The Saxo G20 Risk Radar The Saxo G20 Risk Radar The Saxo G20 Risk Radar

The Saxo G20 Risk Radar

Christopher Dembik

Head of Macro Analysis

Summary:  Saxo's G20 Risk Radar identifies potential political risk events in the G20 countries that could have an impact on the market. It is updated on a regular basis with the most up-to-date data.

Brexit: This is certainly the most underpriced political risk in the coming months. In our view, the chances of failing to get a deal with the European Union are under 50% but we acknowledge we may be wrong and that negotiations can fail at any time, especially due to the Europeans’ hard line. Prime Minister May’s upcoming political challenge is to unite her party behind her Brexit plan at the Conservative Party Conference that runs from September 30 until October 3. The PM will give her keynote address on the final day of the event, which should give some insights about the milestones she wants to reach.

We still believe that there will be a withdrawal agreement and a transition deal for the UK to leave the European Union on March 29, 2019. However, it is likely that the political declaration on the future relation with the EU will be vague due to many pending questions on trade and Northern Ireland border. The transition period will lead to higher political tensions between London and the other European governments about Northern Ireland and long-term deal.  

Talks on the 2019 Italian budget: Leading indicators and recent data such as PMI and business expectations confirm the scenario of broad growth stagnation in Q3. In our view, it will seriously complicate the budget equation in Q4. The lack of a unified message from the government over its upcoming budget along with economic weakness will certainly lead to higher volatility in the next two months, especially when the EU Commission communicates its judgment on the budget on November 30. That being said, the risk of Italy’s “hot autumn” is limited according to us. In the immediate future, the Italian government has every interest in respecting its European budget commitments as it will need very favourable market conditions to face €300 billion in refinancing in 2019.

US-China trade war: Trade war noise is an over-inflated risk. As global easing era comes to a close, investors' focus should be on the US dollar and the financial flows and not so much on trade war. As of today, the global economy has seen 14% more trade distortions imposed this year than in 2016 (the previous high of distortions implemented year-to-date). At the same time, according to Global Trade Alert, the global economy has seen 22% more liberalisation this year. Taking in consideration these data, it appears that the US-led trade war is more a short-term risk for growth and markets, but it is so far unable to derail global growth.  
Saxo G20 Risk Radar
Source: Saxo Bank

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 is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited 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

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

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

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.