Saxo Bank has released its latest set of disruptive market forecasts for 2025, detailing what it terms “outrageous predictions” that aim to stimulate discourse around evolving economic landscapes. These predictions, although not representative of Saxo's official views, highlight major trends and potential market shifts that could influence business practices across several sectors.
One of the forecasts identifies a remarkable rebound for the pound sterling, which Saxo suggests will erase its depreciation relative to the euro, trading at 1.27, a level it last reached before the Brexit referendum in 2016. John Hardy, Saxo's chief macro strategist, commented on this projection, stating, “The UK outlook is as constructive as ever in the post-Brexit era.” He pointed towards fresh fiscal policies from a potential new UK Labour government that avoids damaging tax increases while aiming to reduce less productive public spending. If realised, this scenario could encourage increased domestic investment and contribute positively to the growth outlook for the UK, impacting indices such as the FTSE 100.
In the realm of technology, Nvidia is predicted to see its market value soar, potentially reaching twice that of Apple by 2025. The company's valuation has already grown significantly, and due to the escalating competition in artificial intelligence (AI), its chip products are expected to be in heightened demand. Hardy remarked on Nvidia's position in the market, indicating that “the insatiable demand for the more powerful and yet less power-hungry Blackwell chips” could elevate its share prices from approximately $139 to “well north” of $250. This anticipated growth raises questions about the sustainability of such valuations and the regulatory scrutiny Nvidia may face regarding its market dominance.
Saxo's predictions extend into the geopolitical realm, forecasting substantial shifts in the value of the US dollar in 2025 under a hypothetical second Trump administration. Proposed policies may include significant tariffs, a reevaluation of international relations, and drastic cuts in government spending alongside tax reductions for the wealthy. Hardy stated that this could drastically reduce the supply of dollars necessary for global trade, potentially leading to a 20 per cent depreciation against major currencies and a 30 per cent drop in relation to gold. This predicted scenario could also bolster the cryptocurrency market due to a projected quadrupling in its total value.
Finally, the report anticipates that power prices in the US will surge as technology giants, referred to as the Magnificent Seven, strive to secure electricity for their AI data centres. This could prompt local authorities to implement significant taxes on these data centres, aiming to mitigate public outrage over rising energy bills. As Hardy explained, this situation might lead to a notable increase in long-term natural gas prices, contributing to a more inflationary outlook for the US economy.
These predictions from Saxo Bank illuminate various factors that could significantly impact businesses and their operational environments in the coming years, highlighting the interplay between politics, technology, and market dynamics in shaping future business practices.
Source: Noah Wire Services