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Friday 27.04.2018 | Name days: Tāle, Raimonda, Raina, Klementīne

Ten outrageous Saxo Bank predictions for the coming year

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUSaxo Bank has announced its Outrageous Predictions for 2016. These predictions consist of predictions for events that may have a massive impact on the world’s financial environment next year.

Steen Jakobsen, Chief Economist at Saxo Bank, commented: «Saxo Bank’s Outrageous Predictions remain an exercise in finding ten relatively controversial and unrelated ideas which could turn your investment world upside down. It is rewarding to see how the Outrageous Predictions catch our clients’ imagination and fuel ongoing debate; it is this process of discussion and anti-herd thinking that is at the heart of Saxo’s now established tradition of attempting to draw attention to the unfathomable».

EURUSD direction? It’s 1.23…

Europe is running a massive current account surplus and its weaker inflation should, in macroeconomic logic, mean a stronger currency, not a weaker one. The race to the bottom has gone full circle, meaning we are back to a weaker US dollar again as the direct outcome of US interest rates policy.

Russia’s rouble rises 20% by end-2016

By the end of 2016, a surge in oil demand and the Fed raising rates at an inappropriately slow pace causes the Russian rouble to rise some 20% versus the US dollar/euro basket in 2016.

Silicon Valley’s unicorns brought back down to earth

2016 will resemble 2000 in Silicon Valley with more start-ups delaying monetisation and tangible business models in exchange for adding users and trying to achieve critical mass.

Olympics to turbo-charge EM’s Brazil-led recovery

Stabilisation, investment spending on the Olympics, and modest reforms will see sentiment rebound in Brazil, with EM exports helped by cheaper local currencies. The result: EM equities to have a great year – outperforming bonds and other equities.

Democrats retain presidency, retake Congress in 2016 landslide

The Republican Party goes from strength to dramatic weakness as the rifts from an internal struggle on its future direction play out. This leads to a landslide victory for the Democratic Party as they successfully execute a get-out-the-vote campaign with Millennials coming out in droves having been frustrated by the political stalemate and weak job prospects of the last eight years.

OPEC turmoil triggers brief return to $100/b oil

OPEC’s crude oil basket price drops to the lowest since 2009 and unease among weaker as well as wealthier members of the cartel over the supply-and-rule strategy continues to grow. The long awaited sign of an accelerated slowdown in non-OPEC production finally begins to flicker. Suitably buoyed, OPEC catches the market on the hop with a downward adjustment in output. The price mounts a quick recovery with investors scrambling to re-enter the market to the long side – once again bringing $100/barrel prices onto the horizon.

Silver breaks golden shackles to rally 33%

2016 will see a renewed confidence in silver. The political drive towards reducing carbon dioxide emissions by supporting renewable energy will add to increased industrial demand for the metal, given its use in solar cells. As such, silver will rally by a third, leaving other metals behind.

Aggressive Fed sees meltdown in global corporate bonds

Late 2016 will see Fed chief Janet Yellen embark down a hawkish path with a series of aggressive rate hikes, triggering a huge selloff in all major bond markets as yields start to rise. As the portions of bank and broker balance sheets allotted to bond trading and market making have almost disappeared, one of the vital parts of a functioning market is simply not there. This realisation sinks in too late and the entire buy-side flee into a panic selling one-way street, as highly advanced risk models lurch into a symmetric red alert.

El Niño sparks inflation surge

Next year’s El Niño will be the strongest on record and will cause moisture deficits in many areas of south-east Asia and droughts in Australia. Lower yields across agricultural commodities will curb supply at a time when demand is still increasing on the back of global economic expansion. The outcome will be a 40% surge in the Bloomberg Agriculture Spot Index, adding some much-needed inflationary pressure.

Inequality has last laugh on luxury

Faced with rising inequality and unemployment of over 10%, Europe is considering the introduction of a basic universal income to ensure that all citizens can afford to meet their basic needs. In a more egalitarian society where other values are promoted, demand for luxury goods decreases sharply – the sector collapses.

