Saxo Bank Publishes its Investment Outlook for Q2 2014

Hellerup, Denmark (ots/PRNewswire) -

Saxo Bank [http://www.saxobank.com/?noredirect=true ], the online
multi-asset trading and investment specialist, has published its
second quarterly insight for 2014, focusing on the outlook for
Europe.

European outlook: A United States of Europe?

Following an abundance of false starts, the European economy is
likely to encounter further challenges in Q2, Saxo Bank writes in its
second quarterly insight for 2014. By the end of the second quarter,
the European Central Bank is likely to grow increasingly concerned
about deflation and the lack of growth and signal new quantitative
easing and yet another set of unconventional measures.

As well, Europe faces its biggest electoral challenge since the
1970s, as the reality gap between Europe's voters and their
EU-friendly politicians is wider than ever. At the May EU
parliamentary elections, look for EU sceptic parties to form one of
the largest overall blocs in the new European Parliament. If Brussels
listens to voters, it could mark a decisive turning point for the
failing EU experiment, even if for now, the political status quo is
more likely to maintain the upper hand.

While the economic outlook appears to be improving for Spain,
Portugal and Greece, this is really part of an internal transfer of
problems from these 'Club Med' countries to France and soon Germany,
which is likely to flirt with recession by the end of the year.
France and Germany are also likely to suffer from reduced exports,
particularly in the luxury goods sector, as Asian growth cools.

Steen Jakobsen, Chief Economist and CIO for Saxo Bank, commented:

"The EU member countries have surprised with their political
solidarity over the last few years of the EU crisis, but the
electorate is growing restless and EU-sceptic parties are making huge
inroads that the establishment must recognise. Beside this we have
the eternal problem that the EU entirely lacks an economic foundation
that is sound and long term. Here in early 2014, EU complacency has
never been higher, just as real political and popular entropy is
about to make its presence felt."

Global outlook: a 'state of flux'

The 'Fragile Five" (South Africa, Brazil, India, Indonesia,
Turkey), which with the recent additions of Argentina, Russia and
Chile have become the "Fragile Eight", are now in the process of
rebalancing, as the Fed tapering has forced their currencies weaker
and required policy tightening that will crimp growth and right the
structural imbalances that have grown in recent years. This "state of
flux" is a positive development overall, but too many countries and
economies are trying to do the same thing simultaneously - devalue
and increase exports - so growth is likely to weaken structurally and
cyclically due to prior credit excesses.

As Jakobsen points outs, "We have been so focused on saving the
world, the banks and the political system that we have underinvested
in people, education, infrastructure, innovation and technology.

"It will not be the European Parliamentary elections that make or
break the EU, but how the policymakers and their trusted mandarins
respond to the slowdown and subsequent rebalancing of the world."

Key points on investments for 2014:

Fixed income: core government bonds will be the only asset that is
up Q1 2014 versus Q1 2015 (rebalancing and lack of productivity).

Foreign exchange: EURUSD will peak at about 1.4000/1.4050and then
turn down to 1.2500 (the ECB should get active on deflation over the
summer). USDJPY could see 95.00 on a VAT hike and initial signs of
Abenomics failing. The "Fragile Eight" will drop another 5 percent.

Commodities: will do well through Q2 as real rates will drop, but
could fall again heading into H1 2015.Will take profit in Q3 2014.

Equity: The S&P 500 will peak at about 1,900-1,950, then a 30
percent correction. Equities are the only asset not yet hurt by the
changing economic cycle.

Consult Saxo Bank's full quarterly outlook for Steen Jakobsen's
article in full, alongside additional outlooks for individual asset
classes: https://beta.tradingfloor.com/publications/quarterly-outlook

About Saxo Bank

Saxo Bank is a leading online trading [http://www.saxobank.com/fo
rex?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://beta.tradingfloor.com ], is the first multi-asset social
trading platform. A fully licensed and regulated European bank, 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 25 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 Group Public Relations,
+45-3065-4300, press@saxobank.com