europe, amid an improved economic outlook,
with equities set for their best start since 1995 and are already up
14 per cent year-to-date. One of the assets that has already
benefitted a lot from the current trajectory of monetary policies and
improving macro conditions is real estate, which is up 20 per cent
this year.

Tailwind is the word for the European equities in Q2 and 2015
could likely be a deja vu of US equities in 2013 when they rose 32
per cent. This means that European equities could return an
additional 15 per cent on top of their impressive start to the year.

Trade 1: Long Airbus - buying Airbus

Trade 2: Long Colombia - buying the Global X MSCI Colombia 20 ETF

To access the full list of trade ideas produced by Saxo Bank
analysts which accompany the Q2 2015 outlook, please click here:
https://www.tradingfloor.com/publications/essential-trades

About Saxo Bank

Saxo Bank is an online multi-asset trading [http://www.saxobank.c
om/forex?csref=b1744_Link_boilerplate_pressrelease ] and investment
specialist, offering private investors and institutional clients a
complete set of tools for their trading and investment strategies.
Its financial community portal, TradingFloor.com
[https://www.tradingfloor.com ], is the first multi-asset social
trading platform. A fully licensed bank in Europe under supervision
of Danish FSA, Saxo Bank enables clients to trade FX, CFDs, ETFs,
Stocks, Futures, Options and other derivatives on our award-winning
SaxoTrader platform, accessible on PC
[http://www.saxobank.com/trading-platforms/saxotrader ]s, tablet
[http://www.saxobank.com/trading-platforms/saxowebtrader ]s or
smartphone
[http://www.saxobank.com/trading-platforms/saxotrader-apps ]s through
a single account and available in more than 20 languages. The
platform is 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, Saxo Bank is headquartered in
Copenhagen and has offices in 26 countries throughout Europe, Asia,
the Middle East, Latin America, Africa and Australia.

ots Originaltext: Saxo Bank (Switzerland) SA
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Media enquiries: Kasper Elbjørn, Head of International
Communications, +45-3065-4300, press@saxobank.com