JEDDAH: Saxo Bank, the online multi-asset trading and investment specialist, has released its annual set of “Outrageous Predictions” for the year ahead. These are 10 unlikely, yet perhaps underappreciated, events that could have significant consequences on the financial landscape as we venture into 2016.

As ever, the predictions span the length and breadth of markets and geographies; ranging from oil making a drastic return to $100 a barrel to Silicon Valley’s much vaunted unicorns returning to myth. Other claims include the Russian ruble rising 20 percent versus the US dollar/euro basket, the Olympics turbo-charging a Brazilian recovery and a meltdown in corporate bonds.

Steen Jakobsen, chief economist at Saxo Bank, commented: “We are nearing the end of the paradigm paralysis that has dominated the policy response to the global financial crisis. Quantitative easing and other forms of intervention have failed. China is transitioning, and geopolitical tensions are as complex as ever. The marginal cost of money is rising, and so is volatility and uncertainty. It is against this backdrop we have set this year’s predictions.”

“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,” added Jakobsen.

The prediction that oil could rise toward the $100/barrel mark as OPEC responds to an accelerated slowdown in non-OPEC production with its own downward adjustment in output could prove particularly timely for Gulf states, added Jakobsen.

“An oil price back above 100$ is outrageous in this part of the commodity cycle, but a combination of Increased geopolitical risk, better 2016 demand and significant slow down in Capex in the US could make it possible.

Energy consumption continues to expand and the 2015 focus on the supply of oil could easily change to a focus on demand as the US dollar weakens post Fed's hike,” said Jakobsen.

Some of Saxo Bank’s Outrageous

Predictions 2016

• OPEC turmoil triggers brief return to $100 a barrel oil

OPEC’s crude oil basket price drops to the lowest since 2009 and unease among weaker as well as wealthier members of the prganization 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 a barrel prices onto the horizon.

• Silver breaks golden shackles to rally 33 percent

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 realization 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.