- OutrageOus PredictiOns 2013 -- OutrageOus PredictiOns 2013 -
DAX PluNgES 33 PErCENT TO 5,000
The eadin geman stock maket index DAX was one of the wod’s best pefomin stock makets in 2012 asEope’s economic jenat contined to fae bette than most Eozone conties, despite the cisis on thecontinent and weake activity in China. This wi a chane in 2013 as China’s economic sowdown contines,theeby pttin a hat to gemany’s indstia expansion. This cases ae pice decines in indstia stocksde to stanatin evene and decinin pots at majo indsty payes sch as Siemens, BASF and Daime.This maket stess deates consme condence and as a est domestic demand, hihihted by weak etaisaes. With domestic demand faiin to offset weakenin expots, appova atins fo Chanceo AneaMeke pne ahead of the geman eection in the thid ate, and timatey the deteioated economicsitation obstcts he e-eection attempt. With a weak economy and ncetainty abot a new ovenment,the DAX index decines to 5,000, down 33 pecent fo the yea.
NATIONAlISATION OF MAJOr JAPANESE ElECTrONICS COMPANIES
Japan’s eectonics indsty, once the oy of the ‘land of the risin Sn’, entes a temina phase afte be
in otmatched by the oain Soth Koean eectonics indsty, with Samsn the winne. The coe diveof the indsty’s decine is a too domesticay oiented appoach which has ed to a hih xed cost base deto Japan’s exteme ivin costs, pensions and the ston yen. With combined osses of uSD 30 biion in theast tweve months endin Septembe 30, 2012, fo Shap, Panasonic and Sony combined, ceditwothinessdeteioates eaty and the Japanese ovenment nationaises the eectonics indsty in déjà-v stye - simiato the ovenment baiot of the uS atomobie indsty. Thee has been no nomina owth in Japan’s ossdomestic podct in eiht ot of the ast 16 yeas and as a conseence of the baiots, the Bank of Japanfomaises nomina gDP taetin. The BoJ expands its baance sheet to amost 50 pecent of nomina gDP tosp ination and weaken the yen. As a est, uSDJPY oes to 90.
SOYBEANS TO rISE BY 50 PErCENT
Bad weathe din 2012 cased havoc to oba cop podction and we fea this wi contine to pay annwanted oe din the 2013 pantin and owin season. The uS soybean endin stock, which impovedsihty timo 2012, is sti pecaiosy tiht at a nine-yea ow. This tihtness eaves the pice of new copsoybeans, istated by the Janay 2014 contact on Chicao Boad of Tade ftes, exposed to any newweathe disptions, eithe in the uS o Soth Ameica (which is now the wod’s aest podcin eion)o in China (the wod’s aest consme and biest impote). Inceased demand fo biofe, in this casesoybean oi to cove biodiese mandates, wi aso pay its pat in exposin the pice to spikes shod woiesabot sppy esface. Specative investos, who edced thei soy secto expose by two-thids towadsthe end of 2012, wi be eady to e-ente and this combination of technica and fndamenta byin codpotentiay psh the pice hihe by as mch as 50 pecent.
gOlD COrrECTS TO uSD 1,200 PEr OuNCE
The stenth of the uS economic ecovey in 2013 spises the maket and especiay nancia investos inod, who in ecent yeas have come to dominate the maket theeby makin the yeow meta extemeysensitive to expectations fo the oba inteest ate envionment. The chaned otook fo the uS economycombined with a ack of pick-p in physica demand fo the pecios meta fom China and India, whichboth ste with weak owth and isin nempoyment, tie a majo ond of od iidation. This ispaticay a est of the uS Fedea reseve’s decision to edce o competey cease fthe pchases ofmotae and teasy bonds. Hede fnds move to the se side and once the impotant uSD 1,500 eveis boken a massive ond of on iidation foows, especiay by investos in Exchane Taded Fnds whohave been accmatin ecod hodins of od. god smps to uSD 1,200 befoe centa banks, especiayin emein economies, eventay step in to take advantae of owe pices.
WTI CruDE HITS uSD 50
uS eney podction contines to ise beyond expectations, pimaiy boht abot by advanced podctiontechnies, sch as in the shae oi secto. uS podction of West Texas Intemediate cde oi ises stonyand with inventoy eves aeady at a 30-yea hih and expot options imited, WTI cde oi pices comende enewed sein pesse and smp towads uSD 50 pe bae. Weake than expected oba owthcomponds this pocess tiein a spise dop in oba consmption of oi and the pice of Bent Cde,the oba benchmak. The sppy side, ed by the Oanization of the Petoem Expotin Conties and rs
sia, eacts too ate to this chaene as its membes - despeate fo evenes to pay fo eve inceasin pbicexpendite - hesitate to edce podction, so the sppy t ises even fthe.
OLE S. HANSEN
SENIOr COMMODITY STrATEgIST