In Sweden, focus will be mainly on the Riksbank's monetary policy decision (Thursday, at 09.30 CET). We expect the Riksbank to lower its inflation forecast for 2015 slightly (oil price) and therefore delaying its first rate hike by another quarter to Q3 16. However, there will be no rate cut or QE (probability 60%). The next most likely outcome (40%) is that the repo rate is lowered to -15bp but still there is no QE.
The market response to unchanged rates is probably slightly higher Riba and FRA rates in the front. EUR/SEK could also move lower on the expected move in relative rates.
The Swedish debt office is coming to the market with taps in SGB 4.25% Mar '19 5y benchmark bond.
In Norway, it will be an important week with inflation figures for January, GDP data for Q4 and central bank governor Øystein Olsen's annual address. The market is no doubt anxious to see whether Olsen will send out any fresh signals about the future path of monetary policy following the steep fall in Crude Oil prices and oil investment.
We expect mainland GDP growth of 0.5% q/q in Q4, slightly higher than Norges Bank's projection of 0.35%.
In Denmark, the coming week will see a further focus on the krone's appreciation against the euro, and we will continue to keep a close eye on messages from the Nationalbank, which has said that it will use all necessary means to defend the Danish fixed-rate policy.
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