The week ahead in Sweden is all about the Riksbank's monetary policy decision, due to be announced on Tuesday (at 09:30 CET), where we and most/all analysts expect a no-change vote. But it will be a relatively close call after the lower-than-expected CPI data last week. Although the previous inflation outcome definitely pushed the probabilities towards a new cut, we have chosen to stick to our recently changed call of a cut only in April (together with additional QE).
In Norway, it is an even closer call after the recent drop in oil prices. The decline in oil prices since September has, however, been substantially less than that from June to September and may not, therefore, be enough to spur the central bank into action. There is also a risk that fiscal policy will be even more expansionary than expected due to uncertainty about the cost of asylum seekers.
We therefore tentatively predict that Norges Bank will hold fire this time around but indicate a very high probability of a reduction at its meeting in March. We underline, though, there is a more or less even chance of a cut here and now.
In Denmark, there is little on the agenda in the coming week. The most interesting will be Thursday's figures for public finances in Q3 and the DMO is due to release its funding plan for 2016. We expect that the DMO will say that it plans to issue DKK75bn in 2016. The announcement is expected on Thursday.
The Danish Debt office will also tap in the 10Y DGB and the long DGB '39.
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