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Saturday 20.01.2018 | Name days: Aļģirds, Orests, Oļģerts, Alģis

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: the most important reform has to happen in people’s heads

«Of all the clever things taught to us in school about psychology, one thing that has stuck with me over the years is the idea of internal/external control point. There are people who believe they make their own fate. There are also people who believe our fate depends on external powers. I suspect people in Latvia explain successes and failures with external factors much more than people in Switzerland or any other country that has enjoyed its freedom longer than Latvia,» comments Luminor Bank’s economist Pēteris Strautiņš.

Minister promises bigger wages for working people and support for country’s industry

«Latvian Economy Ministry’s priorities for 2018 include increasing wages for working people and providing support to the country’s industry. For Latvia’s centenary year, every resident should have the right to experience the increase of the personal and state welfare,» promises Economy Minister Arvils Ašeradens.

Latvenergo: electricity price has declined 30% in the past three years

Average electricity price in Latvia has declined in recent years. The average price of electricity has declined by 30% at Nord Pool exchange between 2014 and 2017, allowing end user costs to decline, says Latvenergo.

Alcohol sellers in Estonia to be checked by little «police»

To find shop assistants illegally selling alcohol or tobacco to minors, Estonian police introduces the method of sending minors as police aides to retail shops to try to purchase the products banned to them.

EY study: cyber security has become a priority to banks this year

Over the course of the year, priorities of banks around the world have switched from reputation and risk management to data security matters, as concluded in the latest EY Global Banking Outlook 2018.

Political association: UGF and Harmony are covering up state capture

«Parliamentary investigation of Oligarchs case has shown what is what in the Saeima of the Republic of Latvia. Green farmers are in full harmony, covering up Aivars Lembergs and the fact of state capture. They and Inguna Sudraba have made the parliamentary investigation into a farce. Unfortunately, the power in those people’s hands is no farce – rather misfortune for all of Latvia. I hope citizens will take all that into account when they go voting,» says leader of Kustība Par! Daniels Pavļuts.

Tallinn-Helsinki tunnel plan lacks ambition, says «Angry Birds» game maker

While Finland and Estonia work on plans of an under-sea tunnel from Tallinn to Helsinki, the construction of which could start in the 2030s, a Finnish businessman, previously involved in development of Angy Birds video game, has presented plans to finish the massive construction project in 2024 already.

Experts: healthcare financing law will deny healthcare to the least protected

In a discussion regarding healthcare, experts said that Latvian President Raimonds Vējoņis’ proposed Healthcare Financing Law is economically unjustified and ineffective. The document lacks principles of a socially responsible state, because healthcare is becoming less accessible, which will likely worsen public health indexes, says Kustība Par! political party.

Branded «aggressor state», Russia says Ukraine buries Minsk peace agreements

As the Donbas War continues, the parliament of Ukraine has passed the so-called Donbas reintegration bill after three days of debates defining territories controlled by pro-Russian separatists in the east of the country as temporarily occupied by Russia.

Weather to remain winter-like in Latvia during the weekend and next week

On Friday and Saturday, no major increase of snow is expected. Air temperature will increase slightly, but colder masses of air will slow into the country on Sunday, as reported by Latvian State Environment, Geology and Meteorology Centre.

Winter storm in Netherlands and Germany turns tragic

A powerful winter storm in western and central Europe has claimed the lives of eight people.

Lithuanian bishops: skipping fasting on February 16 this year is not a sin

In an unprecedented move, the Conference of Lithuanian Bishops, the governing body of the Lithuanian Catholic Church, said that meat dishes okay for the people of faith on February 16, which marks the 100-year anniversary of Lithuania's statehood and the Lent Friday, which is traditionally a day of fasting for religious Catholic people.

Coincidence? Votes from Harmony and UGF ensure Sudraba remains the head of Oligarchs case committee

On Thursday, 18 January, the majority of Saeima members voted against the proposal to dismiss Inguna Sudraba from the post of the head of parliamentary investigative committee in charge of the review of the infamous Oligarchs case.

Kaljulaid criticised over involvement of acclaimed, but unrestrained director in centennial reception

As Estonia readies for the presidential reception to honour the 100th anniversary of Estonia, its President Kersti Kaljulaid is being criticised in an open letter for trusting Tallinn’s NO99 theatre, whose director physically assaulted a female colleague.

22.1% of Latvia’s residents subjected to risk of poverty

In 2017, 425 thousand persons or 22.1 % of Latvia population were at risk of poverty in 2016 – 0.3 percentage points less than in 2015. Equivalent income of this part of the population were below 330 euros monthly.

LAAC: Latvia’s milk market can be sorted out by joining forces in exports

Latvian Association of Agricultural Cooperatives (LAAC) has received support and praise for the public discussion regarding rapid milk procurement price changes, which is something that has recently affected the majority of agricultural cooperatives. This has helped cooperatives band together in order to sort out the milk market. This idea came from the example set by grain producer cooperatives, which did the same thing fifteen years ago, as reported by the association’s representatives.

Forevers announces its decision to exit from Latvian Federation of Food Companies

Forevers meat processing company has decided to exit from Latvian Federation of Food Companies (LFFC). The contract between two parties will be terminated in January.

Saeima’s Oligarchs case investigative committee hastily approves final report

In spite of objections, grammatical errors, criticisms about lacking effort, as well as Inguna Sudraba’s unfit status to lead the committee, members decided to move the meeting from 11:00 to 08:00 and approve the final report in a rushed vote.

Removal of 1 and 2 euro cent coins from circulation suggested by Bank of Estonia

Estonian central bank is willing to follow the eurozone trend of limiting the circulation of euro 1-cent and 2-cent coins and in time to remove them entirely from circulation in the Baltic country.

Cert.lv: attacks on e-health system and LETA were likely ordered

Attacks on e-health system and LETA agency were likely ordered, said Cert.lv deputy manager Varis Teivāns in an interview to Rīta Panorāma programme of LTV.

As Catalan parliament reconvenes, it elects pro-independence speaker

The Catalan regional parliament has in its first sitting since its ousting and snap December election elected a separatist-minded politician as its Chairman, which indicates that the attempts to break the region away from Spain would continue.

Latvia’s National Armed forces receive new Harris tactical radio equipment

In 2017, Latvia received tactical military radios worth USD 10.5 million from American Harris Corporation. Procurement of radio equipment will further improve command function and help develop a lasting communication system with other NATO member states, as reported by Latvian Defence Ministry.

MEP: Europe continues strengthening its energy independence

«The European Parliament has voiced strong support towards Europe’s energy independence and moving its energy policy away from Russia’s monopoly by investing in energy efficiency and renewable energy resources,» said MEP Krišjānis Kariņš after the vote on Clean Energy Act’s first reading in Strasbourg.

Apple expected to pay additional 38 billion USD in taxes for money kept abroad

Motivated by the U.S. tax reform, Apple will pay about 38 billion U.S. dollars (31 billion euros) in tax on the roughly 250 billion dollars (204 billion euros) the computer technology firm keeps outside of its country of origin as it plans to focus more on its contribution to the American economy.

Latvian police commenced three criminal processes for contraband of drugs this year

In the first two weeks of 2018, State Revenue Service’s Customs Police commenced three criminal processes in regards to illegal drugs contraband in postal packages from Lithuania to Latvia.

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