Macro chat with Saxo CIO Steen Jakobsen

Clare MacCarthy
Senior Editor, Saxo Bank

Summary: Join Saxo’s Chief Economist, Steen Jakobsen, and Head of FX Strategy John J Hardy, for the first edition of our new podcast series exploring the most important macroeconomic themes currently influencing the world’s financial markets and the likely trajectory of developments in the months ahead.

Topics discussed in this edition include:

• How the Sino-US trade war may ultimately end with a “non-solution” outcome that would actually be beneficial to both Trump and Xi.

• Why the stable course of the CNY during this trade spat leaves markets dangerously complacent that low volatility will linger.

• Whether the Federal Reserve is now behind the curve or ahead of it with its monetary policy.

• Why the plight of the German car industry will finally force the EU into fiscal action and how the current political uncertainty in the bloc will change the conversation from a bigger Europe to a better Europe.

• Why the Brexit dilemma can’t be solved until UK prime minister May steps down and why there will have to be a second referendum.
• How the Brexit endgame will likely extend beyond the current Halloween deadline and why this is negative for sterling.

• How – and in which asset classes – investors should reposition their portfolios to reflect a period of relative stability over the summer months, followed by autumn volatility as governments start to panic.

Outrageous Predictions 2023: The War Economy

Billionaire coalition creates trillion-dollar Manhattan Project for energy
The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
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French President Macron resigns
The political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
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Gold rockets to USD 3,000 as central banks fail on inflation mandate
As markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
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EU Army forces EU down path to full union
With continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
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A country agrees to ban all meat production by 2030
In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
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UK holds UnBrexit referendum
Following a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
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Widespread price controls are introduced to cap official inflation
History tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
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OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve asset
Sanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
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USDJPY fixed to the USD at 200 as Japan overhauls financial system
Following the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
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Tax haven ban kills private equity
With the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.
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