Scandi Markets Ahead
Danske Markets | Jan 14, 2018 04:51AM ET
We have for the past couple of months argued for a divergent growth, inflation and central bank outlook for Sweden and Norway. See for example , we recommended to buy NOK/SEK and to be short EUR/NOK via a 3M bearish seagull.
Over the past week, all eyes were on the inflation data in Scandinavia. In Sweden, the three main inflation measures all came in one tenth below the Riksbank forecast, whereas core inflation in Norway rose from 1.0% in November to 1.4% in December. It was one tenth above the Norges Bank forecast and two-tenths above the consensus forecast. We still argue that inflation in Sweden is set to surprise on the downside in 2018 and delay rate hikes from the Riksbank into 2019, whereas inflation should be high enough in Norway to trigger a rate hike in late 2018.
This week is very quiet in the Scandi space. The main event will be the Swedish December HOX residential property price readings. Our indicator suggests another 2.6% fall in Stockholm flat prices, which would bring the overall decline since August 2017 to around 12%. We expect other regions in Sweden gradually to approach about the same size of price correction. We also have the real private consumption indicator in Sweden.
In Norway, we have Norges Banks lending survey . We will focus on whether banks will signal further tightening of their credit practices, as this would fuel uncertainty. However, we have not had a sniff of any plans in this direction and it seems unlikely with the housing market now beginning to show signs of stabilising.
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.