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Economist: Latvia’s future depends on people’s patience; politicians mostly focus on near future

«People in Latvia currently live better than they ever have. Still, income level in Western Europe and elsewhere in the world will remain higher for some time.» Which predictions about banking sector’s operations have come true, and what is going on with ‘pained child’ – Latvia’s judicial system? Luminor Bank’s economist Pēteris Strautiņš explains in an interview to BNN.

FCMC chief: ABLV Bank’s closure was not the goal of FinCEN report

The report published in February by US Department of Treasury’s Financial Crimes Enforcement Network about ABLV Bank was not prepared with the goal in mind to close the bank, said chief of Latvia’s Finance and Capital Market Commission Pēters Putniņš at a public hearing organized by European Parliament’s TAX3 committee in Brussels.

Study: wages in Latvia grew more rapidly in 2017 than they did in previous years

As a result of economic growth and increasing labour force demand, remuneration level in Latvia in 2017 has reached the most rapid rate in the past several years. Average net wage in Latvia has increased by 6%, reaching EUR 894, according to results of a study performed by CV-Online Latvia.

Number of foreign travellers in Latvia up 53.2% in past seven years

In 2017, foreign travellers crossed the border of Latvia 7.7 million times, which is 13.7 % more than a year before. Last year, foreign travellers in Latvia spent EUR 691.9 million – EUR 46.7 million or 7.2 % more than in 2016.

Experts shocked about HIV patients’ reluctance to undergo treatment

The number of HIV patients that underwent treatment in Q1 2018 did not change in Latvia even though a considerable amount of funding was allocated from the state budget for HIV/AIDS treatment in 2018. This creates concerns about HIV patients’ use of healthcare services, according to Association HIV.LV.

Danske Bank to gradually cease servicing Baltic clients

In Baltic States, Danske Bank plans to focus solely on providing support to subsidiaries of Nordic clients, as well as global corporations with a considerable business portion in Nordic countries. Leaving private persons and local businesses servicing sector will be performed in a gradual manner, as reported by acting manager of Danske Bank’s Communication Office in Latvia Zane Strade.

Latvian Saeima establishes ban for banks to service shell companies

Banks registered in Latvia will no longer be allowed to work with shell companies and service their accounts. This is provided by amendments to the Law on the Prevention of Money Laundering and Terrorism Financing approved by the Saeima on Thursday, 26 April, as confirmed by the parliament’s press-service.

Ex-minister: Latvia’s biggest problem is the older generation of politicians

Older generation of politicians is Latvia’s largest problem. Some of those people are due for retirement. This is why the main objective for ‘Kustība Par!’ is involving a new generation of young and perspective politicians, says the party’s leader Daniels Pavļuts.

Danske Bank may announce its exit from Baltic States

Danske Bank Group’s office in Lithuania may announce on Thursday, 27 April, its plans to leave Lithuania and, possibly, the Baltic States, as BNS news agency’s Lithuanian branch was told by two sources.

«Oligarch talks» publication law put on hold; will fabricated «risks» impact UGF?

On Tuesday, 25 April, Saeima’s Legal Affairs Committee decided against putting up for a vote the legislative draft for the digitization and publication of the declassified portion of materials from the so-called oligarch talks criminal case.

OECD to perform independent audit of decisions made by Latvian supervisory services

Organisation for Economic Co-operation and Development plans to perform an independent audit of decisions made by the Finance Capital and Market Commission and Anti-money Laundering Service, as confirmed by Finance Minister Dana Reizniece-Ozola after a meeting of Finance Sector Development Council on 25 April.

Level of prices of agricultural products in Latvia grew 11.6% in 2017

The total price index of agricultural output in 2017 had increased by 11.6 %, which was mainly due to the rise in prices of livestock products of 25.8 %. The price index of crop products grew by 2.2 %.

