The hallmark Outrageous Predictions of multi-asset specialist Saxo Bank will be out next week. The provocative publication has never been about being right – it has always been about being outrageous. Still, sometimes the predictions become true.

Saxo Bank has checked its archives to find out which Outrageous Predictions from the past were much closer to the truth than anticipated.

“All large market moves are driven by something that surprises expectations – sometimes outrageously. Crystal gazing with this in mind is the core of our annual Outrageous Predictions, as we try to suggest what events that seem unlikely right now could unfold and cause outrage in our world and financial markets – and provoke you to think differently along the way,” says John J. Hardy, Head of FX strategy in Saxo.

“Our Outrageous Predictions are not our baseline forecasts for what will happen in the New Year. Rather, they are meant as an exercise in provoking thought on what unanticipated developments can shock our world and financial markets,” says Hardy.

• 2013 Outrageous Prediction: Gold corrects to USD 1,200 per ounce

“Our $1,200 call, at the time of writing, signaled a one-third drop in the price,” says Head of Commodity Strategy, Ole S. Hansen who, in 2013, had the first correct Outrageous Prediction.

Here’s what he had to say about it: “Gold corrected to and actually went below USD 1,200 per ounce in 2013, as investors increasingly turned their attention to stocks and the dollar as central banks supported a post-GFC recovery in global growth. A major trigger was the April 2013 break below key support at $1,525 – a move that in our mind raised the risk of a bear market taking the price down towards $1,100,” says Hansen.

• 2015 Outrageous Prediction: Brexit in 2017

In the Outrageous Predictions for 2015, Saxo’s Strats wrote that the UK Independence Party (UKIP) would win 25% of the national vote in Britain’s general election on 7 May, 2015, sensationally becoming the third largest party in parliament. UKIP would then join David Cameron’s Conservatives in a coalition government and calls for the planned referendum on Britain’s membership of the EU in 2017. UK government debt suffers a sharp rise in yields.

The timing was a bit off, but the circumstances around it were pretty accurate. “We had a very strong sense that ‘protest votes’ would be coming both in the US election and also ultimately in a vote on Brexit” said Steen Jakobsen, CIO at Saxo.“We, to some extent, correctly talked about the ‘social-contract being broken’ – meaning society no longer benefitted as a whole with monetary policy, creating increased gap in equality.

“This call was too early, but context and reasoning was spot on. The split in the Tory Party could not be healed and the modus operandi of ‘Talking down to the voters’ was blatant mistake, which we used for this call.”

• 2017 Outrageous Prediction: Huge gains for Bitcoin as the cryptocurrencies rise

As cryptocurrencies, particularly Bitcoin, began to gather momentum in the public eye, Saxo’s Strats predicted that the then leading currency would have a huge bump in value. The rationale behind the jump was justified by the Trump regime overspending, causing high national debt to rise and inflation to skyrocket. Combining this with the global public wanting to break away from the currencies of central banks, Bitcoin would become a preferred alternative. The Outrageous Prediction ended up coming to fruition and more, with the price of Bitcoin growing to almost USD 20K at its 2017 peak.

However, the circumstances around the prediction weren’t entirely correct for the time. It wasn’t as much due to the macroeconomic movements of the Trump era, but rather the speculation around Bitcoin that fueled its initial meteoric rise. However, when looking at the more recent spikes in cryptocurrencies, particularly Bitcoin in 2021, the justifications outlined in the 2017 Outrageous Prediction held true.

• 2018 Outrageous Prediction: Volatility spikes after flash crash in stock markets

“We did not get a 25% drop in a single 1987-like event, but we did get two dramatic events in 2018 that vindicated our point,” says Peter Garnry, Head of equity strategy.

He further explains how the prediction came about: “We got the idea about this Outrageous Prediction in late 2017, as the year was about to end with astonishingly low volatility and Bitcoin had gone from just below $1,000 in late 2016 to around $10,000 in November 2017 (Bitcoin eventually rose to almost $20,000 before year end). Everyone speculated in Bitcoin and selling volatility in currencies and equities were heralded as easy predictable money. That’s where we got this super awkward feeling from that the entire euphoria and these types of positions can have dramatic outcomes if conditions change even the slightest.”

• 2022 Outrageous Prediction: The plan to end fossil fuels gets a rain check

Ole S. Hansen, Head of Commodity Strategy, wrote that policymakers would kick climate targets down the road and support fossil fuel investment to fight inflation and the risk of social unrest, while rethinking the path to a low-carbon future.

“Lack of investments and an increasingly urgent need to support gas over coal led us to come up with the ‘The plan to end fossil fuels gets a rain check’ which basically envisaged a more investor friendly environment for (up until then) shamed investment in so-called ‘dirty energy production. A move that supported a decision by the EU to classify gas and nuclear as green investments,” he says.

Not all of Saxo Strats’ predictions come true, but they are guaranteed to be Outrageous. If you want to read what Saxo has to say about 2023, be sure to check back with Saxo on December 6, 2022.