In Sweden , the week ahead contains the Riksbank's monetary policy decision (Wednesday at 09:30 CEST). We expect the Riksbank to stay on the sidelines. The reason of course is that inflation has developed according to plan. However, we believe that the Riksbank forthcoming meeting in October is in a different situation as it then will be clear that the inflation trend has turned down again and demands a new stimulus.
The week also offers data on services PMI (August), services and industrial production and orders and household consumption (all for July).
We recommend to sell EUR/SEK.
In Norway , the week's most important release is inflation for August on Friday. A surprisingly big jump in prices in July (core inflation of 3.7% y/y) has fuelled uncertainty about future inflation. Most, including Norges Bank, assume that inflation will slow as the impact on import prices of the krone's depreciation fades and eventually reverses, but the July figures fed fears that we are looking at the start of a price-price spiral. However, we stress that two groups of goods - food and airfares - accounted for 70% of the surprise in July and this was not down to the second-round effects of the weaker krone. Consumer prices are always associated with considerable uncertainty in August but we expect them to fall further than usual, taking the annual rate of inflation down to 3.4% and returning inflation to a normal seasonal pattern.
In Denmark , the Debt Management Office will tap the 2Y and 30Y benchmark on Wednesday. We expect to see good demand for the two bonds. There are several factors supporting the Danish bond market at the moment.
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