Investing.com - Financial Markets Worldwide

Norges Bank In Focus And Swedish Inflation Bottoming Out‏

ByDanske Markets
Published 09/16/2013, 07:12 AM
Updated 05/14/2017, 06:45 AM
EUR/NOK
-
New research from Danske Bank Markets

The main event in the Scandi market this week will be the Norges Bank meeting. Given the recent rise in inflation and weakening of the NOK focus is on changes to the rate path. Although we expect an upward revision to the rate path we argue that market pricing in the front-end of the Norwegian curve has become too stretched, and we recommend to sell NOK FRA's ahead of the release.

We do not believe that the stretched pricing in the Norwegian money market has been reflected in EUR/NOK and we continue to hold the view that the cross will edge lower towards 7.70 over the next three months, and we still like to sell EUR/NOK on upticks. However, if we see a set-back in NOK rates the NOK might also suffer at least short-term.

Last week inflation took the limelight in the Scandi markets. Inflation surprised strongly to the upside in Norway, but remained low in both Denmark and Sweden. However, we argue it is just a matter of time before not least Swedish core inflation will pick-up. Our forecast for Swedish core inflation is well above the Riksbank forecast over the next six to nine months. Also in Denmark we argue that inflation is at a turning point, and that it will head higher towards the end of the year.

This week Sweden will tap the SGB1052 (the 5Y benchmark), and Denmark will tap the 10Y nominal bond as well as the 10Y linker. The DKK linker looks quite attractive given the current low BEI level both in a historical context and versus Germany.

To Read the Entire Report Please Click on the pdf File Below.

Latest comments

Loading next article…
Install Our App
Risk Disclosure: 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.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.