Divergent Macro And Central Bank Outlook For Norway And Sweden In 2018
Danske Markets | Jan 08, 2018 02:06AM ET
Last week, we published our Nordic Outlook. Noteworthy, is that we revised down our growth forecast for Sweden based on the weakness in housing investments due to the housing market outlook. In Norway , on the other hand, we see renewed growth momentum. The housing market is stabilising and oil investments are picking up again. We do not expect the Riksbank to hike rates in 2018, whereas we see Norges Bank hiking in December.
In respect of our market view, we reiterate our open FI and FX trades that fit very well with the divergent macro and central bank outlook between Sweden and Finland outlined in Nordic Outlook. In our Danske Bank 2018 FI Top trades, we recommended to receive to receive SEK 1y1y vs paying NOK 5y5y both vs EUR. In this strategy, we recommended to receive SEK Mar 19 FRA vs paying NOK MAR 19 FRA. In our FX 2018 Top Trades, we recommended to buy NOK/SEK and to be short EUR/NOK via a 3M bearish seagull.
This week, all eyes will be on the December inflation data from both Sweden, Norway and Denmark. Again, the numbers are expected to confirm the divergence between Sweden and Norway. In Sweden , we expect CPIF at 1.7%, one tenth below the Riksbank expectations and in Norway expect a rebound from 1.0% in November to 1.2% for core-inflation (CPI-ATE).
In Sweden , we also have Riksbank Minutes and they might reveal a discussion on property prices and the importance that Board members attach to recent developments and the possible implication for both growth and inflation. In Norway , we also estimate an increase in industrial production of 0.5% m/m in November, taking the annual rate of growth to 2.3% - its highest level since March 2015.
In Denmark , we expect inflation unchanged from November at 0.0% m/m and 1.3% y/y.
To read the entire report Please click on the pdf File Below:
Divergent Macro And Central Bank Outlook For Norway And Sweden In 20
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.