Saxo’s 2023 Outrageous Predictions: The War Economy

Saxo, the online trading and investment specialist, has today released its 10 Outrageous Predictions for 2023. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, would send shockwaves across the financial markets as well as political and popular cultures.   

These predictions are a thought experiment in considering the full extent of what is possible – even if not necessarily probable – and, occasionally, they come true. Saxo recently released its list of correct Outrageous Predictions, which included the UK’s exit from the European Union and the wind-back on plans to end fossil fuels we saw in 2022.  

While these predictions do not constitute Saxo’s baseline forecasts for what will happen in 2023, all large market moves are brought about by something outrageous because a big market move requires a big surprise. In a world where central banks and governments are set to lose their battle with inflation, the risk is that markets will prove as outrageous as ever in 2023 and beyond.

Commenting on this year’s Outrageous Predictions, Chief Investment Officer at Saxo, Steen Jakobsen said: “This year’s Outrageous Predictions argue that any belief in a return to the disinflationary pre-pandemic dynamic is impossible because we have entered into a global war economy, with every major power across the world now scrambling to shore up their national security on all fronts; whether in an actual military sense, or due to profound supply-chain, energy and even financial insecurities that have been laid bare by the pandemic experience and Russia’s invasion of Ukraine.”

In this year’s Outrageous Predictions, Australia-based market strategist, Jessica Amir, predicts that the UK will hold an UnBrexit Referendum in 2023: "In 2023, Rishi Sunak and Jeremy Hunt manage to take Tory popularity ratings to unheard-of lows as their brutal fiscal programme throws the UK into a crushing recession, with unemployment soaring and, ironically, deficits soaring too as tax revenues dry up. Public demonstrations break out, demanding that Sunak call snap elections because of the lack of a popular mandate. Amidst the economic ruin, polls even in England and Wales indicate second thoughts on the wisdom of Brexit. Sunak finally caves and calls an election, resigning to allow a new Tory profile to take charge of the battered party. Labour leader Keir Starmer, noting the popular support for a second Brexit referendum and the Lib Dems surging in the polls as they clamour for a new referendum, runs on a platform of non-alignment on the Brexit question but supports a second referendum to rejoin the EU along the lines of the David Cameron deal struck before the original 2016 referendum. A Labour government takes power in Q3, promising an UnBrexit referendum for November 1, 2023. The ReJoin vote wins. As for the market impact - after a weak performance in early 2022, GBP recovers 10 percent versus the EUR and 15 percent versus the CHF on the anticipated boost to the London financial services sector.”

Other Outrageous Predictions for 2023 from the global SaxoStrats team as follows:

• Anders Nysteen, Senior Quantitative Analyst & Peter Garnry, Head of Equity Strategy predict a Billionaire coalition creates trillion-dollar Manhattan Project for energy
• Christopher Dembik, Head of Macro Analysis predicts French President Macron to resign
• Ole Hansen, Head of Commodity Strategy predicts Gold to rocket USD 3,000 as central banks fail on inflation mandate
• Christopher Dembik, Head of Macro Analysis & John Hardy, Head of FX Strategy predict a Foundation of the EU Armed Forces
• Charu Chanana, Market Strategist predicts A Country agrees to ban all meat production by 2030
• Steen Jakobsen, Chief Investment Officer predicts Widespread price controls are introduced to cap official inflation
• Redmond Wong, Market Strategist predicts OPEC+ and Chindia walk out of the IMF, agree to trade with new reserve asset
• John Hardy, Head of FX Strategy predicts Japan to peg USDJPY at 200 to sort out its financial system
• Peter Garnry, Head of Equity Strategy predicts Tax haven ban kills private equity