The strategy team at Danish online trading specialist
Saxo Bank have released quarterly outlook, revealing the bank is negative on equities and emerging markets and more optimistic about FX trading.

In the last two months the Saxo Bank Global Business Cycle Indicator has declined at a slower rate, suggesting that 2009 World GDP per Capita growth will be around -2.5 per cent. The slowdown is hitting export orientated countries such as
Japan,
Germany and

China, particularly hard and will lead to severe recessions with leading indicators giving no hope for a nearby recovery.

The team still believes that writedowns from
Eastern Europe and Chinese deceleration will be the primary drivers for negative growth and deflation for the rest of the year. Fix your borrowing costs now, if possible

The bank remains negative on equities, since its base scenario for the economy is deflation, it does not find equities cheap right now.

On FX, the bank notes main theme this quarter has been competitive devaluation, which was kicked off when the Bank of England announced its debt monetization policies. It calls sterling the biggest "winner" in the race to the bottom. The

UK has a terrible fiscal position and is therefore one of the least able to afford the massive stimulus efforts it has announced. But it says the pound is now so cheap that the

UK is incredibly competitive and when things stabilise, perhaps later this year, the pound could be in for a rebound.

“The logical destination of the US quantitative easing policy will be that the central banks will end up owning all its government's debt in order for the QE policy to work. The worst case scenario will be a destruction of the private capital market for sovereign debt. The best case scenario will have no effect,” said
David Karsbol, Chief Economist at Saxo Bank.

Saxo Bank enables clients to trade Forex, CFDs, Stocks, Futures, Options and other derivatives, as well as providing portfolio management via SaxoWebTrader and SaxoTrader, the leading online trading platforms. The bank has clients in over 180 countries. It is headquartered in
Copenhagen with offices in the
UK,
France,
Switzerland,
Singapore,
Spain,
Australia and

Japan.