In Sweden, the week ahead has infinitely more on the agenda than the quiet past week. NIER publishes new consumer and business confidence surveys (Wednesday, 09:00 CET) as well as a new forecast (Wednesday, 09:15 CET), which should attract some attention given the volatile state of industrial data.
We recommend buying Sweden 10Y government bonds on the back of seasonality factors, but be careful with the krona that might suffer for the same reasons.
In Norway, Thursday takes centre stage with the Norges bank meeting and the new monetary policy report. Both the domestic economy and the global economy have panned out more or less as expected since the previous report in December. Hence, we do not anticipate any change in interest rates at this meeting, nor do we expect any significant adjustment of the interest rate path. Should be marginally positive for the NOK.
We would go long NOK/SEK again if the cross drops below 105.50 once again.
Norway will tomorrow Tuesday March 25 have its first tap in the new May-24. It is now possible to pick up Norwegian 10Y AAA-rated bonds with a yield of 3%, which is close to the Irish yield level and well above the yield level in Belgium, Sweden and France. From a currency perspective an open FX position also makes sense given the recent move higher in EUR/NOK.
Denmark's Nationalbank (DN) is set to publish January's securities statistics and foreign portfolio investment data. Given the recent move higher in EUR/DKK this statistics release might attract more interest than usual. We take a closer look at the reaction function of Danmark's Nationalbank and argue that the market price in too many independent rate hikes in Denmark.
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