Special Scandi FX theme : The last months' move lower in both EUR/NOK and EUR/SEK have seemed slightly overdone according to short-term FX drivers - even if we think both crosses fundamentally remain overvalued.
In Sweden , the week ahead is full of interesting data and events. The Riksbank has, as usual, planned its meetings perfectly, releasing the monetary policy decision (Wednesday at 09.30 CET) and new forecasts a couple of days before the notoriously difficult January inflation outcome (published on Friday at 09.30 CET).
We expect that the Riksbank will lower the probability of a new rate cut from 6bp to 3bp. But otherwise a relatively uneventful meeting is expected.
Our CPIF forecast for January is down 0.75% m/m and up 1.58% y/y. Our forecast does not deviate meaningfully from the Riksbank's forecasts (CPIF and CPIF excluding energy) for the next few months. However, near term, there is potential upside risk from vegetables.
In Norway , the week's key event is the central bank governor's annual address. The market's strong interest in the speech is down to previous governor Svein Gjedrem having used it a couple of times to announce sea changes in monetary policy.
The truth is, though, the annual address has mostly been used to stress the need for structural reforms - in other words, put pressure on the politicians - and this has continued to be the case during Øystein Olsen's tenure.
Last week's Norwegian GDP data showed that oil investments rose for the first time in nearly three years.
In Denmark , the statistical office publishes its GDP indicator for Q4 on Wednesday. There was healthy growth in the Danish economy in the first three quarters and there is much to suggest that this continued in Q4. We predict GDP growth of 0.3% in Q4.
To read the entire report Please click on the pdf File Below