Saxo Bank Quarterly Outlook Q3 2010: The Crisis is not Contained

Saxo Bank Warns Investors to Remain Cautious

COPENHAGEN, July 1, 2010 - Saxo Bank, the trading and investment specialist, has launched its
economic outlook for the third quarter in 2010. It says that the crisis is
not contained and that markets will react negatively to the continuation of
the huge imbalances in government debt markets. The Bank maintains
expectations for very low policy rates in the foreseeable future, says David
Karsbol, Saxo Bank's Chief Economist.

The Bank predicts equity prices to fall based on the assumptions that a
slow-down in China seems likely, continued destabilisation in PIIGS
(Portugal, Italy, Ireland, Greece, Spain) debt markets will demand a response
from less insolvent Eurozone members and cuts to Government spending will be
draconian.

The earnings season is expected to be strong but only because of
cost-cutting activities rather than topline growth. Karsbol does not expect
inflation and topline growth any time soon. Worries about the reset of Alt-A
(Alternative A-Paper) and Option ARM (adjustable rate mortgages) in the US
and a further surge in defaults and delinquencies will also contribute to a
negative drift in equities.

Commenting on the outlook, David Karsbol, said:

"The current PIIGS debt crisis is not contained and the only way to get
rid of it is by cutting budget deficits much quicker and much more
dramatically than what is currently being done. Profligate Government
spending is crowding-out private investments and consumption, and we expect
markets to react negatively to the continuation of the huge imbalances in
government debt markets. The German budget cuts for example are a good start,
but they are not enough."

Karsbol also said:

"It's clear that macro themes have regained dominance in the equity
space. We do not expect earnings to double dip but to level out, and while we
see a short term recovery in risk as corporations are likely to report good
earnings, we simply have not come to grips with the problems laid bare by the
crisis. Volatility in FX is likely to swing sharply higher in response, so
our advice to investors is to remain cautious."

The Quarterly Outlook Q3 2010 reflects on the following areas:

General market comment

Contrary to common perception, running big deficits kills growth, and
that is especially the case in the current cash-strapped environment.
According to Saxo Bank, the market will have to worry about larger imbalances
created by continued reckless government spending, which has happened in the
sell-off in May. However, the analysts believe that there will be some
optimism linked to the strengthened corporate earnings to be announced in the
coming earnings season.

Macro forecast

In the US, the stimulus is already waning and will probably dry out in
the second half of the year. Saxo Bank thinks that there could be a negative
contribution to growth in late 2010, and investment will be subdued due to
low capacity utilisation and a residential sector which has a large overhang
of unsold properties. For Japan, Saxo Bank expects further growth, but the
pace is likely to decelerate and Japan's export-led growth will be hurt by
the Euro's weakness. Saxo Bank believes there is no doubt that too much debt
is the fundamental problem for many countries in the Eurozone, but other
imminent issues are restricting economic activity. Private spending in the
third quarter will be dragged and the soft labour market is not helping
matters.

FX Outlook

Saxo Bank suspects that the Eurozone situation and its effect on risk
appetite generally will remain important. However, the analysts also feel
that this theme is occupying far too much of the market's attention relative
to other macro themes that could come to the fore in the coming quarter, such
as commodity currency countries suffering under the weight of tremendous
housing bubbles, austerity and the new impetus towards public deleveraging,
and the growth hopes for China and Emerging Markets being up for debate.

Equity Outlook

The analysts continue to expect further hurdles for equity markets in the
second half of 2010 which will keep the risk premium higher for an extended
period and lead to lower earnings expectations for 2011 and 2012. However,
they predict bounces in equity markets as earnings are likely to surprise to
the upside.

Commodity Outlook

Risk adversity driven by worries about the level of sovereign debt and
the subsequent risk of a double dip recession will stay in the third quarter.
The analysts feel that the high for the year has already been made and that
the risk heading into the second half of 2010 points towards lower prices.
Continued dollar strength combined with the global recovery heading into slow
motion will leave the market well supplied and subsequently put downside
pressure on prices.

Policy rates

Saxo Bank's Strategy Team maintains its expectations for very low policy
rates in the foreseeable future.

About Saxo Bank

Saxo Bank is an online trading and investment specialist, enabling
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. SaxoTrader is available directly
through Saxo Bank or through one of the Bank's institutional clients. White
label is a significant business area for Saxo Bank, and involves customised
and branding the Bank's online trading platform for other financial
institutions and brokers. Saxo Bank has more than 100 white label clients and
boasts thousands of retail clients in over 180 countries. Saxo Bank is
headquartered in Copenhagen with offices in Australia, China, the Czech
Republic, France, Greece, Italy, Japan, the Netherlands, Singapore, Spain,
Switzerland, UK, and the United Arab Emirates.

    Media enquiries:
    Jeanette Nielsen, PR Manager
    +45-3977-6416
    press@saxobank.com

Media enquiries: Jeanette Nielsen, PR Manager, +45-3977-6416, press at saxobank.com