This year unfolded with a fair share of surprises for many actors across financial markets, although perhaps this should not come as too much of a shock; if there is one predictable thing about the market it is that it is unpredictable.
Saxo Bank has tapped into this unpredictable with its annual ‘outrageous predictions’ for the year ahead, looking into its crystal ball and forecasting wild events (some of which have come true).
Trump administration blows up the US dollar
Donald Trump will be given the keys to the White House for the second time in January 2025. Saxo predicts Trump’s administration will initiate a sweeping overhaul of US trade and fiscal policies, significantly reshaping global economic dynamics. Massive tariffs are imposed on imports, aiming to recalibrate trade imbalances, while slashing deficits with the help of an Elon Musk-run Department of Government Efficiency (DOGE),’ the report says.
The ‘implications for the US dollar are dire for trade around the world, as it cuts off the needed supply of dollars to keep the wheels of the global USD system turning, ironically risking a powerful spike higher in the US dollar,’ the prediction warns.
Nvidia becomes the most profitable company of all time
This year has seen Nvidia establishing itself even further as the leading artificial intelligence (AI) chipmaker and central figure in the AI market. While the tech giant has already overtaken Apple and Microsoft this year in becoming the most valuable company in the world, Saxo predicts even bigger things for the future.
Nvidia’s success could be ‘supercharged further with the availability in the volume of its revolutionary 208-billion transistor Blackwell chip,’ Saxo suggests. The scenario would see Nvidia’s worth increasing to twice that of Apple to become the ‘most profitable company of all time.’
[See also: Where to invest in 2025]
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China unleashes £5.5 trillion stimulus to reflate economy
The question of whether China has officially entered a ‘balance sheet recession’ or not has been asked several times this year. While answers diverge on the nature of the economic decline, it is clear that the country is experiencing a deepening economic slowdown.
Could China make a ‘bold bet’ that China could make to reinvigorate its economy? Saxo predicts it might.
‘Much of the spending goes directly into consumers’ pockets via e-CNY digital currency, so that it will be injected straight into the economy rather than to pay off debt,’ the prediction goes.
Chinese companies may reduce working hours to improve quality of life, the bank forecasts, boosting leisure time, consumption, company formation and family time.
[See also: Why ‘yes, but’ is the story behind our economic outlook]
First bio-printed human heart reshapes healthcare industry
2024 saw some significant medical breakthroughs, from the first successful pig-to-human transplant to significant advances in Alzheimer-diagnosis blood tests, and, 2025 could build on these expectations, says Saxo.
Next year researchers could bio-print a fully functional human heart using 3D bioprinting technology, an advancement that would reshape the healthcare industry through a surge in innovation and investment and could lead to improved patient outcomes and significant economic growth. Watch this space.
Electrification boom ends OPEC
The production and adoption of electric vehicles has grown exponentially in the past decade, with China clearly leading the way. According to Saxo, the electric vehicles market share of new car sales in China had reached more than 45 per cent by September 2024.
The firm sees an even brighter future for electric vehicles all over the world, to the point where the demand for oil would decrease so much that it would make OPEC irrelevant. Not only that, but Saxo’s scenario also stipulates in-fighting amongst members of the oil cartel, which would leave the group ‘to the ash heap of history’ and drive ‘a large drop in oil prices.’
AI data centres’ power consumption causes soaring utility bills
AI data centres, the facilities designed to deploy the resources needed for AI models, have been under increasing demand in 2024. And with the ubiquity of AI applications, the trend is unlikely to change next year.
As Saxo’s report puts it, the ‘AI revolution is a power-hungry one,’ and AI data centres require enormous electricity supplies. This means that 2025 could see US power prices spike higher in several populated US areas and utility bills skyrocket for households. This could also lead to authorities ‘slapping huge taxes and even fines’ on data centres ‘in a move to subsidise lower power prices for households.’
[See also: Investors demand AI-driven growth in 2025]
A natural disaster bankrupts a large insurance company
Between deadly floods and catastrophic hurricanes, the past year has seen extreme weather conditions around the globe. Saxo predicts another natural disaster in the US could catch the insurance industry unprepared, and inflict ‘damage stretching into many multiples of the $ 40 billion in claims linked to Hurricane Katrina in 2005.’
This would spread panic across the entire industry and cause a crisis that would prompt ‘government-level discussions on whether to bail out the failing company’.
[See also: How to protect assets in an evolving threat landscape]
Pound erases post-Brexit discounts versus the Euro
As outrageous as Saxo’s predictions might seem, some of them have come true in the past. The last prediction for 2025, in fact, might turn out to be true even before the new year begins, as only a week after it was published, sterling reached near its highest level against the euro since the 2016 Brexit vote, when the pound plunged overnight.
‘Fresh fiscal policy winds […]’ in the UK, driving sterling back to levels versus the Euro not seen since before Brexit,’ erasing its entire post-2016 discount, the bank had forecast.
In its hopeful prediction for the UK, Saxo mentions the new UK Labour government, with its ‘budget priorities […] that avoided the most growth-damaging types of tax hikes on income, while trimming the least productive public sector spending.’
