Saxo Bank, the leading online trading and investment company, has released its quarterly outlook for Q3 2025, focused on the evolving global economic and market landscape. The outlook is divided into two key perspectives: an investor outlook and a trader outlook, each highlighting significant themes and potential risks for the upcoming quarter.
Read Saxo’s Q3 outlook for 2025
1. Investor outlook: Beyond American shores – why diversification is your strongest ally
By Jacob Falkencrone, Global Head of Investment Strategy
The investor outlook focuses on the importance of diversification in the face of extreme market concentration. Key points include:
- The BABA trade: The outlook looks at the "Buy Anything But America" strategy, suggesting investors should consider diversifying beyond US equities. The Magnificent Seven technology giants dominate the S&P 500, heightening concentration risks.
- Valuation and policy challenges: US equities are historically expensive, with policy uncertainties and a weakening US dollar posing additional challenges. Emerging markets, Europe, and Japan offer attractive diversification opportunities.
- Global themes: The second wave of AI innovation and structural defence growth can become thematic investment opportunities. Europe and Japan could be the focus in these sectors.
- Sector opportunities: European equities, particularly in infrastructure, industrial equipment, and renewable energy, are highlighted for their potential growth. Japan's corporate governance reforms and emerging markets' robust domestic economies offer compelling investment prospects.
2. Trader outlook: Less chaos, and hopefully a bit more clarity
By John J. Hardy, Head of Global Macro Strategy, and Ole Hansen, Head of Commodity Strategy
The trader outlook delves into the geopolitical and economic factors shaping market dynamics. Key highlights include:
- US-China trade dynamics: The outlook discusses the balance between the US and China, focusing on rare earth metals and trade negotiations. The potential for tariffs and their impact on global growth remains a critical concern.
- Geopolitical tensions: Renewed hostilities between Iran and Israel, alongside US involvement, have significantly impacted oil markets, raising inflation fears. Saxo Bank anticipates central banks maintaining a dovish stance despite energy price spikes.
- US recession risks: The outlook predicts rising recession risks in the second half of the year, exacerbated by tariffs and anti-immigration policies. A potential AI-driven white-collar recession is also highlighted as a wildcard factor.
- Precious metals and commodities: The commodities sector is expected to perform well, driven by geopolitical risks and investment demand for tangible assets. Gold and silver are poised for continued gains amid fiscal debt concerns and US dollar weakness.
Saxo Bank's Q3 2025 outlook underscores the importance of strategic diversification and careful monitoring of geopolitical developments. Investors are encouraged to broaden their horizons and consider positioning their portfolios to benefit from shifting global investment flows and structural opportunities.
For more information on Saxo Bank's Q3 2025 market outlook, please visit Saxo Bank's website.
