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Government Bond Auctions And GDP Figures From Denmark And Sweden

Published 02/29/2016, 04:15 AM
Updated 05/14/2017, 06:45 AM

Monday sees the main Swedish statistical release: Q4 15 GDP. We expect another strong print (+0.7 %q/q, 3.4 %y/y), driven mainly by domestic sectors. Due to strong migration, housing construction is likely to show solid growth and an improving labour market suggests to us that private consumption growth has remained resilient.

Swedish Feb manufacturing PMI is likely to follow its German counterpart. Swedish PMI is currently at a quite elevated level - possibly due to the benefits of the weak SEK - but should not be able to escape the negative impact of weakening core export markets.

The Swedish debt office will tap SEK2bn in both the Nov-23 (1057) and the Nov-26 (1059) bond on Wednesday. Given the lower funding need, more QE from the Riksbank and a very steep Swedish curve, we still see value in 5Y and 10Y SGBs.

Norwegian retail sales have been highly volatile over the past 18 months but the trend since Easter 2015 seems to have been more or less sideways. Following a fall of 1.3% m/m in December, we expect a minor positive correction in January and predict a rise of 0.7% m/m. The week also brings February PMI data. Although volatile from month to month, the PMI has trended up since August and pointed to a slightly slower decline in industrial activity.

We expect the Norwegian debt office to tap in the 10Y on Wednesday. Demand was lacklustre at the inaugural auction.

We get Danish GDP figures for Q4 15 on Monday. We estimate GDP growth of 0.6% for Q4 after a 0.4% contraction in Q3. On Tuesday, Danmarks Nationalbank will publish currency reserves data for February. Following the central bank raising its key rate in January, the outflow of currency fell to its lowest since March 2015 and it will be exciting to see whether this continued in February.

The Danish Debt Office will tap in the 2Y and 10Y benchmark bonds on Wednesday.

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