{"id":8409,"date":"2015-05-23T12:12:26","date_gmt":"2015-05-23T17:12:26","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8409"},"modified":"2015-05-23T12:12:26","modified_gmt":"2015-05-23T17:12:26","slug":"steens-chronicle-the-best-of-times-the-worst-of-times","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8409","title":{"rendered":"Steen&#8217;s Chronicle: The best of times, the worst of times"},"content":{"rendered":"<div>\n<div>\n<h3 class=\"title tf-title header-large bold\"><a href=\"https:\/\/www.tradingfloor.com\/posts\/steens-chronicle-the-best-of-times-the-worst-of-times-4905342\" target=\"_blank\">Steen&#8217;s Chronicle: The best of times, the worst of times<\/a><\/h3>\n<\/div>\n<ul>\n<li>Significant changes to our JABA model&#8217;s long-term outlook<\/li>\n<li>Inopportune rise in gold and energy prices expected<\/li>\n<li>Commodities will outperform and yields will add another 100 bps<\/li>\n<li>Europe will suffer downturn and the US will flirt with recession in 2016<\/li>\n<\/ul>\n<div><img decoding=\"async\" class=\"popup-image\" src=\"https:\/\/www.tradingfloor.com\/images\/article\/max608w\/cbe146e5-5484-4c8b-88d2-652d83fca64d.jpg\" alt=\"c\" data-original-image=\"\/images\/article\/original\/cbe146e5-5484-4c8b-88d2-652d83fca64d.jpg\" \/><\/p>\n<div class=\"ddd\">\u00a0<a href=\"https:\/\/www.tradingfloor.com\/commodities\/gold\">Gold\u00a0<\/a>is one of those items that should outperform over the longer term. Photo: iStock<\/div>\n<\/div>\n<div><\/div>\n<div>Saxo Bank\u2019s JABA model rarely makes significant changes to its long-term outlook, but this quarter is different. Not only do we expect a steep increase in yields but higher gold and energy prices too.<\/div>\n<\/div>\n<div>\nThe dynamics at work are plenty: The model\u2019s predictions are always based on the lead-lag of different economic factors. Think of each economic data point, each market price as having its own Sinus curve. Once in a while this multitude of Sinus curves moves in the one direction and this time it\u2019s upwards in the second half of 2015.<\/div>\n<div>\nThe biggest \u201cnews\u201d is that we are very close to the\u00a0secular\u00a0low in interest rates globally. This will have material impact on stocks, fixed income and asset allocation over the coming one to five years, and probably an \u201cupside-down\u201d return profile relative to performance since the financial crisis started.\u00a0<a href=\"https:\/\/www.tradingfloor.com\/subjects\/energy-commodities\">Commodities\u00a0<\/a>will outperform and yields will move up by another 100 bps before<a href=\"https:\/\/www.tradingfloor.com\/places\/europe\">Europe\u00a0<\/a>once again slides to downturn and\u00a0<a href=\"https:\/\/www.tradingfloor.com\/places\/united-states\">the US<\/a>\u00a0flirts with recession in early 2016.<\/div>\n<div><\/div>\n<div>The headlines for the next 6-7 months say:<\/div>\n<div>\n<ul>\n<li>US, German and EU core government bonds will be 100 bps higher by and in Q4 before making its final new low in H1 2016. US 10-year yield will trade above 3.0% and Bunds above 1.25%<\/li>\n<li>Energy:\u00a0<a href=\"https:\/\/www.tradingfloor.com\/subjects\/wti-crude-oil\">WTI crude\u00a0<\/a>will hit US $70-80\/barrel, setting up excellent energy returns.<\/li>\n<li><a href=\"https:\/\/www.tradingfloor.com\/currencies\/usd\">US dollar\u00a0<\/a>will weaken to EUR1.18\/1.20 before retest of lows and then start multi-year weakness.<\/li>\n<li><a href=\"https:\/\/www.tradingfloor.com\/commodities\/gold\">Gold\u00a0<\/a>will be the best performer in commodity-led rally. We see 1425\/35 by year-end.<\/li>\n<\/ul>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Steen&#8217;s Chronicle: The best of times, the worst of times Significant changes to our JABA model&#8217;s long-term outlook Inopportune rise in gold and energy prices expected Commodities will outperform and yields will add another 100 bps Europe will suffer downturn and the US will flirt with recession in 2016 \u00a0Gold\u00a0is one of those items that [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[88,151,184,374,1264,703,748,839],"class_list":["post-8409","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bonds","tag-commodities","tag-crude-oil","tag-gold","tag-recession","tag-saxo-bank","tag-steen-jakobsen","tag-us-dollar"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8409","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8409"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8409\/revisions"}],"predecessor-version":[{"id":8410,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8409\/revisions\/8410"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}