51% of residents would not purchase goods production of which would pollute the environment

Environment-friendly lifestyle in Latvia, like elsewhere in the world, is becoming more popular every day. So-called green thinking also affects Latvian residents’ habits. 53% of Latvian residents prefer goods and services that help protect the environment, according to results of a study performed by AS Latvijas Zaļais punkts.

World Press Freedom index ranks Estonia highest among Baltic states

The French-based organisation Reporters Without Borders has published its 2018 World Press Freedom index, where Estonia has been ranked 12th and Latvia has been moved up by four positions to the 24th place.

Abu Meri: parliamentary investigative committee could help combat corruption in Riga City Council

«Nils Ušakovs’ policy in Riga is not only non-democratic but also allows for systematic corruption, which has become a tradition. If a week goes by with no scandal, it seems too long. Because of that, I consider forming a parliamentary investigative committee to study corruption in Riga City Council,» said Unity’s Saeima faction leader Hosams Abu Meri in an interview to BNN.

200 thousand Estonian e-mail passwords found leaked online

The global database of the illegally leaked passwords of tons of e-mail addresses contains passwords used by some 215 000 Estonian internet users.

Latvian EC Commissioner invites businesses to prepare for all Brexit scenarios

Businesses and supervisors should prepare for all possible Brexit scenarios, said Deputy Chairman of the European Commission on Financial Stability, Financial Services and Capital Market Union Valdis Dombrovskis participating in the ongoing finance forum City Week in the UK.

Latvia prepared to pay 4.8 million euros for participation in Expo 2020 in Dubai

Latvian government is prepared for participation in the international Expo 2020 in Dubai. Prime Minister Māris Kučinskis said after a meeting of the Cabinet of Ministers this Tuesday that it is planned to allocate EUR 4.8 million for this venture.

Spanish resort city to prohibit renting apartments to tourists

Palma, the Spanish resort city in the Mediterranean island of Majorca, has adopted a restriction that apartment will be not allowed to rent their apartments to travellers, becoming the first place in Spain to introduce such a ban.

Supreme Court of Justice views Kristovskis’ claim against Ventspils City Council

On 25 April, the Administrative Cases Department of the Supreme Court of Justice will be viewing two claims submitted by Ventspils City Council deputy Ģirts Valdis Kristovskis against the city council. «The fact that the case will be viewed verbally and that the defendants include Ventspils City Council, EPRDM and Association of Local Governments is considered unique and unprecedented in Latvia’s court practice,» says Kristovskis.

Messaging app Whatsapp not to be available to under-16s in EU

The smartphone messaging app Whatsapp plans to raise the minimum age limit to its European Union users from 13 to 16 years, as it is adjusting its rules of use to the upcoming EU data privacy regulations.

Saeima speaker in Tallinn: EU and NATO cooperation in defence should be enhanced

Close cooperation between European Union and NATO in defence is now more important than ever. This is especially true for cyber security and hybrid-thread prevention, said Latvian Saeima’s speaker Ināra Mūrniece during a meeting of EU member states parliaments in Tallinn on Tuesday, 24 April.

Ministry avoids going against supporting parties; Ventspils City Council’s violations reported to court

Environment Protection and Regional Development Ministry has no influence at all, and sometimes it seems it has no desire to exercise its rights and perform its duties. This situation most likely appeared because the institution is led by a minister who represents a specific political party.

Warfare in Ukraine escalates, soldiers wounded

In the Donbas War that continues for the fifth year in the Ukrainian regions of Luhansk and Donetsk, Russian hybrid forces have this week conducted a total of 44 attacks, wounding five soldiers, the Ukrainian military reports.

Demand for mortgage loans grew 53% in March

Increased demand for mortgage loans with state guarantees was observed in Latvia in March. Nearly every other loan application filed last month was intended for housing purchase using Altum guarantee. The largest amount of interest came from families with children, as reported by Citadele Bank.