The two main events next week in Sweden are Prospera's quarterly inflation expectations survey and August inflation data. These are potentially strong market drivers. Our August CPIF forecast is now the same as that of the Riksbank, i.e. 0.8 % y/y. Overall, the risk picture is probably skewed to the downside, in our view. Note that we continue to argue that the Riksbank later on in 2015 and in 2016 is still too optimistic in how fast inflation will rise.
In Norway, we expect the annual rate of growth in core inflation to be unchanged at 2.6%. However, we stress that there is extreme uncertainty in August, with significant monthly fluctuations historically. But the main event might very well be the regional survey from Norges Bank on 11 September. The PMI data over the past three months points to a very weak survey and considering the importance and attention that Norges Bank gives the survey, it could further fuel expectations that much more easing is needed in Norway to support the economy.
In Denmark, the statistical office is scheduled to release CPI data for August. We estimate prices fell 0.1% m/m but rose 0.7% y/y. Statistics Denmark is also due to release balance of payments data for July. We expect a current account surplus of DKK13bn, which is pretty much the level at which it has been for some time.
The dovish message from the ECB where it no longer seems to be a question of whether more easing will be introduced, but rather in what form and when, also has implications for Denmark. Denmark has no QE programme and from October and onwards issuance will be resumed. Hence, more easing from the ECB underlines to us that Denmark will be stuck with negative rates well below that of the eurozone for a prolonged period of time. We have until now forecasted that the Danish central bank would hike the Certificates of Deposit rate by a total of 25bp to -0.50% over the next six months, but we acknowledge that the risk is now that policy rates will rise less than this.
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