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Saxo Bank Q1 Commodity Outlook: Gold to rise to USD 1800; Emotional trading...

Investment flows will continue to be the main factor of ...

Investment flows will continue to be the main factor of support. Our upside target during 2013 remains at USD 2075 per oz but we are aware of the risk that gold poses as it has become as much of an emotional trade as a ‘QE-infinite’ one and that further price weakness will increasingly make this a pain trade as it erodes confidence among many weak longs.

Saxo Bank Q1 Equity Outlook: Mean reversion to dominate

Going into 2013 there is no doubt that you should ...

Going into 2013 there is no doubt that you should own equities. The mean reversion regime is even more pronounced in individual equities in the first quarter. The well-known strategy going into the first months of a new year is to buy last year’s losers and sell the winners. That is still the strategy in this quarter too. Some of the losers were Hewlett Packard (HPQ:xpar) and Peugeot (UG:xpar) which makes themgood mean reversion candidates. Winners like PulteGroup Inc(PHM:xnys) and Bank of America(BAC:xnys) might take some losses and are also worth taking a a look at.

ECB did as we expected and gave most markets a boost

The European Central Bank’s decision on Thursday to hold interest ...

The European Central Bank’s decision on Thursday to hold interest rates steady gave markets the fillip they had been lacking these past few days. In the immediate aftermath of the announcement, the DAX index spiked higher, SP500 futures rose and the EURUSD hit new intraday highs, approaching 1.3180.That unanimity of the rate decision plus ECB president Mario Draghi’s statement that the eurozone economy is improving, provided markets with extra support.“Draghi was essentially confirming what we already knew from data. We are seeing stabilisation in the eurozone and exports are growing, indicating that competiveness in the region is increasing,” said Saxo Bank equity strategist Peter Garnry.“If we can get through the first half of 2013 with no major bumps on the road we should see some kind of recovery to positive growth in the second half of this year, the Saxo Bank man added.Meanwhile, Thursday’s first batch of figures out of the US - initial jobless claims and continuing jobless claims – released minutes before the ECB press conference, gave positive signals about the US economy.However, the debt-ceiling debate will soon raise its head again and nervousness about the progress and outcome of discussions might mean that the stock market has already peaked.

US non farm payrolls a tad above expectations

The headline figure in the US employment report published on ...

The headline figure in the US employment report published on Friday – non-farm payrolls – came in at 155,000, revealing an increase in the number of employed Americans in December on par with the average for the last 12 months. The price of Brent crude oil rose a little as any above-expectations improvement in the US numbers raises the chance of increased growth in the US and therefore demand, Mr Hansen explained. Similarly, the better than expected 2.1 percent increase year-over-year in hourly earnings, also seen in the employment report, should provide some support going forward. “Increased earnings will be good for income and also spending in the coming months,” said Peter Ganry, Saxo Bank equity strategist.

Ole Hansen on the 2013 Trading Range for Brent Crude

Brent Crude is likely to remain in a tight trading ...

Brent Crude is likely to remain in a tight trading range for 2013, says Saxo Bank Commodities Analyst Ole Hansen. He says that Saudi Arabia has done a good job of talking the oil price to around 100, but that if the price gets too high, there is a risk of the release of oil from strategic reserves. High oil prices also lead to diminished economic activity, Hansen says.

Ole Hansen on the 2013 Trading Range for Brent Crude

Brent Crude is likely to remain in a tight trading ...

Brent Crude is likely to remain in a tight trading range for 2013, says Saxo Bank Commodities Analyst Ole Hansen. He says that Saudi Arabia has done a good job of talking the oil price to around 100, but that if the price gets too high, there is a risk of the release of oil from strategic reserves. High oil prices also lead to diminished economic activity, Hansen says.

Peter Garnry on Tuesday's ZEW figure

Saxo equity strategist Peter Garnry commments on Tuesday's better-than-expected ZEW.

Greek Eurozone exit in 6 months after Europe goes to worse place

Greece is in the midst of a negative compounding story ...

Greece is in the midst of a negative compounding story and the only relief in sight is a short to medium term break from the Eurozone within about six months’ time, says Steen Jakobsen, Chief Economist Saxo Bank.“Although I want Greece to have all the best things in the world I think ultimately it will need to do something which is outside the box,” says Steen.He believes an exit from the Eurozone within six months is a very likely scenario considering Europe’s desire to try to keep Greece alive for some time yet, particularly ahead of the upcoming German election. Until then Steen sees Europe going through some rough patches before a recovery begins in 2013.A worst place is ahead for Europe“The first quarter of next year will be the worst quarter of the debt crisis in terms of growth and the amount of headwind to austerity and the lack of ability to move to a mandate for change,” says Steen. “We will see recovery inside the next four quarters in Europe but we need to go to a worse place first.”Disintegration and desperationThe main problem for Greece is that none of the promised austerity measures have been implemented. And with no one willing to give up their entitlements this has created a negative compounding story where everything disintegrates and gets worse month by month as seen by the recent social tensions.Meanwhile, the rest of Europe is so desperate for Greece to continue as if nothing has happened and so it is very likely that within the week Greece will be paid its next tranche of financial aid in order to stay afloat, says Steen.See more ofSteen's commentary on TradingFloor.com: http://www.tradingfloor.com/traders/steen-jakobsen

Outrageous Predictions: Steen Jakobsen wants to hear from you

Saxo Bank's Outrageous Predictions are a year-end tradition. The outrageous ...

Saxo Bank's Outrageous Predictions are a year-end tradition. The outrageous predictions go out on a limb to suggest "black swans" or unlikely market events. This year, we want to hear from you. Visit TradingFloor.com/topics/outrageouspredictions to share your Outrageous Prediction with us, or Tweet it to us at @SaxoOP. We'll collect the predictions, sort them into categories and share them with the world alongside out own ten predictions, scheduled for release on December 18.

Jobless and inflation thresholds will only complicate Fed policy

In this video Saxo Bank’s Chief Economist Steen Jakobsen discusses ...

In this video Saxo Bank’s Chief Economist Steen Jakobsen discusses the ‘revolution’ in Federal Reserve Vice Chairman Janet Yellen’s recent words. She is actually the first in Federal Reserve management to indicate the possibility of moving away from a calendar outlook - i.e. a Federal Reserve on hold until 2016 – and instead opting for a combined threshold on unemployment and inflation. This actually makes things far more complicated, although the goal is to communicate more transparently, says Steen Jakobsen. It would open a can of worms in terms of the actual data to be compared and the thresholds. What kind of unemployment rate is the Fed going to use – long-term or short-term or adjusted for people with or without jobs? In terms of inflation - is it the core inflation or overall CPI inflation? If it eventuates though it will be a ‘revolution’ in that the Fed is admitting monetary policy doesn’t work. In being more communicative though the Fed is hoping that the market will adapt to the outlook the Fed has. That’s not a good solution though because according to Steen the Fed is one of the worst predictors of the future and future growth.For more comments by Steen Jakobsen see his blog Steen's Chronicle on TradingFloor.com