Six macro calls for 2020 Six macro calls for 2020 Six macro calls for 2020

Six macro calls for 2020

Christopher Dembik

Head of Macro Analysis

Summary:  Our six macro calls for 2020.

Today, we have released our Outrageous Predictions for 2020. The overall theme is: Engines of Disruption. Frankly speaking, I think the ones we have written this year are among the best. That being said, I am thinking it is certainly the right moment to share with you my macro calls for next year. I haven’t covered everything, but i believe the below list is a good sum up of what we should expect in 2020:

The death of free markets: Please, remember QE is not QE. In order to fix the broken monetary transmission mechanism, the Federal Reserve has already injected $324 billion in the repo market. Central banks don’t want you to know it, but this is the death of free markets. In some market segments, central banks are becoming market makers. This is especially the case for the European sovereign bond market. Based on our calculations, central banks own around 80% of German’s debt. Central bank interventions have led to mispricing, misallocation, complacency and muted volatility. This is clearly the case for the forex market, notably the EUR/USD cross. Nothing is able to move the cross and implied volatility is at an historically low point. However, we cannot live without central bank interventions as it would mean higher rates and lower liquidity which would have disastrous economic and financial consequences in a world of high indebtedness.

The Warren trade is trendy: My belief is that no matter what will happen in the coming months, the next US president will be a populist. In this context, one of the most popular trades in 2020 could be a put option on the S&P 500 index for March expiry. It would be the right way to hedge against Warren risk (in case she wins in Iowa, New Hampshire and on Super Tuesday) but also against new US tariffs against China if negotiations derail.

Old monetary policy debates are coming back: The ECB’s strategic review is likely to address the issue of inflation and the way it is calculated. This is a very old debate and there are a lot of conflicting viewpoints on the topic. The ECB, under Draghi’s leadership, seemed in favor of including housing prices in HICP but, in 2018, the EC advised against it due to the lack of timeliness of the new OOH Index (Ower-Occupied Housing Index). More basically, the ECB might need to bring some clarity about what the objective of inflation really means. It could get rid of the “below, but close to” 2% inflation target and it could adopt a more flexible approach, i.e. a range of 1-3% for instance.

And new ones are emerging: Reviewing the framework will be the best opportunity to include climate change. In that sense, Lagarde’s letter to EP was bright clear: “The intended review of the ECB’s monetary policy strategy…will constitute an opportunity to reflect on how to address sustainability considerations within our monetary policy framework”. In the United States, the economist Stephanie Kelton is justifying MMT with climate change. We should get ready to a huge monetary and fiscal climate package but more likely in 2021 than in 2020.

Economists are good at forecasting "rolling" recession: If recession does not happen in 2019, it will happen in 2020…or in 2021. As a matter of fact, it has become more and more complicated to understand how economic cycles work, partially due to the financialization of the economy. However, as long manufacturing weakness contagion to the service sector is limited, our base case scenario is that we are at the start of a mini-cycle recovery, fueled by central banks, in the context of a late-cycle expansion.

The car market is still a disaster, especially in China: In 2018, the car market was hit hard by the expiration of key tax breaks. In 2019, sales were down due to new emissions standards and the withdrawal of consumer subsidies for electric vehicles. In 2020, the car market will remain sluggish as risks on consumption and global trade will stay elevated.



Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 07

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
  • The rise of populism: Far-right parties will influence the future

    The disheartening cycle of unresolved geopolitical conflicts, the rise of polarizing political parties, and the stagnation of productivity.

    Read article
  • Investing in China: Navigating Q1 amid economic challenges

    Understand China's political landscape in Q4 2023 and the impact on counter-cyclical initiatives, with a focus on the pivotal Q1 2024.

    Read article

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.