When December arrives and trading is quiet, market strategists come up with their wildest predictions for the year ahead. Disclaimer: they don’t actually expect all of them to be right.
But and some of those calls are actually coming true. Of the eight “financial-market surprises” published by Standard Chartered Plc, two have effectively materialized, while three more still remain possible.The European Central Bank restarting quantitative easing .The U.S. Treasury tries to sell 50-year bonds .Hong Kong abandons its dollar currency peg .Japan monetizes the national debt, the yen climbs to 80 per dollar .
Standard Chartered aren’t the only ones who had a punt. Saxo Bank A/S published their “10 Outrageous Predictions” for 2019 in December, including one that called a German recession. By most accounts, Europe’s largest economy may be in one already. There is no sign of some of the others — including a solar flare creating chaos and a global transportation tax.
Neither bank predicted a US$17 trillion pile of negative-yielding debt — bonds guaranteed to lose investors’ money if held to maturity — a meltdown in the U.S. repo market, or a drone attack on a Saudi oil facility. But hey, you can’t get everything right.
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