Quarterly Outlook: Cold Front Approaching Western Economies Print
Long Term Forecasts | Written by Saxo Bank | Oct 18 10 07:57 GMT

Quarterly Outlook: Cold Front Approaching Western Economies

Quantitative easing on a scale never seen before, vast government stimulus programmes, and record public deficits almost everywhere you look. Any imaginable tool has been tried out in an attempt to put to rest the worst recession since World War II, but so far nothing has worked.

While central banks are debating whether they should do more of the same, leading indicators of economic activity have taken a turn for the worse. That deterioration will soon translate into actual economic weakness and will in the case of the Eurozone be magnified by the austerity measures forced upon the governments by the credit market. Risk remains complacent for now, but an economic cold front is approaching. Equities are at the high of our range call while we look for gold to power through the 1,300 level. The USD and EUR should gain on the pro-risk currencies with the dollar taking the forefront.

This fourth quarter Outlook for the global economy is a short analysis examining the global economic outlook for the forthcoming quarter. The quarterly Outlook will be followed by our list of Black Swan events, the annual 10 Outrageous Predictions, in December 2010, and Saxo Bank's Yearly Outlook in January 2011.

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