In Sweden the National Debt Office will present a new borrowing forecast for 2015-16 on Wednesday. Just looking at the monthly borrowing numbers since the previous forecast was released (June), the state budget has in fact been stronger than projected. It is, however, difficult to assess if and to what extent the DO at this stage decides to factor in higher migration costs for the state.
In Norway the calendar is empty this week. In respect of EUR/NOK we think that the short-term risks remain skewed to the upside as markets have priced out the probability of another Norges Bank rate cut in 2015 and as we approach year-end when NOK liquidity tends to worsen.
In Denmark the main event will be the launch of a new '2Y' benchmark bond - DGB 0.25% 11/18 on Wednesday 21 October by the Danish Debt Management Office. The DMO will tap up to DKK5bn. We expect the new bond to be priced very close to the yield curve and the new issue premium is likely to be very modest - at most 1bp.
There should be ample demand from Danish domestic investors needing high quality liquid assets (HQLA ) for their liquidity portfolios such as domestic banks as well as investors switching out of DGB 2.5% '16 and DGB 4% '17. On top of this, there is a significant reinvestment need given redemptions and coupons on 15 November.
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